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Buy a PlayStation 3 and Sink Sony
sonnyweathers writes "There has never been a more perilous time for Sony than 2006. But if you think you can save the company by buying PlayStation 3 consoles, you're wrong. Analyst Evermore believes that selling 6 million PS3 consoles will make Sony a ripe target for takeover — perhaps even by Microsoft."
what's this? reverse psychology?
"DON'T buy our console!"
If Microsoft bought Sony, they'd own a whole lot of music and movies... I wonder what they'd do with that.
My blog
What do I have to do if I happen to like watching the company most actively pushing DRM on us flounder and collapse? How can I personally help to hasten that demise? Work a little harder? Be a little less greedy?
Actually, that's a strategy that could possibly save Sony -- abandon DRM loudly and publicly, and tout themselves as the Kings of Unrestricted Media. A big campaign of "We trust you to not steal our stuff, but Microsoft and Apple think you're thieves."
Hey, if they're going down the toilet anyway, try a little innovation! Work a little smarter, not harder.
John
Analyst me believes that it won't.
Where's my Slashdot article?
... don't buy it and just let it sit there on the store shelves collecting dust. Taking this approach also saves you $600.
"Armed forces abroad are of little value unless there is prudent counsel at home" - Cicero
How many X-Boxes we need to by to sink Microsoft?
Boy, that makes a lot of sense. If Sony makes "6 million PS3 units before April", and sells them all, then they recoup part of their expense. If they don't sell any, then they are somehow better off not recouping anything at all? More sensationalism.
Dan East
Better known as 318230.
My last console of purchase was a Gamecube. The number of retail games I purchased for it totals two: Super Smash Brothers and Windwaker. I hope Nintendo made money on that console because I doubt they made much on the games I purchased for it -- though I could be wrong.
So how many games would I have to buy to make a PS3 profitable? Well if they lose $300 per console and let's be generous and assume they make $50 profit on each game, then I'd have to buy six games -- which there is no way in hell I'm going to do because each game is going to be $60. If I'm to drop $500-$600 on the console (which I'm probably not going to), I'm not dropping another $300+ on games.
Now, if Sony makes big royalties on their Blu-Ray DVDs and the sales of the PS3 increase sales of that, they may be OK. It's hard to say but I think that the adoption of their Blu-Ray standard is crucial to their survival -- the PS3 being expensive because of it is just making the stakes all that much higher. And they've put themselves in that position so they have no one to blame but themselves. Quite the gamble. 'Will it pay off?' relies on too many factors for me to even ponder
My work here is dung.
No, wait that was for the XBox.
Wow, I should not post when knackered.
"And who could be the potential buyer?
Microsoft.
That's right. I said it. Just think about it."
Okay. I've thought about it. And it doesn't make very much sense. Neither does the rest of the article -- but at least they tried to support their main thesis.
First, TFA suggests that MS could take over Sony's video game arm, not the whole company. Second, it pretty much assumes that MS would want it. Why exactly would MS need/want it? If Sony goes that in the hole over the PS3, meaning not only did they lose a ton of cash on the loss per sale, but also didn't make hardly anything in third-party licensing deals (something TFA seems to forget is the largest revenue driver for consoles these days), that would mean that the Wii60 combination dominated the market - all this after the PS3 sold 6 million units (see the faulty logic yet?). Both Sony and MS lost tons on sales of consoles with the Xbox and PS2, but more than made it up with first-party games, third-party licensing, and the like.
Stranger things have happened, but I don't see it. Microsoft itself is a prime takeover target with almost zero debt and huge cash reserves, but it's too big for an LBO (at least we think it is).
Would be curious to see if Evermore owns any stocks in Sony. Quite honestly I am not in the market of spending money for something I don't want. I don't care if Sony fails or succeeds, just as long as it quits screwing the public.
Jumpstart the tartan drive.
There's a chance this is just a ploy to make the PS3 seem like such a bargain. They're selling it at such a low price they're cutting their own throat!
Justice is the sheep getting arrested while an impartial judge declares the vote void.
Simply sell their console to themselves at the typical loss. Then sell them on ebay for the price people are actually willing to pay. Serious profit!
There was the same talk about buying XBoxes just to "stick it to the man." Everyone who thinks they can hurt a company by vigorously buying their products, even if they were sold at a loss on the razorblade model, is deluding themselves.
First, they will crow that they're selling tons of units, which will look good to their management and drive forward their strategies, whether or not games are being sold at the same rate. Second, the base units just get cheaper to manufacture over their product lifetime, so at some point, you're thinking you are still shafting them while they take profits to the bank. Third, as I've said before, once you're talking about millions of customers, any possible "hurt" done by a few thousand boycotters or complainers is something a megacorporation can simply shrug off and ignore.
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Basically, they're saying that if people buy the machines (loss leaders) and don't buy the games, Sony will be in trouble. No $hit, Sherlock, that's the way the console business has been for years now.
Stop by my site where I write about ERP systems & more
Bill Gates buys six million playstation 3's shock!!!
Let's not. What kind of an idiot wrote that article??
So all the leechers looking for cheap blu-ray players are gonna bring down a company by buying all the subsidised stock and no games? PS3 IS DOOMED!
true, but Sony won't make money on PS3s running Linux or BSD
34486853790
Connection too slow for X forwarding? Try "ssh -CX user@host"
as it should be.
I could see Apple buying the Sony Game are before Microsoft. Sony really wants the PS/3 to push Blue Ray into the home and provide a way for Sony to complete with ITunes. Anyone that looks at the PS/3 can tell right off the bat that it isn't about games it is about movies. A deal with Apple would be give Apple access to some Games which it could use to help it's penetration into the home market. Sony could get Apple to push the BlueRay format by simply giving Apple the ability to rip the BlueDisks to the IPod. Could be a match made in heaven.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Yeah, right. Selling 6 millions PS3s would only cement sony's position in the video game industry. It'd give them a huge market, and would have developers lining up, purchasing *gasp* dev kits, and of course, licences to produce games. Big Name Games, and hell, sony'd make cash of the turdz as well. That's why they're selling it at a loss. I thought this was the basis of console strategy for a long time? (well, minus nintendo, but they're way out in left field anyway)
Ummm...i think the suggestions is to buy the console and not the games...hence cost them money, but don't give them any.
"Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
Yes, I know that if I want to purchase consumer goods that I need to work to earn money to be able to afford them. I have no problem with this, the problem I have is that Kutaragi's attitude is one of "The price is not our problem, the price is your problem, do something about it."
If you own a business, and your product is rejected by the market fot being too expensive, then you either deal with the lost sales or change your pricing structure. If you cannot do the former because it would hurt your bottom line, and you cannot do the latter because your have designed a product with a very high materials cost, then it's your problem, not that of your potential customers.
I played a dozen games on my friend's xbox360 and got bored fast. But I'm still playing CS:S, SC:BW, WC3:FZ after many years.
The guyz just don't have a clue
They have never had a clue
That's what happens when an electronic mfr also gets into the music business
Sonme pretty stupid structuring....
Minidisk coulda been huge....they coulda been the IPOD of the 90's but NOOOOO
these guyz where the great grandfather of DRM and just didn't get it....
the electricbrothahood does not think so. they're a more *reliable* source. ;)
Selling 6 million consoles would mean selling a good 20-40 million games, which would more than compensate for the losses incurred by console sales. Which, you know, is sort of their plan.
"In a February story for CNet, it was estimated that the total cost of components for the PS3 would be in the neighborhood of $725 to $905". I highly doubt that this is still the case, especially after they cut the price of the Japanese launch machine on Friday (link). This is backed up further by the fact that the Japanese market is by far their strongest and it is definitely where they are going to sell the most machines, considering the US has already got market proliferation from the Xbox 360 which will be challenging it thanks to a price cut at christmas, along with the introduction of the Wii. Not to mention Europe, which doesn't even get it until March 2007.
In Japan, the PS3 will be the main console over there and sales this christmas will be huge for them. There is no way Sony would take such a hit on the launch machine, and I'd put money on the cost of components having dropped a good deal in the last few months.
Business Voyeur
There's fans from every camp here on Slashdot for consoles: Microsoft, Sony and Nintendo. However, something to keep in mind despite whatever your affiliation is, if any: This is a BAD thing All of this, if it comes true, will equal gross complacency. Marketing analysts are preaching a damning future for the PS3 (though I rarely, if ever, take marketing analysts seriously), and though some people are cheering this on, they only should be if they're an enemy of the video game industry. Suggesting that Microsoft would buy them out is herecy; and to call yourself a fan of anything having to do with video games whilst rooting for such an outcome is hipocrisy in its truest form. Think about it people, how long have we been stuck with Windows XP now? Five years. How long was Internet Explorer stuck in the 5's and 6's? Even longer. Now, you have the Firefox's and Opera's gaining steam, so IE 7 is in the midst (not saying it's necessarily good). Ubuntu, OSX and even smaller rivals like ReactOS are making their own impacts. Microsoft knows it has to compete with others now to avoid losing marketshare, so something Vista this way comes. Once again, complacency is bad. Microsoft taking over Sony's throne in the console market would be quite unfavorable. Want to be stuck with the XBox 360 another decade? With Nintendo moving over toward more of an overall experience rather than raw performance, this leaves a deficit of competition for Microsoft. They have no reason to pour millions into R&D for the next console to lose money on initially if there's no market to capture. Sony seems to be making a LOT of textbook mistakes, similar to those that can be found on the console tombstones of Atari and 3DO. Let's hope that history doesn't repeat itself for the sake of the industry.
Anyway... that's my long-winded way of saying that this sounds like a familiar story: "Please don't buy too many of these consoles, because we'll end up bankrupt!" Of course, most of those companies (MS, Sony, Nintendo, etc.) are still around and doing fine... so make of it what you will.
All your sig are belong to us.
Other Cell-based systems I've looked at have 'call for prices' listed, which to me means 'more than you can justify spending.' The PS 3 looks like it might be a good, cheap, system for developing things for the Cell. Now 'run algorithm x on a GPU' papers are becoming less common in graphics conferences, I suspect that we'll start seeing a load of 'run algorithm x on a PS 3' become common.
I am TheRaven on Soylent News
Big losses or not, the big question for Sony is whether or not the second batch of 6 million consoles sell out or gather dust on the shelves. The first batch of consoles is going to sellout regardless of the retail price and of course games will be sold too. But if the price really is too high for the majority of consumers who would have an interest in the PS3, then that second batch could be in trouble. I just keep thinking about how the PSP has turned out, going from a lot of hype and excitement initially to relatively flat sales later and a dearth of compelling software. If that happens to the PS3, then the future of the company may well be in doubt. Though I doubt Microsoft would be the buyer simply because there may be a number of Japanese companies, and perhaps some Korean ones too that may take an interest in all or part of Sony. This is just pure speculation though.
To the making of books there is no end, so let's get started
If you think the Sony rootkit was bad. Consider what might happen if Microsoft was involved. Chilly...
of course without the games, a console is pretty much a really expensive paper weight.
even though the logic of the thought of buying the machines only makes since on a large scale, when its comes down to it, it is absolutely rediculous, especially since nobody is going to waste their hard earned cache on something they only bought to stick it to the person they bought it from. i suppose some people prefer to live outside a little thing i call reality.
If we can find out who is making all the decisions it probably wont be hard to convince him that they aren't selling because they need to manufacture more units, maybe add a root kit to every box and recall the old ones.
Selling no Playstation 3s will make Sony ripe for bankruptcy.
OK, not exactly a likely thing (there are *some* people who will buy a PS3 on opening day even if it has no games at all), but you get the idea. The rumored numbers are just mind-boggling: $600 (at least) for the console, $100 per game, and who knows how much a second controller will cost -- especially since they apparently won't even rumble.
Sony tried to make the PS3 into all things for all men, but are making a console that's all things to no one.
My sig is too lon
Frist off, there is a 100% chance that this guy is pulling numbers out of his you-know-what. He's no insider. Additionally, he doesn't seem to understand basic economic principles such as sunk costs.
I think that the Japanese government would block a takeover of Sony by Microsoft for one reason: pride. Despite its faults, Sony is still widely preceived as being one of the crown jewels of the Japanese nation. If Sony went deeply in the red, the Japanese goverment is likely to not allow a takeover and bail them out.
Most of Sony's troubles lie in its poor management. Sony could own the MP3 market if it hadn't been as concerned with content protection or proprietary formats. If Sony had made a deal with Toshiba with high definition format DVDs, Sony would be almost guaranteed to make moderate (billions) profits off of the new format. Sharing a positive number (profits) is better than having a negative number (losses) all to yourself. With a new format decided on, the adoption rate of high definition discs would be much quicker. Sony felt that it could win the format war easily by putting the Blu Ray drive in the PS3. I feel that Microsoft launched the Xbox 360 in 2005 because they knew that Sony would be in a poor position with the Blu Ray drive.
If Microsoft could take over Sony, they should. Microsoft doesn't really have anywhere to expand in software, they need to find new products if they want to have growth. Consumer electronics would be a very good area to get into for Microsoft. It is a low profit industry, but Microsoft would be in a position to sell services and software on the products. Many of Sony's failing products could be attractive to various Microsoft strategies. Think Sony with better management, it is really hard to get worse management.
This situation will most likely happen if the Wii is the dominant console this generation. If the PS3 doesn't do well, Sony will be in a position ripe for acquistion. If the Xbox 360 doesn't do well even though they had a year head start, Microsoft will either drop out of the console market or buy Sony and combine the Xbox and PS3 brands. If the Wii is the dominant console, then the anti-trust people will look more favourably on the merger of two failed brands.
Most fast food places earn a profit on EVERYTHING they produce. At McDonalds circa 2 years ago, the ONLY thing the restaurant sold at a loss was a Big'N Tasty (sorry, I've already forgotten where the ' goes. It's their Whopper-clone) and even THEN it was only at a loss during a particular sale (1 dollar a sandwhich, very short lived) and even THEN only if used in conjunction with an employee discount of 50 percent. The sandwich was the most expensive one made because it required (1) Quarter meat, (2) Tomato (usually a premium charge), (3) Quarter Bun, and (4) the cheap stuff like lettuce, onions, mayo.
The sandwhich cost 54 cents rounding upwards, and on effectively a double sale they lost 4 cents. When the sandwich returned to $3, the returned to making 2.50 per sandwich.
And yes, I understand that there is other overhead and labor costs, but the time-per-transaction is relatively low. Divide the hourly salary of the average McDonalds worker (let's go with $7 although I think the average pay might have trickled up a little), and divide that by the number of seconds in an hour and we end up with about 2 cents per second. Lets say the staff is slow and from start to finish that BnT took 40 seconds to assemble and wrap, that cost the store about 80 cents. Now let's assume that it took another 40 seconds for the counter person to pick up your sandwich, put it on a tray and set it on the counter. Another 80 cents. Now, we're looking at about 2.15 to make the sandwhich, versus the 3 price.
And don't foolishly equate the time you wait for your food with the time it takes to assemble, or at the very least should take.
You can further break it down to include the cost of heat to cook that sandwich, the roughly 20 cents in money-time it takes the grill person to lay and remove an entire tray of quarter meat (divided by the number of patties cooked over course), the penny for the wrapper, taxes on the building divided by the number of seconds in a year, the cost of management's salary divided by the number of seconds they work and the number of employees they oversee, etc... but I'm sure there's still baselining a little profit. Just not as much as the soda where the cup costs more than the soda itself.
The fast food analogy is more appropriate to Nintendo who will make some profit on the console, but is predominantly looking at the markup on games.
Disney would buy Sony (with some part being sold off to Apple) MS would have nothing to gain by buying Sony except to just put them out of business. Even though MS is getting more aggressive in competing directly in the Hardware business, buying Sony would freak out the Dell's and HP's of the world (And honestly the anti-trust gov't types would have to be smoking something real good to let this one get through... essentially MS would likely have to sell off the hardware stuff, leaving just the media, which while interesting to MS would turn away the other media people and make MS's media/DRM play more difficult for them). Disney on the other hand would be a perfect fit. They would add the media to their portfolio (give them more theme park ride possibilities even) The PS3 is great since Disney like to publish Games... They could hire the right game developers and go all Nintendo on everyone (in stead of Mario though, think Mickey). Of course this would benefit Apple indirectly since well their interests are currently tied together pretty strongly (iTunes now gets Sony movies, and has more leverage in future iTunes Music negotiations), yet still Apple maintains the guise of neutrality. The computer hardware would likely get sold off (Sony Laptops are quite cool). The software could get sold off too (maybe to Apple, Combining Acid IP with Garageband, Vegas with iMovie, FCP, maybe creating a PC version of iMovie and GarageBand?). The Camera business, Chip making, and all that could continue under the Sony name or get sold off as well, heck the peripheral stuff would also mesh well with Apple (except the Walkman but again the IP could be valuable). Of course Steve Jobs could make this happen without too much problem making a win-win for both of his companies.
--- Nothing To See Here ---
Sony are rightfully vilified in the tech community for their actions, but the PS3 will still do well.
The price of BluRay hardware will drop massively quite quickly once the blue laser issues are worked out. It could turn a $300 drive into a $50 drive within 18 months. Sony probably will not be making a loss on the PS3 come 2008, and it will cost $299. Microsoft are also making a $100+ loss on each XBox360, but they don't have a boutique component that will drop in price rapidly to enable them to make similar price drops.
I think that Sony were stupid in going with BluRay, or any next-generation media for the PS3. It's a massive risk to try and win the HD media war this way. They could have tried a custom DVD format (tri-layer DVDs for 13GB of storage for games, + natural copy protection) or even used standard DVDs. So instead of proven DVD technology we have new technology that may have high drive failure rates or so on. All to win a pissy media format war.
Sony will go down in history as the company that had an obsession with media formats and owning them. Weirdos.
Analyst Evermore believes that selling 6 million PS3 consoles will make Sony a ripe target for takeover -- perhaps even by Microsoft.
Is it good or bad to consolidate evil in this way?
http://outcampaign.org/
If you look at the upcoming November console elections - I mean, launches, there's an interesting thing going on:
:).
1. The Wii is launching with more games than the PS3, and in greater numbers
2. Therefore, developers who develop games for the Wii or the PS2/360 will have greater sales than PS3 sales, simply by available units.
3. If a publishing company wants to make more money, make a PS2/Wii/360 game first.
I've even heard some publishers moving to shift their games to the Wii just because the PS3 will be launching in such low numbers. Eventually this will change, but if you're looking at your angry stockholders wondering why "Murder Death Kill 2000" sold only 100,000 copies on the PS3 while the Wii version of "Shoot Him In The Head III" sold 300,000 copies.
If the PS3, however, sells 6 million units within six months, you bet those same developers will want to be heading to the big lake since they expect bigger fish there. Personally, I'm holding off on the PS3 until about 2008/2009 (depending on certain game launches), and I'm actually considering getting a 360 next year with Mr. Tax Return or some such (once they get "Shenmue 2" and "Panzer Dragoon Orta" backwards compatibility up).
I'm getting a Wii this Christmas, if for no other reason than a) it looks sweet, and b) My Lovely Wife (MLW), Mrs. Non-gamer herself who got hooked on "Brain Age" is curious to try out that "Cute tennis game you showed me".
Just because any chance I get to have MLW jumping around the TV set in a cute little tennis outfit is a good day for me
52 Weeks, 52 Religions with John Hummel
OK, so I did something I'm not supposed to do before ranting, I actually read the article. Forget for a second that the author specifically repeats itself, but its poorly written as well.
First, lets take the blue-ray drive. Lets assume for a moment, that the article correctly reports the price at between 200 and 300 dollars. So you're telling me the that between half or more of the cost is in the drive itself, to say nothing of the components that make up the system. I think Sony is run by baboons most of the time as well, but come on. Maybe at a full costs level, being sold to OEMs the blue-ray drive costs that much, but lets be real here for a second, they're not paying that much to have them.
Going further into the article, it suggest that Sony will force you to buy a bundle, big surprise there. Every console during launch has basically forced you to buy some bundle. And lets be honest for a second. What good is a console without atleast 1 game. Show me one early adopter that bought anything, just to have it sit on the shelf and collect dust. Of course you're going to buy a game, possibly two. As long as I can pick the game, I don't really think thats a problem. Now, on that same note, don't force me to buy an extra controller or any other 'accessories' especially since now the low-end model will offer HDMI port. Personally, I think thats a plus. Yes it will drive up the core costs just a touch, but lets be honest again, chances are that if I bought one today, I'd still end up buying the propietary component cables. This way I can buy the HDMI cable from a vendor of choice, and probably at a non-inflated price. I'll be standing just outside of BestBuy offering HDMI cables at half the cost of Monster on release day. Digital is digital.
Is the price of the PS3 high, yes it is. Do I still want one, yes I do. Will I buy it, probably not - but maybe. Does it cost more than the xbox 360, not necessarily. I can buy the 'base' console for the same price as the 'premium' 360. Plus I get BlueRay without any additional costs. The only advantage I can immediately see the 360 currently having is the modability. Give the PS3 1 year and I'm sure we'll see the same results.
I could go on, but to be honest I don't have the time or the energy to further crap on this article. I think someone had a word quota to fill, and this was there attempt at getting it done with.
think before you write, it'll save me moderator points.
Microsoft can afford to by 6 million PS3s, trash 'em, and THEN buy Sony.
I bought a PS1 and a PS2. I own a grand total of 6 games. I have 3 different versions of Tiger Woods, and 3 different versions of Gran Turismo. I drag my PS2 out only when I have a couple friends over, otherwise, it's collecting dust. If a PS3 were to come out, there'd have to be a real killer game, and an immensely better controller to make me want to jump to it. I have an HDTV, I have a fantastic progressive scan DVD player that upscales to 1080, plays just about any media format around. I don't need a PS3. But if someone comes out with an arcade quality controller, and a version of Gran Turismo that will fully take advantage of an HD picture, I'd buy it. But that is probably all I'd buy. Occasionally, I'd rent a game. But that's only when my brother comes to town or some other occasion where I'm stuck at home with nothing to do.
I already proposed this earlier this year: Let's buy Sony.
Then we can make our own gaming console / digital camera / MP3 player / laptop / movies / music / DVD player / HDTV.
Umm.. wait... Hasn't Nintendo been making money off it's consoles for years? In fact, I believe they've never sold a console at a loss...
Ask not what you can do for your country. Ask what your country did to you
When Gran Turismo HD is going to be a stupidly expensive pay-as-you-go experience? I'd much rather keep my PS2 and get all the stuff that comes with the game for free.
Accessories not included, my ass.
"No problem. I have the capacity to do infinite work so long as you don't mind that my quality approaches zero."-Dilbert
"Name and conquer"
No, people does not know what DRM means, but what they do know is that they cant copy their music freely from their iPod as they could with the tape recorder. They also know they cant backup that game/app DVD as they could do 10 years ago, or that movie DVD as they could with their VHS movie.
What happens is that they do not relate those annoyances they have everyday with technology with the Bad(tm) DRM. They just think it is "more difficult". Back in the times of the VHS you just inserted the original and the blank and presseed REC+PLAY and voila.
It is your task as "computer expert" to let them know that it is not a consequence of advanced tech that it is more difficult or impossible to do that but it is a consequence of the restrictions that these corporations are adding to their content (wheter that is or not legal is another story)
Ubuntu is an African word meaning 'I can't configure Debian'
I'll stick with a Wii. I'll pay a lump sum up front, but I'll get better value for money inthe long term.
You know, there is a difference between trolling and pointing out the flaws in your reasoning. Just saying.
Comment removed based on user account deletion
I don't know what the prices look like in the USA, but here in Canada Toys'R Us have the following prices for the consoles:
- Nintendo Wii: 279$CAD
- Xbox 360 Core: 399$CAD
- Xbox 360 (hard drive, wireless controller, hi-def cables, etc): 499$CAD
- PS3 (20GB): 549$CAD
- PS3 (60GB): 649$CAD
The basic PS3 (has a hard drive) isn't really more expensive than the Xbox 360 (with a hard drive). The closest competitor to the Wii is the core Xbox 360, which is still 120$CAD more expensive and is basically useless without a hard drive.
It's only a guess that GT HD will be expensive, it could also be the case that it sells for half the price of other games and filling it out just adds up to the cost of a normal game. You are turning a feature I like (being able to buy the game cheaper and just get a few cars that I care about) on its head and making it seem a negative.
As will all other things PS3, we have to wait till the console arrives to see what are negatives and what are positives.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You would think Sony would save themselves all the grief and remove the idiotic Blu-Ray junk that's driving up the price. How many people here really want the Blu-Ray drive anyway? Why not just make it an optional addon?
When I read of an "analyst" commenting on a potential M&A, I think "professional securities analyst," not "amateur blogger dumping illogical fact-bending thoughts on her website." Sheesh.
Is that a sister site to The Wall Street Journal or the Gartner Group? :)
You are all forgetting that the US is not the only market Sony serves. [Unless I didn't fully read everything, and if I didn't, I'm sorry] And while Slashdot is US-centric, Sony is not.
UMD is alive and well in Japan. Minidiscs are alive and well in Japan. New video games [for the ps2] normally cost around $70. It seems Sony is treating the US market as if it were Japan.
However, even if this strategy bombs in the US, there is still a huge market that will eat it up. People wonder why the XBox 360 does poorly in Japan. It's because there are no games for it - most of the games that Japanese like are for PS2. The trend will continue with the PS3. Even if sales in the US are poor, Sony will recoup some of the losses from overseas markets.
I'm just guessing, but the PS3 won't bomb nearly as badly, and it will make up ground. It may not end up being more successful than the PS2, or even the XBox 360, but I think it will end up being successful.
It's really not as crazy as it sounds, you know. Think of it this way; the cheapest Blu-Ray player you can find on the market is about $1,000. This does not require any real rendering hardware besides that which shows the video on a screen.
The PS3 on the other hand, has the Blu-Ray technology while at the same time uses the Cell multi-core microprocessor and an NVIDIA graphics GPU that is more powerful than a GeForce 7800GTX. One of those graphics cards goes retail at $500 or so.
$400 loss on every $600 PS3 still sound crazy to you?
Wii!
The article works out the supposed loss from the console, and then add further loss from sale of cables and the like... it makes no sense at all - how would Sony lose $100/console from selling cables?
Not you.
Isn't this the same type of thing that people predicted for the Xbox? "Microsoft selling at a loss! Buy one and be the downfall of M$!!!!11!1!" And basically they sell at a loss, people buy a few games and everything turns out fine. Especially with things like Microsoft Points on Live.
I will shred my adversaries. Pull their eyes out just enough to turn them towards their mewing, mutilated faces. Illyria
Don't need no P(i)S 3.
I'll stick to XBOX 360 and PC's.
The problem is partly in quoting retail figures. Nobody knows what Sony is getting as a wholesale price, but given the overinflated rates that much of retail sells at, chances are it's a lot cheaper than you would get at Wal-Mart
iTunes is still popular with DRM because Apple specifically shows you how to remove the DRM by burning the songs onto Audio CD the moment you download the song. Saying iTunes has any sort of DRM is as ignorant as all get out. It simply isn't there as far as i'm concerned.
I think you under estimate people at large. The world isn't filled with hapless technodweebs right out of the movie Hackers. People are up to speed and know of all these issues. The real importance is whether or not they really care.
Sony could actually go under if Microsoft bought all of the PS3s and did not buy the software. Sony would not be able to recoup their loss. Highly risky but would actually work since Sony is losing so much money on each console sold.
...was this: On September 25, 2006 11:53 AM, Jonah A. Libster said...
"I think many of you are missing a key element here: Culture. If you've been to Japan for any significant duration (and I have) you'll know that unlike the USA/Canada, Japan has a strong sense of tradition and history. In addition, the people in Japan don't balk at higer prices the way we do. Its all cooperative there: Everyone charges higher prices with the understanding it supports higher quality of living(and funny enough, it WORKS!). When I was there food was 30% higher than the cost of North America, computers were almost double, and for the same US dollars you get 1/2 the size can of soda but people there bear all this without complaint. Every kid in my village had a PS2 even though the income there was significantly lower than the city dwellers. You get the idea.
A long time high profile company like Sony will most likely do the following: Sell of the components that have more foriegn interest than Japanese, especially since the Japanese Government often frown at foriegn ownership of Japanese property (its illegal to buy property unless you are a citizen there) and companies. This would include large parts (not 100%) of the movie and music division (keep the Japanese division) and computer divisions (but keep its locally profitable Japanese division, including monitors and computers). I believe NEC did something similar: I saw tons of NEC products in Japan (computers, appliances, laptops, TVs and other things) but only a few monitors and CD/DVD drives in North America. Same for Toshiba (I had a Toshiba bicycle believe it or not!). By selling off the foriegn interests and keeping the Japanese (where price is less of an issue) they solve their problems, go back to their roots, and are more likely to get government assistance should they really need it.
The battery incident did the most damage to Sony on a PR/Cultural level because people in Japan are not very forgiving with cutting corners and are often in the habit of demanding public apologies (unlike here where we quickly dismiss corporate "mistakes") when such incidents are made public. The Japanese government has bailed out financially troubled Japanese companies as many as 3 times in the past, but it looks bad to give goverment money to a company who has a public scandle or two in the spotlight. (the second case being the rootkit incident) I suspect there is pressure to reduce or eliminate its foriegn music interests(save the Chinese division) so they can live it down faster.
anyway there is my view on the matter. Numbers are only part of the picture. Some one once said, "respectability is the ultimate currency". In Japan, that is certainly true. Never dismiss cultural beliefs when creating a financial analysis. Oh, in regards to the PS3 story, for reasons I stated above, Sony will probably not want to support PS3 in North America (or as little as it can get away with) but give full support to Japanese purchasers. Why? Because the Japanese are more like to "work harder" to pay the higher price, lower shipping costs, cultural compatibility on support as well as higher cost of providing foriegn support. I think the biggest problem with the PS3 in North America is some Japanese corporate executives only looked at the marketing problem from a Japanese prospective (cultrual differences underestimated again). I'm sure some "shame" was generated by this oversight."
portions of Tokyo Underworld by robert whiting would have an interesting take on this me thinks... :D
Thank god! One less source of piss-poor grammar on the PS3's side :)
When did Microsoft last take over a competitor in an industry they are well established in? Exactly. The suggestion makes zero sense. Besides I'm sure the japanese would figure out a way to save Sony if it really came to it. Microsoft want to move into new industries, so gaming is not on the radar, as they are pretty well covered there.
Just think of it, you too could add to your cluster a PS3, while watching Sony lose $200 per machine, and get a nice machine to hack!
We don't need no steenkin DRM!
-- Tigger warning: This post may contain tiggers! --
Just take a look at the last 2 flops from Nintendo. The N64 was outsold by the PS1, the Gamecube came in a stale 3rd behind the regular Xbox and PS2
Getting outsold, does not a flop make. This is business, you know, where you try to make money? Do you understand that skippy? This isn't a video game where you try to get the highest score.
Because this is business, where the goal is to make money, saying Nintendo released two flops when they sold millions and made billions is about as idiotic a fanboy statement as I've come across. Jaguar was a flop. Dreamcast was a flop. N64 and Gamecube were both successes.
As to the price issue, this will be the first time that there was a $200+ price difference between the consoles. This is also a different economic environment. This is also during a year in which Sony has had it's worst public relations disasters in a long time, if not ever. And, Nintendo, actually seemed to have added a different dimension to gameplay that a lot of reviewers seem to like. But none of this means I think Nintendo will be number one in terms of market share.
My call is, out of the gate, Nintendo is going to fly off of shelves, because of the faithful and the price, they will outsell the competition this year. Sony will end up having to implement drastic price cuts because despite having their own faithful(many of whom have to go through mommy and daddy for their console), the cost prohibition is simply too great for now(many mommy and daddys will go postal when asked to purchase a $500 video game system for their precious little couch warmer). They will regain their "#1" position in terms of numbers after the price cuts, but it will come at the cost of having profitability issues for the first year or two(speaking hardware wise). The new video formats will be largely irrelevant to the majority of console consumers for at least a year, if not two to come. Period. Only the very small "gee whiz" early adopters care at all about, the majority don't see what's wrong with their DVD players. The VAST majority.
After a few years, and sony has a higher percentage of the market, fanboys like you will call the Wii a "flop" after it's sold millions of units and made more billions of dollars for Nintendo, and assholes like me will be here mocking your dumbasses for making moron statements like that.
This is a best case scenario too. Pray that Sony doesn't run into supply problems with the chips.
I've bought: Gamecube, Xbox, Xbox 360, PS2 Games I've purchased: Gamecube : 41 Xbox : 0 Xbox 360 : 0 PS2 : 0
Or better yet... Get a Nintendo Wii, save money and sink Sony's market share.
Or, for the price of a Sony PS3 in the US or EU, buy two Ninteno Wii's and give one to a friend so you can play Animal Crossing at each other's villages!
-- Tigger warning: This post may contain tiggers! --
That it will only be $410, not $600.
-Clio
Karma: Bad (mostly from not giving a fuck)
Blog: http://clintjcl.wordpress.com
$410. Catch up on your news. :)
-Clio
Karma: Bad (mostly from not giving a fuck)
Blog: http://clintjcl.wordpress.com
BlueRay killed Sony....RIP.
This has to be the stupidest article ever. Sony loses money when they manufacture the units, not when they sell them. Selling more PS3's is a good thing for them - a $400 loss per console is a lot less than a $900 cost (if you believe the article's figures, which I don't). Microsoft would never buy Sony. They're completely different companies, with different products, with different cultures, and similar competitors. It makes no sense. There are no cost savings to be made. Additionally, the article suggests "Sony" will sell PS3 games for $59 x $99. That's great if you're Sony, but I wonder how many first-party launch titles there will be? Unless you're Nintendo, first-party titles aren't where one makes revenue on a console.
Who wrote this crap?
Buy the PS3, but don't buy any games, just use it as a Linux computer.
Now that will really kill them because there losing on the counsel but making major profits on the games!
And on the plus side companies will see that people want Linux.
Then maybe we can convince people for OSS and anti-DRM!
The issue is not whether or not people really care. The issue is whether or not they know what DRM is. I am dead serious on that. Do what I said, go outside and ask 10 random strangers what DRM is. If you go and do that I will take at face value what you tell me is the actual response. Please understand that if you live/work in a school or a tech company that that is not an accurate sample. Thats why I say "go outside" not merely ask your co-workers depending on where you work.
I'm not being elitist. I also don't think most people know that you can burn your iTunes tracks to CD to escape the DRM. Why? Because who would do such a thing when you can just put your music onto an iPod? Who the hell still listens to audio CDs? Your estimate of 5 out of 10 people knowing what DRM is is ridiculous. Thats half of all people. So you seriously think that of the 300 million people in the US that 150 million of them know what DRM is? I doubt the majority of iPod users even know that the tracks downloaded from the iTunes Music Store aren't MP3s, they're actually AAC files. They wouldn't know because most don't try to move them to other devices. If you have a computer and an iPod you're covered as far as AACs go. So Apple's DRM limitations simply DO NOT AFFECT MOST PEOPLE.
Yes the world is in fact filled with hapless technodweebs right out of the movie Hackers. I can't for the live of me get any of my co-workers to use Firefox or Open Office or Linux. Its a non-starter. Windows and IE and MS Office "Just work" and none of them could care less about the alternatives. Where do you live that half the population around you is so technically savvy? Me myself I'm in Boston, MA.
Mac OS X and Windows XP working side by side to fight back the night.
It would be bad enough if this were an article by an analyst pretending to be a CEO of a multinational corporation. Instead we have someone pretending to be an analyst. Sony may fail to execute successfully in one instance or another but they created and own the playstation franchise which is obviously very valuable. Of course it has to be managed properly and by playing the Blu-Ray card they may have overplayed their hand. We don't know yet and cannot know until it has been purchased and used by consumers for a while.
But with a wildly successful franchise like playstation the last thing that will kill Sony is if they sell too many consoles. There are any number of companies that are large enough to acquire Sony in any circumstance (e.g. any regional telecom) but investors are not likely to be inspired by this sort of management change. The example of Microsoft isn't much better. Running a loss leader division from a company trying to buy its way into the living room isn't an indicator of future success.
OK, it costs Sony $900 to make a machine that they plan to sell for $600. Clearly, if a third party would sell them a one for $700, they'd buy it, saving themselves $200 compared with manufacturing one themselves... So, here's my win-win plan:
1. Buy PS3 from Sony at $600.
2. Sell PS3 to Sony for $700.
3. Profit!
4. Repeat!
There are 0x40000000 types of people: those who understand 32-bit IEEE 754 floating point, and those who don't.
Posted by CmdrTaco on Monday September 25, @10:00PM
from the could-things-get-any-worse dept.
An anonymous reader writes
Sony is going to have a lot of trouble withstanding an attack from Gamera, as not only does he possess great destructive power, but he is also a friend to all children.
Everyone on here keeps stating that they are losing money on the console and have to make up the difference in game sales. While this is true, it is only part of the picture. They also will make money from people buying dev kits, licensing their games to run on the PS3, and Sony still makes good profit on all the accessories (extra controllers, memory, cables, etc.). Also, the more consoles they sell, the more game developers will license and produce games on that platform. If BluRay catches on, people will rush out to buy PS3s as it will be a very cheap player. That's a big if but it does give the thing a chance to take off despite its price. This thing isn't just a console, it's the future of Sony. It is a huge gamble and will be interesting to see what happens.
Support a great indie game: http://www.abaddon360.com
Here's how things need to happen:
1. Microsoft and Nintendo work a deal out, to buy massive amounts of PS3s.
2. With Sony out, Nintendo controls +60% of the video game market, with Microsoft at -40%
3. With Microsoft weakened by the PS3 purchases (and Nintendo unharmed, thanks to the instantprofit
from Wii), Apple takes the world by storm, leaving Microsoft in the dust
4. Nintendo buys out Microsoft, creating an über-powerful Video-Game/Computer/Electronics company
5. "Nintendosoft" reclaims the throne, by monopolizing the operating system market, weakening Apple.
6. Merge with Apple into "Nintendosapple"
7. Dystopian future - All homes are watched over by giant screens, displaying Miyamoto-san 24/7. People's movements are recorded by Teeny-Tiny Wiimotes imbedded under their skin at birth. An underround society, lead by Unix and Linux users attempts to overthrow the government, and fails horribly.
My name would be Pi_r_[]ed, but this stupid thing wouldn't allow it. Well, at least now you know.
from an accounting perspective, if a company faces possible liquidation, but has a realistic alternative, ie, they are reasonably sure to make a profit some time in the future, some people see this as a 50% to a 75% chance, then all Sony will need to do is explain the current situation in the financial statements. All this can lead to is a drop in the stock price, but Sony should be able to borrow allot of money to keep a good cash-flow. as others have pointed out, sony has a diverse range of products, if one branch of that product range should fail, the PS3 for example, then they wil be able to cut their losses, sell of those bad sectors, and continue operating, Sony will fade from the spotlight, but it wont be their end.
This is my sig.
The key to sinking Sony is not just to purchase their subsidized console. It's to do that while dissuading a massive proportion of these subsidized PS3 owners from buying PS3 games.
There is a way to accomplish this, but I suspect it will not be easily or quickly accomplished. Sony's Achilles heel in all of this is not the underpriced PS3, it's the PS3's game-disc copy protection scheme. To have any hope of sinking Sony, a torpedo will have to be directly aimed at that copy protection.
In a best case scenario (or worst, depending on your perspective), a comprehensive crack of Sony's game-disc copy protection would be released at the very instant PC-based Blue Ray burners drop to a reasonable price, say $300. This game-cracking software should be so easy to use that any punter with a PC and a Blue Ray burner could easily make copies of Sony's only profit center, the game discs. To truly sink Sony, this crack shouldn't require swapping discs or modifying hardware. The cracking software should be very easy to use, completely effective, and comprehensive across all of the PS3 line.
If such a comprehensive crack were released after Sony had shipped say, 5 million PS3 units, it would be nearly impossible for Sony to "fix". Of course, if Sony have done their work correctly, the execution of this will be supremely difficult.
Sony has almost certainly used some sort cryptographic hash to sign the game discs. So unless Sony has left a gaping hole in their copy protection system, a massive effort would be required to unravel the keys. If I were to suggest an avenue of attack, it would not be a brute force assault against the cryptographic keys. I think a far more productive attack would be a signal analysis of the PS3 chipset. Just such an analysis managed to crack the Xbox keys.
It's a big job, but if someone out there really has it in for Sony, this would sink Sony right to the bottom.
Two basic criticisms with Evermore's analysis.
First, she (?) assumes no economies of scale for Sony in manufacturing the console, and no ability for Sony to squeeze its own supply chain. Perhaps there is or isn't, but I remember when the iPod first came out, there was a lot of discussion about Apple's margins on the device were marginal at best, and perhaps even negative, given the known component costs. But that fact was not in evidence in Apple's financial reports for that quarter or since.
I'm not arguing that the PS3 will be profitable initially or any particular year of its life, but Evermore's analysis (a $300 or $400 loss per unit over 6 million units ?!?) has a weakness that a lot of economic projections seem to share: assume perfect knowledge not only about current price structures and individual and corporate economic behavior, but also assume you know exactly how it's going to turn out in the future.
Second, her comparison of the DaimlerChrysler merger to a putative Sony-Microsoft merger does not make sense from a anti-trust perspective. Daimler and Chrysler largely had a complementary market presence in that Daimler-Benz's strengths were in markets Chrysler was weak in or did not serve, and vice-versa. In fact, I'm not aware of any market or market segment where both could be regarded in the top two, like Sony and Microsoft, or even the top five. (If anyone knows different for any of the national markets, please apprise us. I'm honestly curious.) There may have been other reasons to question the merger, but anti-trust issues were not one of them.
In other words, Daimler/Chrysler didn't trigger heightened anti-trust scrutiny. Microsoft/Sony most certainly would, and not only in the United States.
But then who would buy them? Toshiba possibly might if they got weak enough. That way Toshiba would be the only option in the HD movie market. They would win the format war hands down. Sony's hardware could possibly be of interest to Toshiba as well. Nintendo might consider buying their Playstation division. Nintendo however doesn't really need non-game stuff as it is a game company. Keep in mind, Nintendo has almost always remained profitable, no matter how small their market share. Sega might buy out that division and re-enter the console market. Sega is still around producing games, and they only failed due to the fact that the dream cast was too far out for most. Another multimedia company could also buy out Sony.
Sony could survive but really, the only way they could is if their PS3 takes the market by storm or if Blu-Ray wins. It looks like the hightened cost of both will prevent that. Not to mention all the hardware companies lining up behind HD-DVD, and they are the ones with the real say.
Sony could also eventually go out of buisness. They are not the megacorp they once were and this is possible.
The Gospel according to lolcat
I read the article and there are a bunch of questionable facts and calculations in it. The first is that it assumes that Sony is losing $300 or $400 a system. Seems a little high, but I guess you never know how much all this stuff costs because it's all entirely brand new. Then they multiply it by 6 million consoles. Might not happen, but whatever. The result even in the worst case scenario is that Sony loses $2.4 billion at launch. The company is worth $36 billion dollars. I don't hink a 6% drop in the value of the company would make them any juicier of a target for Microsoft. Bill Gates could buy Sony himself if he wanted to. Right now. Oh yeah, and those figures all assume that Sony doesn't sell any software, or derive any benefit from selling 6 million blu ray players.
IT'S A TRAP!
Slow Down Cowboy! It's been 1 hour, 47 minutes since you last successfully posted a comment
Consumers will have to make the choice between many $50 games on a $300 system or a couple $100 games on a $600 system. I think the choice is obvious.
I believe this is known in the industry as the "NeoGeo" factor.
Mwa ha ha hah ! Die Sony, die! At launch I will buying 10 of your consoles! (As soon as I figure out how to get that kind of dough.)
Well to do those calulations they must have had the official prices, right? Where are they? What is the list price of the game?
Oh that's right, no one knows anything and Ars is just a bunch of mindless posters nowdays instead of a great source of information like they used to be. I gave up on Ars for any real technical information about a year ago and this would be no exception. If something sounds insane, it probably is.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Hola, gringo! Mexico is in the Americas.
"It's really not as crazy as it sounds, you know." Actually yes it is. Sony has been an electronics companie first and foremost. They own the majority of the factories they use and by habit have smaller sister companies that turn around and sell parts to them in bulk.
Cheers.