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Nintendo Profits Up 72%, Sony's Down 94%
Gamasutra is reporting on reporting, with financial information from some of the large gaming companies becoming available this week. Nintendo, who had already previously raised projections, saw their profits up 72% over last year. This dramatic increase was credited largely to the DS, with 10.9 million units sold in the first six months of this year alone. Sony, on the other hand, dropped profits by 94% over this time last year. The company attributes this largely to the battery recall and PS3 start-up costs. From the article: "The company's games division reported a ¥43.5 billion ($366.6m) loss, from a ¥8.2 million ($69,000) profit in 2005, thanks to research and development, manufacturing and marketing costs related to the launch of the PlayStation 3. Sales and operating revenue were down by 20.5 percent to ¥170.3 billion ($1.43bn). A decrease in hardware sales worldwide was attributed to a drop in price for the PlayStation 2 and PSP. Software sales also decreased overall, although individual PSP sales were up on the previous year. Combined profit from the PS2 and PSP business was described as 'relatively unchanged'."
selling their rootkit...
Nintendo is garnering a great deal of good will (though the one controller in the package is a little bit of a setback) while Sony continues to tick off its customers. With Sony's latest move against Lik-Sang, the movement to boycott Sony is stronger than ever. So even after Sony can no longer claim the PS3 launch as a major cost, their profits are liable to keep dropping. Which will only cause them to make another stupid move (perhaps incarcerate their customers?) which will draw even MORE boycotts. Their profits will drop, and the investors will start getting nervous. And then....
Well, he're hoping for a bright future with the current lot of executives FIRED.
Javascript + Nintendo DSi = DSiCade
Over there, they take a longer term view and do not live and die by the quarter like they do here in the US. This is partially cultural. It's not necessarily a good thing but it is a factually true thing. They are more forgiving for this kind of financial result than investors in the US are.
However, another, and not necessarily helpful reason for this patient view is that the equity owners who normally would jump ship are often also the debt holders of the corporation. This is almost unheard of here in the US and the result in Japan is that corporations are more likely to ignore long term problems with a corporation because the best solution (dumping shares) would hurt their debt value so they tend to stay the course and hope for the best.
Sony profits went from 28.4 billion yen last year this quarter to 1.7 billion yen. The battery recall cost 51 billion yen. (via Yahoo!) So, had the battery recall not happened, Sony's profits could have increased (up to 85%, depending on the accounting magic with the recall) even given the development costs for the PS3.
Sony's gambling right now. With profits down and so much money into their new gaming system, time will not bode well for them unless they sell a LOT of $500 - $600 PS3's (and additional games with them). I'd rather have a $600 computer that a $600 console.
Funnypics
http://www.vgcats.com/comics/?strip_id=212
:)
Not much more really needs to be said
Where by "stronger than ever" you mean ".005% of their customer base."
.005% impacts their bottom line, you need a reality check.
Nothing Sony has done to anyone has had any effect whatsoever on its profits. If you honestly think
The United States of America: We do what we must because we can.
would make it purfect for mii.
Wouldn't Sony have spent more money on "research and development" for the PS3 last year versus this year. Usually when right before launch, one would hope that part was more or less done :) The marketing has been limited at best (for now), and we all know their manufacturing costs can't be that high :p
(I'm actually surprised Sony hasn't received the Apple treatment - "Beleaguered Sony")
I care that they both have consoles launching and I am interested in trying both. I am interested in the launch lineup. I'm interested in specs. Controllers. Formats. But quarterly reports, do we really care that much?
Anyways, I hope Sony learns from their mistakes and improves. I will vote with my dollars accordingly until they stop behaving badly. I don't want them to "die", as some posters have mentioned; besides being exceedingly unlikely, Sony has made great things in the past. It would be nice to see a return to form, specifically for SCE and Sony Electronics. The media arms I have no use for.
If Jesus wants me it knows where to find me.
Could you please remind me of the profitability rates of Microsoft Xbox division?...
Thanks for this new piece of Sony bashing, but I am quite fed up already.
RIP Slashdot. I used to love you. dead account - but slashdot wont let me delete it.
Nintendo have never the good guys. Though I admire their business model of taking risks and letting the consumer vote with their wallets, Sony have always played it safe and in fact allowed for far more "creative freedoms". It's only their cocky approach and shoving Blu-ray down our throats that's intolerable, as well as their PR propaganda. I hope Sony will learn some important lessons this time.
Re-read. They specifically give the numbers of the Sony games devision. It's even quoted in the summary.
at the end of the day though, Sony is still turning a profit. albeit a much smaller one.
DRM Rootkit Lik Sang Arrogance Emotion Engine Massive Damage
I would expect Nintendo's profits to continue to grow. The Wii is going to be, once again, an ingenious product. Plus Nintendo understands that the game market is already saturated with gamers. So their solution is to simply create new gamers, by inventing new games to interest those that would otherwise not find games enjoyable.
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One thing to keep in mind is that Sony doesn't quite have the negative image in the rest of the world that it's acquired in the US. And it's not necessarily a view held by the average person, but specifically within the gaming community and even more specifically within sites like Slashdot.
I know people who still like the Sony brand and don't know or care about Sony's problems. Things like DRM mean absolutely nothing to them because as far as they're concerned it isn't going to change anything.
I also know gamers who may be curious about Nintendo but still see it as a company that produces games geared at kids. These are the kinds of people who care about HD, who are fixated on fancy graphics over unique gameplay.
So Sony's loss doesn't necessarily reflect a change in the public's perception of the company. I tend to agree that it's connected to the battery recalls.
I personally could care less about the next-generation consoles, although I do hope Nintendo does well. And I do tend to avoid anything from Sony for the numerous reasons indicated on Slashdot. On the other hand, the jury is still out on who's going to dominate when the PS3 and Wii are finally released. I certainly don't think it's quite as cut and dry as some are claiming.
[quote] Nothing Sony has done to anyone has had any effect whatsoever on its profits. If you honestly think .005% impacts their bottom line, you need a reality check.
[/quote]
Or to re-phrase
Sony's profits or losses are due to fairies and the movements of the celestial bodies. Nothing the company does affects their bottom line.
It will just be really interesting to see the end result of all this. Sony has been so dominant in the games market for the last few years, and it would be so different to actually see them losing ground to Nintendo in the first time basically since they've been in the gaming business.
Do I sense a turn of the tide here?
I guess the fire sale on used laptop batteries isn't helping Sony that much.
http://ctrlaltdel-online.com/comic.php?d=20061011
-Tim Louden
Corporate shill, or Sony fanboy? You decide!
94% down eh? Ouch.
... hmm how did he put it at E3? ... buy PS3s "because."
But don't worry - Sony will laugh all the way to the bank when you
In all seriousness it's expected for their profits to be in the gutter with the development of the next gen console... the real surprise here is that Nintendo's profits are UP when they have been developing the Wii - sure it's a less intensive system that is probably lower in price, but a 'next gen' console should still suck up a bit of profits.
Im not sure where community relations falls into this since E3 but it's been 6 months - I wonder if there is significant impact by Nintendo's positive view in the limelight in comparison with Sony's more arrogant and egotistical stance (IMO.)
Its Deluxe, son. Deluxe!
There obviously aren't any Slashdot members who can balance a checkbook. You're comparing apples and oranges. Sony sells a LOT more things that impact their bottom line much more than the PS2/PS3. Nintendo is a one-trick pony. Sony is well-diversified. Completely different companies.
Seriously though, at some point gaming became like sports teams and pickup trucks.
I half expect to start seeing 360 faceplates that say "Sony Sucks" and DS stickers that show Calvin pissing on a PSP. Gamers seem to be so caught up in the rhetoric these days that it's getting harder and harder to find sites where people are actually discussing... what are those things called.... oh yeah, games.
As noted in other responses, the current numbers reflect huge one-time costs for Sony which should start to see good returns in the next quarter.
Can't we all just be happy that both companies are going to succeed? Why is this a war at all? The world needs Nintendo, and so shall it be. But Sony has a lot to offer as well and so do the Japanese game makers that flock to the Sony console... and this round the PS3 is region free for games.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
No kidding. Its rampant. Tribal identity and all that, I guess. I had a PS2, and I spent many a happy hour in front of that thing, but when Nintendo would release a nice GameCube game my first thought was certainly not 'ah fuck them', it was 'cool, looks interesting, good for them, maybe I'll rent one'. I really don't understand the animosity but then again I don't understand (as in, can't relate to) the car brand rivalry either. I guess it'll always be around.
If Jesus wants me it knows where to find me.
although, I have to admit, I'm glad I sold my 400 shares of Sony in March 2006 and bought 500 shares of Nintendo (NTDOY.PK) at the same time.
People fail to remember that tech always goes thru revisions. Sometimes the player one year (IBM) loses to an upstart (MSFT) and they lose to another upstart (RHAT) who get their shorts handed to them by yet another former big player (ORCL).
-- Tigger warning: This post may contain tiggers! --
Sorry, people keep bringing that bit up, but WHY did Sony need to do that? Sounds to me like something a company would do if someone was not listening to their requests(i.e. stop selling PSP's to the UK), and that the company had problems legally reaching someone in another country like Hong Kong, China based Lik-Sang....
And what time frame did these suits occur, and what were the results of each? People keep making it out like Sony sued Lik-Sang all at once.....
But it would be easier to discuss the games right now had Sony not pushed the launch back repeatedly due to things like propping up their other divisions by cramming unnecessary technology into the base product. Even after November comes and goes, a notable chunk of the world will still have to make due with hype and FUD because they still won't be able to discuss the games.
In the meantime, let's try to focus on the fact that Sony's corporate difficulties this year are not the wholesale invention of a bunch of fanbois. This is a real company, making really big mistakes.
The idea that a company like GM woudl go bankrupt in any kind of reasonable timeframe is pretty ridiculous.
GM is not an Enron or Worldcom, with billions of billions of net worth tied up in "IP" and "market rights" (aka fake money). Gm's value is largely badsed on real world assets. They have a huge number of plants, huge real estate holdings, global infrastructure. If they really got the screws turned on them they could just shut down 50% of the company, focus on a nieche US-only market, and they'd still be well wtihin the Fortune 500.
If GM doesn't get it's act together soon, it will be facing a buyout by Toyota or Honda, sure... but bankrupcy is far far off.
The average gamer doesn't know who or what Lik-Sang does. Neither do they know about the rootkit fiasco. They may have heard about the laptop battery recall, but they may think "that's not games". Besides, companies nowadays get away with recalls w/o affecting their image too much.
The biggest thing your average gamer is going to notice, though, is simply the price and available of the console. First of all, it's expensive. And second, even if they wanted it, chances are they can't get it. But with the shortage, you know the PS3 is going to sell-out, since it doesn't take that many PS3 fanatics (or eBay entrepreneurs) to create one. In the end, it's those things that are going to negatively affect Sony's business, not the other issues.
-- jchenx
I meant to say Schadenfreude for Fanboys. Messed up my whole pithy analogy.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Here's a snippet from the article:
Obviously MS should get a nice sales boost of the 360 over the holiday season, especially from gamers who aren't able to get their hands on the extremely limited PS3. It'll be especially important to see how Japanese sales go, thanks to the new Blue Dragon bundle.
-- jchenx
our latest thing... paint with your brain. it's cheaper than getting BrainAge, and probably more fun. works great with firefox, and less filling
By which country's test laboratory? Underwriters Laboratories offers "UL Listed" service in Canada and the United States, but other countries may not recognize it. I've noticed that my Nintendo DS (for United States) doesn't carry the CE marking required for goods sold in the European Economic Area. In fact, goods designed for one country might fail tests for another country, given that different countries have different standards for mains power supply voltages, for mains power supply connector shapes, for permitted radio emission frequencies and power levels, etc.
...just more predictable Slashdot shit.
Wii know what you're talking about.
But which platform allows for homemade games, such as games by developers looking to demonstrate their skills in order to get a job at a game development studio?
Don't they also reflect analogous one-time costs for Nintendo, which is putting out its own new console?
With the record of poor corporate citizenship on Sony's part (including David Manning, the music disc rootkits, cat-and-mouse against freeware authors on PSP, nuisance lawsuits against Connectix and bleem!, attacking the gray market, poor warranty service, supporting the party line of both MAFIAA divisions, etc.) and Microsoft (most notably using its Windows monopoly to push out other makers of web browsers and media player software; see Criticism of Microsoft), Nintendo is all Wii have left.
"The company's games division reported a ¥43.5 billion ($366.6m) loss, from a ¥8.2 million ($69,000) profit in 2005"
Wow, it'll take a long time to recover the $366.6m dollar loss at that rate! Somewhere around 5000 years.....
Blue Dragon Bundle? PFfffffffffft No one is ever going to buy a 360 in Japan. The PS3 will be outselling the 360 in Japan as soon as Sony ships enough of them there. I don't have any hard numbers for figures, but the 360 will certainly be behind the Wii in Japan at the moment of the Wii's launch, and the same might be true for the PS3 if Sony releases enough of them. I would be willing to bet that the PS2 continues to outsell the 360 in Japan for another 2 years.
I'd be willing to bet that the PS2 continues to outsell the PS3 in Japan for another 2 years.
You forget this is slashdot, where all analogies that don't support the current agenda here are invalid.
Apparently you missed the news item: http://www.joystiq.com/2006/10/19/blue-dragon-hel
Blue Dragon pre-order bundles have been selling quite well in Japan. The limited edition ones have all sold out, I believe.
Oh, I certainly agree that the PS3 and Wii will still do far better than the 360, but just wanted to point out that there have been some surprises recently.
-- jchenx
Battle Chess kicked my ass at chess almost 18 years or so ago.
My other first post is car post.
when th next gereration consoles were to be released nintendo was the only one not cracling about their gaming console.. playstation and xbox will be
The fact that they've reduced their losses by over $77 million does bode well for their expected profitability come 2008. At this rate, they'll be making a profit on the Xbox 3600 in early 2008.
just some guy
The Market has moved on to newer, different, and better products. Get over it.
(I won't even mention the exploding batteries or root kit trojans as a factor.)
Many factors can be considered in Sony's decline, but Here is a brief summary:
Sony PS3 vs the Wii
The drop in profit by a company such as Sony can only mean greater profits for American companies i.e. Microsoft, for they are able continue selling their products, the xbox 360, at current prices without having todecrease the price point to compete with the PS3's release, trust me, this Christmas will be big winner for Microsoft and not for Sony, because it is the parents that but the video games not the children, only the super rich families and men in their 20's that have extra cash laying around will be able to afford the the PS3 at its 500 and $600 price points, making the Xbox 360 look like a bargain to everyone else, even at its higher price point of $400.
Sony is putting every dime they have into BP-06. Judging by the buzz on the internet and the complexity of the BD spec, it's the biggest product they've ever launched. It's like Howard Hughes putting every dime into Hell's Angels or George Lucas putting every dime into Starwars. Usually if they gamble this much on a product it's because they know they're right and they're usually right.
The PassMe and PassMe2 hacks aren't hardware based; they rely on bugs in the firmware, just like most PSP hacks (other than GTA:LCS savegames) do. NoPass has a better claim to be a "hardware" exploit because the card emulates the cryptographic handshake (which isn't really a signature) that official DS Game Cards perform. Besides, Microsoft has been modifying the Xbox hardware to keep hackers out.
Hardware-based? Yes, the DS hacks require a NoPass card and a suitable GBA flash card (the latter of which may become unnecessary once DS-Xtreme becomes a reality). But the PSP hacks need a sufficiently large Memory Stick PRO Duo card, which is "hardware" too.
Which only makes Sony fanboys even more stupid if they fail to see through Sony's less subtle tactics.
"Standard" CDs and DVDs? PlayStation and PlayStation 2 use optical discs with intentional bad sectors. Are those standard? Xbox and Xbox 360 use optical discs in a format other than ISO or UDF. Is that standard? The major difference between a GameCube disc and a plain old 80 mm DVD is 1. a proprietary file system (like Xbox) and 2. the crypto keys stored in the DVD Burst Cutting Area.
Sony is not Enron. Enron is not Sony. Enron fakes loss as profit. Sony shows loss as LOSS. Sony is not sinking this time....
Just one question, why don't you think Nintendo can be serious competition?
...
You never really explained that
They are on the rise, no doubt about that. But they have no desire to be the whole multimedia giant that Microsoft is in the gaming space, or really plans to work into home entertainment the way Microsoft and Sony are thinking.
I don't think it's impossible for Ninendo to be that kind of company, but I'm also not sure I want them to be.
And I still hold this opinion even if the Wii outselles the 360 and PS3 combined (which it probably Wiill (that's a Wii joke, laugh!).
I was never one of those people that saw Sony as any kind of serious competitor in the handheld space. It that space, the roles are reversed and I don't think Microsfot or Sony could sucessfully take on Nintendo there. But that's because that space is much more focused.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you only include PS2 software sold in America, the number then is only a few orders of magnitudue more than what the Gamecube sold. Sorry.
Nintendo is doing something different and smart, they are trying to drow the market in a direction is has not been before and the Sony and PS3 cannot really follow. But that doesn't mean the space they are growing into is as large or as meaningful to the overall consumer electronics industry.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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What bugs me most about this whole mess with Lik-sang is that it shows how broken globalisation is.
Companies have the right to ship my job to a country where they can get stuff done cheaper. But I don't have a right to buy their products from a country where they are cheaper.
We've seen this with Levis and Tesco and with the BPI and CDWOW. Why can't I ALSO benefit from globalisation ?
They modded you troll? They should have modded you funny.
...that although your average Sony consumer will have no friggin clue what a rootkit is, when the media or a tech-savvier friend describes the rootkit as a *virus*, as they have and will, that has a huge impact.
While "rootkit" is incomprehensible to your average joe, a *virus* can destroy his computer and stop joe from getting to his football scores. Or stop Joanne from getting to her shopping. Or even steal either one's personal info and stop the happy couple from getting to their money at all.
Computer viruses are the bogeyman to most computer users, and getting the idea (correct or not) that Sony may have knowingly put one on their computer, without their ability to detect or remove, means a great deal.
I knew Nintendo was on to something when they offered free online gaming for the nintendo DS. the new console is going to take that further. Sony is getting greedy closing down great shops like lik-sang. Forcing DRM down our throats. Good for nintendo!
Nintendo has been out selling Sony for quite some time. Once you factor in Nintendo dominance in the handheld market its not even close.
"They said we drink horse urine and sleep with our own kin. You say it's comedy, but how can someone laugh at that?"