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."

Comments

they are sony minions I tell you!

[Anonymous Coward]

what's this? reverse psychology?

"DON'T buy our console!"

Re:they are sony minions I tell you!

[russ1337]

It appears they want to make the money back selling the games. Gizmodo are reporting a projected increase in game prices to as much as $100 a game - the reason: Increased Dev Costs. So yeah, buy a PS3, but mortgage your house to get some games.

Re:they are sony minions I tell you!

[Anonymous Coward]

The saddest thing is that Microsoft is probably going to drop the price of the Xbox to $300 or $200 the moment the PS3 hits the stores. 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. The Playstation line had a great run but complete corporate incompetence will probably kill it during this iteration. Pity, but that's life.

Re:they are sony minions I tell you!

[__aaclcg7560]

Or better yet... Get a Nintendo Wii, save money and sink Sony's market share.

Re:they are sony minions I tell you!

[HAKdragon]

Xbox should have a new slogan, "Buy American".

Ignoring the fact that, you know, the systems are made in Mexico.

Re:they are sony minions I tell you!

[mikeisme77]

There's a difference in that though: DVD was already an established standard and had clear benefits over VHS (plus it didn't require additional equipment to get those additional benefits). Blu-Ray (and HD-DVD) still have yet to become proven standards/successors to DVDs, currently lack any additional benefits (beyond picture/audio quality), AND require most consumers to purchase additional equipment to see any benefit from them.

Of course, on the other hand, MiniDisc was actually successful in Japan... so something has to be said about Sony's mindshare there.

What would Microsoft do with all that content?

[pieterh]

If Microsoft bought Sony, they'd own a whole lot of music and movies... I wonder what they'd do with that.

Re:What would Microsoft do with all that content?

[bmajik]

Speaking for myself only (but, I am a MS employee), I seriously hope that _never_ happens.

To say that I am ... dissatisfied with what we're doing in terms of DRM and content protection technologies for content we have no financial stake in.. would be an understatement. I've gotten in some pretty heated arguments with people closer to those groups internally and there are days I feel like looking for other employment options.

Imagine how awful things would be if MS owned a bunch of "traditional" content (besides software.. which has grown up with "piracy" and the market understands how to deal with it..and the providers have grown up figuring out how to stay alive inspite of it)

When one umbrella organization owns content and technology, the interests of one are going to suffer due to the other. Sony makes this plainly evident. I suspect that the content people at Sony are furious that the technology people haven't invented a remote "extort-money" button for the latest Sony-Style line of kitchen radios.. and the consumer electronics people are livid that they keep getting memos suggesting that they invent a TV that plays ONLY Sony Pictures movies from the content arm.

When I talk about stuff like the broadcast flag, etc at work, I can still posture the argument that it's not clear that we make money by playing well with that thing vs ignoring it or taking a more consumer friendly approach. If suddenly "we" benefited from crap like the broadcast flag, those arguments would be DOA.

(Just like slashdot - there is not a singular hive-mind mentality inside Microsoft, and it should be clear that not everyone is 100% thrilled with everything that gets MS's name attributed to it. I can only imagine that there are good engineers at Sony as well that are upset with what has happened to their company.. )

Re:What would Microsoft do with all that content?

[Anonymous Coward]

Hrmm... that's a quite risky opinion you have.

Please come to my office at ONCE.

Bring a chair.

Steve.

Re:What would Microsoft do with all that content?

[GaratNW]

Being a martyr is all fine and dandy. But, honestly. If every white collar worker in America stopped working for corprorations that did one or more things that the individual dissaproves of, we'd have a nation of corporations with only exectuive management left working for them, and an unemployment rate of 99.9%. I left Microsoft a number of years ago. Not for any moral or ethical reasons. They do stuff I think is great (still), and do stuff I think is horrible (still). How is this any different from IBM, Oracle, Intel, AMD, Sony, the rest of corporate america? Experience has taught most people that, the way to make something better, is not to quit on ethical grounds and send yourself and your family to the poor house. Work on making things better, and if at the end of it, you no longer can handle it any more, then make that decision to leave. But, that's a pretty santimonious attitude you have there, no matter how you look at it, Moofie.

Re:What would Microsoft do with all that content?

[bmajik]

hahah :) nicely done.

Actually, my only 1:1 "interaction" with Ballmer was when he held the door for me at the entrance to the health-club most MSFT guys go to in Redmond. He had forgotten his health-club id card that morning. His money more or less built the whole place so I smirked as he explained who he was to the person working the card scanner. "Ballmer.. B-A-L-L-M-E-R..".

I can attest that when asked who he was, he did not shout "DEVELOPERS, DEVELOPERS, DEVELOPERS!" :)

Re:What would Microsoft do with all that content?

[thePowerOfGrayskull]

I'm not talking about being a martyr. I understand needing to pay the bills. I am saying, however, that your credentials work against your rhetorical stance. You benefit from MS's DRM practices. You might not like them, but you are reaping the rewards.

Isn't this comparable to saying, "Well, you live in the United States, so your position against the current government is essentially invalid where it counts." ?

"Save Sony?"

[plover]

From the article, Sony's CEO was quoted as saying "Want a PS3? Work a little harder."

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.

Re:"Save Sony?"

[plover]

OK, so I misquoted. It was Sony Computer Entertainment president Ken Kutaragi that said this:

"Our ideal," Kutaragi said, "is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."

It was the article's author that summed it up as "Want a PS3? Work a little harder!"

Re:"Save Sony?"

[Dan East]

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."

Sony is too big, and has an vested interest in too many areas. Thus they cannot serve only the consumer in any of their divisions. As long as we see movies with the word "Sony" in the opening credits, we can be certain that Sony hardware will embrace DRM to the fullest extent possible.

If Sony could have their way, the only media and hardware channel between the movies they produce and the consumer would be Betamax®, oops, I mean Memory Stick®, oops, I mean UMD®, oops I mean Blue-ray®. And if someone is reading this 5 years from now, insert whatever DRM infected crap they're currently pushing at the end of that sentence.

Dan East

Re:"Save Sony?"

[NDPTAL85]

You're one of those funny Slashdot people who thinks the masses would care about DRM even if they knew what it was in the first place, aren't you?

Think about what you just said. "abandon DRM loudly and publicly." Go outside your home or office right now and run up to 10 people and ask them if they know what DRM means. Help them out even, let them know DRM stands for Digital RIghts Management but tell them nothing more. You'll be lucky to find one person who can tell you what DRM means. So how exactl would your suggestion help Sony again? And why is Apple so successful despite its use of DRM with iTunes?

Re:"Save Sony?"

[dthree]

Why do /.-ers always trot out the betamax to "prove" sony's desire to foist proprietary systems on consumers? First off, sony didn't own any movie studios when they developed the betamax and there were no prerecorded tapes untill several years later. Secondly, they did attempt to license the technology to JVC, who they didn't know at the time was developing a competing format, and did license to Aiwa, NEC, Zenith, Sanyo and Toshiba. Thirdly, how is JVC/Matsushita's VHS format any less proprietary if manufacturers have to pay a license fee to make them?

I'm not saying sony hasn't been stupid about other things, even in addition to the one's you metioned, (Mindisk, 8mm, rootkits, etc) but WTF do you people have against betamax?

Re:"Save Sony?"

[plover]

It's all about history. A lot of (old) people are still bitter about having to replace their Betamax VCRs. The feeling of having been screwed by a corporation doesn't fade -- it ossifies in the brain.

It's not an issue of cold facts, it's one of perception. Keep in mind that at this time Sony was widely loved for having produced the Walkman, which was 1979's version of the iPod. I'm not saying Sony went out to deliberately screw the people who adopted Betamax. Far from it, it's obvious that they wanted Betamax to dominate the market. But it didn't, and people felt like they had wasted a huge amount of money trusting their beloved Sony (feel free to adjust a $1000 price tag for a VCR for 25 years of inflation.) When they spent that money, they didn't know it was a gamble or that there was a chance they'd "lose" -- this was Sony!

Now, compound that disappointment with the rest of the restrictions and proprietary media that Sony's shoveled out the doors or supported ever since they entered the production side of the entertainment industry. ATRAC, the copy bit in DAT tapes, Macrovision, Memory Sticks, CSS, HDCP, (and the rootkit fiasco) and you can't help but notice a pattern of general contempt for their customers evolving over the years.

So if a pissed-off grumpy old guy wants to whine about getting burned by Betamax, let him. He's got tons of evidence on his side, even if the facts are slim.

(A lot of people who paid thousands of dollars for non-HDCP HDMI televisions a few years ago are about to enter that same ripped-off state, so look for a fresh crop of bitter young technophiles to adopt a similar attitude towards the makers of their plasma TVs.)

Even better...

[BigDork1001]

... don't buy it and just let it sit there on the store shelves collecting dust. Taking this approach also saves you $600.

Strange

[Dan East]

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

Re:Strange

[DerGeist]

I don't think you fully understand how this is supposed to work. You see, Sony is selling the PS3 consoles with the expectation that someone is going to buy them (at a loss to Sony) and then buy games (i.e., big profits for Sony).

Think of a generic fast-food restaurant. Imagine they have a "value menu" with the Stinkburger Deluxe for only $0.99, but it costs $2.99 to produce. Drinks, however are $2.50 and cost about $0.15 to produce. Similarly fries are $0.99 but cost only $0.10 to produce. The restaurant will go out of business if every customer enters, purchases one Stinkburger Deluxe, and leaves. But most people aren't satisfied just downing a Stinkburger, they want fries and a drink too. That's the idea here; it's called the "razor and blades business model."

So if no one buys a PS3, Sony obviously won't produce six million. If people buy them and buy NO games, NO blu-ray discs, and NO accessories (extra controllers, etc.) then Sony will be in quite a bit of trouble.

Re:Strange

[UbuntuDupe]

Yes, and along the same lines, what if people bought them en masse for a non-gaming, non-blu-ray purpose? What if, say, university workers started buying them, and salvaged them for parts, esp. the processors for a supercomputing system. You'd also get hard drives and graphics cards. I'm sure these could be used in other fields, and they're priced under cost -- a better deal than anywhere else.

Then, they're just a charity for people who need computer parts. What would stop this?

Re:Strange

[Scrameustache]

If people buy them and buy NO games, NO blu-ray discs, and NO accessories (extra controllers, etc.) then Sony will be in quite a bit of trouble.

If Gamera the giant firebreathing space turtle lands on their offices, they'll bit in quite a bit of trouble too, and that's about as likely to happen.

Who the hell is going to buy a 600$ piece of electronic equipment out of spite with no intention of using it?

Re:Strange

[drew]

Two things:

1) Sony doesn't make the consoles as the order comes in. Sure, they won't make 6 million right away if nobody is buying them, but they still have to have enough on hand for the initial launch to fill demand. So if they make two million consoles and manage to get half of those onto store shelves before stores realize that nobody wants them, then Sony is out $600*1M + $100*1M = 700M. If they make 6 million and they sell out, they are out $100*6M = 600M, and even that is assuming that there are really 6 million people out there who are willing to spend $600 on a console and nothing else just to spite Sony. Sorry, don't think so.

2) Does anybody actually know that Sony is selling these consoles at a loss, or is this all just wild speculation? So far as I know, the only company that has ever sold a console at a loss was Microsoft, and they explicitly were not interested in making money on the console, but rather spending a boatload of money to make their way into a new market. The razor blades analogy is so bad for this market for a variety of reasons, but the most obvious one is that razor blades are consumed. You can't buy a razor and just one blade, because the blade will wear out and you have to either buy a new one or you're left with a worthless plastic stump. Console games are not consumed- you can buy just one, and it will last you the lifetime of the console. I know a couple of people who bought a PS2 just for the GTA games. If Sony had been selling that console at a loss, they would have never made their money back from three games, when one or two of them were purchased as "Greatest Hits" for $20. All of the estimates that I remember seeing for the "per console" cost to Sony of the PS3 included sunk costs such as the cost to develop the BluRay drives, which is misleading because Sony has already spent that money, whether they sell 1 PS3 or 100 million.

Anyway, I think Sony really blew it on this generation. They are too expensive to compete with Nintendo, and they are a year later on the market than the XBOX. Unless they have some really good exclusive games, (which it's been a long time since they have had) they are in for a world of hurt pretty soon.

Microsoft theory tenuous at best

[EVil Lawyer]

The only argument supporting their assertion that Microsoft might want to buy a beleaugured Sony is:

"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.

Meh

[richdun]

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).

selling razorblades is nothing new

[Speare]

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.

What?

[NosTROLLdamus]

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)

Re:The Console Makers Hate Me

[Spad]

Luckily for Nintendo, they sold the Gamecube at a profit. It's a little known business trick in the console industry, but not selling your products at a loss is a great way to make money.

Kutaragi just doesn't get it

[Y-Crate]

"Our ideal," Kutaragi said, "is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."

I'm not one to assume that I deserve to get a PS3, 360 or Wii, but Kutaragi's comments border on insulting.

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.

Economics 101

[Alchemar]

This is based on how much sony will lose based on cost to manufacture vs. sell price. $750 - $400 = $350 in the hole. They will be spitting these things out like no tomorrow near the release date. They have to pay to manufacture the unit if you buy one or not. $750 - $0 = $750 in the hole. If you want to see sony go down for all their stupid behavior then Don't buy a unit. They will probably cut off production when they don't sell, but it should be too late by then.

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.

Not MS But...

[skribble]

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.

Perhaps not

[Dark Paladin]

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 :).

Knuth said it

[xtracto]

"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)

Re:PS3 isn't expensive - Xbox 360 is overpriced

[staticneuron]

Wow, haven't been reading news much? Universal is the only movie company on the board of HD-DVD. While the Blu ray disc association is comprised of almost everyone else. http://en.wikipedia.org/wiki/Blu-ray_Disc_Associat ion http://www.blu-raydisc.com/general_information/Sec tion-14009/Index.html Before you say something along the lines of HD-dvd having more going for it than blu ray is purely selective.

BREAKING NEWS

[Silent sound]

Games: Playstation 3 launch at risk from giant turtles
Posted by CmdrTaco on Monday September 25, @10:00PM
from the could-things-get-any-worse dept.

An anonymous reader writes

On top of Sony's other problems, analysts are now predicting that the Playstation 3 launch may be at risk of attack by Gamera, a radioactive turtle from beyond the dawn of time. From the article: "If Gamera the giant firebreathing space turtle lands on their offices, they'll bit in quite a bit of trouble too, and that's about as likely to happen." I don't think there's any question at this point that Sony is doomed.

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.