Will Sony stop making video games?

[nebrazca78]

I just got the latest issue of Wired today and it has an article about Sony and the PS3. There are a lot of interesting facts in the article that make it clear that Sony is in trouble and may be coming to a crossroads concerning video games. It basically says that if the PS3 isn't a hit, Sony will probably have to stop making video games. Here are some interesting facts from the article (some if this is older news):

Sony's electronics division (2/3 of their revenue) has been losing money every year of the past five years except 2003, 2005 and 2006 showing the biggest losses.

Sony has cash reserves of $6 billion compared to Microsoft's $38 billion.

The PS3 will cost $600 for the premuim package.

Peter Moore who was head of Sega when Sony trampled it is now the head of Xbox operations.

The inclusion of Blu-Ray is the reason PS3 has been delayed.

Sony is losing at least $200 on each PS3 sold.


That doesn't look too good for Sony. The article has a funny quote from an unknown source about Sony "pulling a Sega", going from #1 to being out of business in a short period of time. I'm sure they won't actually go out of business, but is this Sony's last chance at making consoles/games?

[vultar]

When exactly was Sega ever #1? They always felt more the eternal bridesmaid to me. I don't know, Sony seems to be doing everything in it's power to shoot itself in the foot, but then again I seriously doubt that the PS3 will out and out fail either. Personally I can't afford $600 for a toy, that's not going to stop me from buying the games that interest me that come out for it, but it'll be a long time before I own the system. Part of me hopes that Sony's pricing blows up in thier collective faces, and they figure out that maybe making videogame systems means making videogame systems and not whatever Sony seems to think they're making now, and the other half wants the PS3 to do alright because, right now, that's the system I feel will have the most games I want to play on.

[7th lutz]

When exactly was Sega ever #1?
Sega was #1 for most of the 16bit era in the United States. They were number #1 going into 1994. They were first were #1 in 1991.

[7th lutz]

I think there is a chance it will happen. Sony screwed up with the psp by using the umd format. The umd format was picked because movies and the movie side of the psp did so bad the Walmart nolonger carries them, and target only sells them online. Sony for the last few months in the united States hasn't had a psp game in the top 25 in the last few months will having good psp hardware sales in those same months and there is not much a difference in the states in hardware sales between the ds and the psp.

With the ps 3,

Sony will not sale as well in Japan due to Wii and I expect sony to get maybe a 30% market share for games at best. The Wii is a system that is up to the Japanese alley. I don't know how well the Wii will be in Europe. I expect the Wii to be in 3d place in the states. Worldwide sales is a bigger factor then the sales in the states for SquareEnix. SquareEnix hasn't decided on what platform Dragon Quest 9 will be on. This is huge in Japan. Dragon Quest series is very popular over there. Sony will have problems if Blu-ray movies sell great and be played on the ps 3, but not many games are being bought for it or vise verca. Sony also has a problem with the price of the ps 3 if sony's rep. for having durability problems with hardware. For myself $600.00 is to much for a game system.

While Sony having ps 3 as there final systems is a possibility, so is Microsoft with the 360 in Japan. If Microsoft does as poorly in Japan with the 360 as the xbox was as it appears, then Microsoft is considering getting out that market.

[j_factor]

When exactly was Sega ever #1?
Sega was #1 for most of the 16bit era in the United States. They were number #1 going into 1994. They were first were #1 in 1991.

And in Europe they were #1 from shortly after the release of the Master System in 1987 until Playstation overtook them in 1995. In Japan, they were #1 for a while with the Saturn, like 1995 to early '97.

Anyway, even if PS3 bombs and forces Sony to leave the console business, that doesn't mean they'll stop making games. The amount of game development they own is significant and brings in a profit, so I don't see them suddenly shutting them all down just because their console hardware business takes a nosedive. They were releasing games before Playstation was around.

[retroman]

Its not gonna flop....so fat chance of that happening.

[kentuckyfried]

Its not gonna flop....so fat chance of that happening.

It is hard to imagine a world without a playstation, but anything's possible. There's just so much negativity attached to the PS3.

[Richter Belmount]

remember a world without a new sega system?

[Xizer]

A world with the PlayStation line no longer existing?

Where do I sign up?

[SkiDragon]

If the question is whether or not there will be a PS4, dont worry, there will be.

After all, Atari had it's Jaguar, and Sega had its Dreamcast.

[Half Japanese]

Since when did everyone and their brother become an "analyst" and since when did analysts do anything but blow hot air to effect stock prices?

Why not just sit back and let things happen as they're going to. Sure, you won't be able to look back on certain things and say "I told you so!" but you also won't look like a spastic douchebag.

"Why can these people not understand...there's nothing worse than a bored man..."
- The Fall

[Push Upstairs]

I think the number of people hoping Sony will fall is on the rise.

Funny how this type of talk was reserved for MS some years ago....ya know like how not doing well in Japan somehow meant that the XBOX was going to flop worldwide. :roll:

[Ed Oscuro]

Since when did everyone and their brother become an "analyst" and since when did analysts do anything but blow hot air to effect stock prices?
When analysts gave their insight into what people wanted, and what approaches a company should consider...now aside from that, you're right, most of us have no business considering ourselves analysts (armchair analysts more like it).

Anyway, I for one do not hope Sony will fall. Their track record on controlling the quality of third party releases hasn't been any worse than Nintendo's was when they were dominant; basically Sony's sins are an overpriced console and clueless execs, but that's about it. Competition in the market more than makes up for it.

[Lothars]

I think the number of people hoping Sony will fall is on the rise.

Funny how this type of talk was reserved for MS some years ago....ya know like how not doing well in Japan somehow meant that the XBOX was going to flop worldwide. :roll:

Yeah but just wait it goes in spurts, one company will always be disliked and it's not like MS is so popular, they still screw up a fair bit to.

[Lothars]

A world with the PlayStation line no longer existing?

Where do I sign up?

:roll: yeah ok, a typical post of yours

[NEOFREAK9189]

Sony will not sale as well due to Nintendo Wii

[Ed Oscuro]

Sony will not sale as well due to Nintendo Wii
Yeah, and they won't sell as well due to Xbox 360 either. In fact I have it on good authority that somebody's getting an x68000 for Christmas instead of a PS3. Is this going somewhere?

[Lord_Magus]

Is Sony going to stop making gaming hardware eventually? Definitely.

If you look at the three companies competing right now, you can easily see that Sony has always been the one in the most fragile situation.

Microsoft has seemingly unlimited resources, and can afford to make any sort of experiment they want. The first XBOX was a billlion dollar loss for Microsoft, and still they went ahead and made the 360 without thinking twice. Even if they continue to lose money on their consoles, you can almost guarantee that we will see more XBOXs in the future. Microsoft isn't going anywhere, anytime soon.

Nintendo on the other hand has always had the most loyal followers, and even now is the most genuine and respectable gaming company of the three. Additionally, they seem to be making the smartest business decisions as well, and you can guarantee that although the Wii will be sold at a much lower price point than their competition, they will almost definitely be the only ones making a solid profit from day one. They've been through a few rough rides, but Nintendo is here to stay.

Now, the main thing Sony had going for them from the start was brand recognition and (subsequently) 3rd party support. Countless consumers have bought PS1s and PS2s simply because of the brand name. With the increased popularity of gaming however, the public is now more informed (or bombarded with more ads, depending on how you look at it), and people are aware of other choices as well. People aren't blindly going to buy a Sony product like they did a few years ago (especially not with those prices and known reliability issues)

You see, gaming is indeed changing, but not as much as Sony's execs would like (you) to believe. No one can justify paying so much for a console, and with their "holier than thou" attitude Sony is driving away not only their consumers but their 3rd party support as well. Even if Sony outlives this generation, they'll most likely end up just making games for Nintendo and Microsoft in a few years from now.

Anyway, in the grand scheme of things, whether or not Sony dies out in the next few years is irrelevant. Regardless of what happens to them in the next console generation\war, I think that in several years from now the gaming world will be defined by two simple truths:

PC Gaming=Microsoft
Console gaming=Nintendo

Thats my 2 cents anyway :)

[Doom Gaze]

A world with the PlayStation line no longer existing?

Where do I sign up?

QFT.

Although I wouldn't deny that a multitude of great experiences are to be had on Sony platforms, the Playstation brand played an irrefutable part of the McDonaldization of video games. It's one thing for certain games to be for jocks or whatever, but it's another when you refuse to allow 2-D games on your system to choke out the past.

Edit: As much I would like to see the Playstation empire crumble, it's a long way off, and if (when) PS3 struggles, PS4 will come around regardless. If Sony's still losing zillions after that, then we can talk the end.

[Emuaust]

Id be more happy if there where no Nintendo or MS, IMO
but hey what ever floats your boat.

[Sothy]

Sony is still in the Game.

They just aint as invincible as they thought.
PS3 might flop... but there will be a PS4.

[heybtbm]

Sony won't fail with the PS3. The absolute failure of the 360 in Japan ensures the PS3 at least some success. Either that or the Japanese are going to be hanging on to their PS2's for the next 8 years.

[chrisbid]

what will constitute a "flop" for sony? will they have to maintain a huge lead to remain profitable? will a thin margin first place or second place help them in the long run? all thats for sure is there is little chance for sony to maintain their current market share, and this can be pointed directly to the 600 dollar price point, and convergence of blu ray

[chrisbid]

what will constitute a "flop" for sony? will they have to maintain a huge lead to remain profitable? will a thin margin first place or second place help them in the long run? all thats for sure is there is little chance for sony to maintain their current market share, and this can be pointed directly to the 600 dollar price point, and convergence of blu ray

[Doom Gaze]

Sony won't fail with the PS3. The absolute failure of the 360 in Japan ensures the PS3 at least some success. Either that or the Japanese are going to be hanging on to their PS2's for the next 8 years.

If it sells moderately well, they lose money. See: PSP v. DS, where Sony is being outsold madly (Especially in Japan) and at the same time taking a huge hit on the hardware; the software doesn't sell so they lose both support and royalties. Japan seems to be making the first switch back to Nintendo since the Super Famicom days, and the huge interest in Wii there could overshadow PS3 like DS (especially Lite) eclipses PSP.

If it doesn't sell, they lose money. Yeah.

If it sells like mad, they lose money until the hardware sales justify and mitigate their loss. That's what they have to hope for, and seem to arrogantly think will happen. Maybe they're right but Nintendo thought the same thing about their name's recognition and we all know what happened with 64. The audience is fickle. Most gamers are not fanboys and will turn to whatever is cool or whatever appeals to them.

Will there be a Playstation 4? Yes. But if it isn't huge it's a likely Dreamcast/PC-FX/Jaguar.

[smork]

Why do people assume Microsoft will continue to willingly take huge losses on its gaming divisions?

Remember, folks, MS, along with Sony is a publicly traded company, and as such is responsible to its shareholders. Investors don't look at a company, see a huge market cap and large cash resources and say, "Wow, that $1 billion lost doesn't bother me in the slightest!" Believe me, if MS continues to bleed money in its gaming division regardless of it's increasing market share the shareholders will start to rebel. Companies are in business to make money, you know.

This is tangential to the asked question -- and I think Sony will eventually start to question being in the gaming business if it's not profitable for them. I suspect as long as a decent number of units are bought of the PS3 (which I think is likely, too big of an installed fanbase to be an insta-flop) their games division (as seperate from hardware) will thrive. Money's on games with these systems anyway. But, as with MS, if they are not profitable, don't expect them to stick to it. It's not as if Sony doesn't have other product lines outside of gaming (though those are admittedly pretty weak these days).


A world with the PlayStation line no longer existing?

Where do I sign up?

Do you ever post anything that's not flamebait, or is that your sole reason for sharing here?

[poloplayr]

Stupid question but who here gives a shit about BluRay? I have my DVDs and couldn't care less about some visual upgrade to my films. DVDs are good enough.

[jajaja]

Stupid question but who here gives a shit about BluRay? I have my DVDs and couldn't care less about some visual upgrade to my films. DVDs are good enough.

Didnt people say this about VHS and BETA back in the days? Most of the things that are today are good enough, but still new and better things come. Its always been like this.

[j_factor]

Stupid question but who here gives a shit about BluRay? I have my DVDs and couldn't care less about some visual upgrade to my films. DVDs are good enough.

Didnt people say this about VHS and BETA back in the days? Most of the things that are today are good enough, but still new and better things come. Its always been like this.

Yeah but VHS lasted a long, long time. Who's to say that blu-ray isn't the next VCD?

[jajaja]

VHS and VCD is about the same quality. DVD and BR (or HD-DVD for that sake) isnt. Im sure you dont want to go back to DVD if you see BR or HD-DVD on a proper system :)

[nebrazca78]

Its not gonna flop....so fat chance of that happening.

Is PS2 a flop? I don't think there is a single person who could honestly say it is. But the fact remains that even though PS2 has outsold all other current consoles, Sony has been losing money on the PS2 for almost it's whole life. Microsoft is losing money. Nintendo Gamecube, while most people regard it as the #3 console, is making money for Nintendo. And now that they have the DS they are positively raking it in. Nintendo focuses on games over having the most powerful console ever. Their hardware is cheap (for them to make AND for us to buy) and it has tons of great games.

I can tell you this. PS3 will sell out instantly everywhere. But after you've spent $600 on the system alone, how many games are you going to buy? 1? 2? There aren't enough rich people out there that buy video games. One of the biggest differences between PS1 and Saturn was that the average Saturn owner bought 3 times the amount of games for their system than the PS user did. Now, when you sell 20 million consoles or whatever that does pick up the slack, but the main thing is Sony needs to sell games! If they are losing over $200 on every PS3 right now, they are going to be losing money on consoles for a LONG TIME. Probably years.

I just think Sony and MS are pretty stupid losing so much money on console sales and then (so far) not being able to make it back.

[Push Upstairs]

Didnt people say this about VHS and BETA back in the days?

VHS won but Beta survived to this day.

Its used professionally (like at TV stations).

[RegSNES]

Well it does seem a bit early to be talking about Sony's demise in the gaming biz, but it really is hard to say that things will be all sunshine and roses with the PS3. Most people just can't afford the system. And those units that Sony does sell, they lose a lot of money on.

As for Blu-Ray, I'm sure it looks nice but I'm not willing to shell out the cash for a PS3 to get that added bonus. If the Blu-Ray in the PS3 is anything like the PS2's DVD player, well, that isn't exactly anything to shout about.

Right now, Sony seems to be it's own worst enemy. The company's arrogance has really gotten the better of them and they've been making bad decisions. I woudln't be surprised at all if some third party support for PS3 was already having second thoughts about supporting the system.

Having said all that, competition is good for the industry. Time will tell if Sony will still be in the game biz over the next few years. I hope they stick around, but change the way they do things.

[jajaja]

I can tell you this. PS3 will sell out instantly everywhere. But after you've spent $600 on the system alone, how many games are you going to buy? 1? 2? There aren't enough rich people out there that buy video games.

At launch maybe, but 2 weeks later (or a month) you get your paycheck and the problems with buying new games are solved :)

It seems that people think PS3 will fail big time just because its $600 in USA. Sure, there live alot of people in USA, but dont forget about Europe and Asia. When PS2 came out in Europe it was much more expencive than it was in the US. Still, it got ripped out of the stores. I remember seeing on the news from a store in France, people went nuts, seriously. It was a fight to get the PS2.

In my country the PS2 was $815 at launch, still many bought it. I have seen some stores here started taking pre-orders on PS3 and the price is $900. And belive me, people do pre-order at that price. I've seen a few people that have pre-ordered on a forum i use to visit. $900 is alot of cash over here, but its not like OMG much.

[lendelin]

Well it does seem a bit early to be talking about Sony's demise in the gaming biz, but...

Ain't that the truth.

People, c'mon, I understand Internet hype, I understand some qualified and unqualified analysts engaging in hype, I understand the fun of speculating....BUT...to predict the demise of THE undisputed marketleader based merely on a price tag is gaga as is to assume that Sony will dominate down the PS3 road as they did on the PS2 road.

The uncertainty is simply how many machines will be sold at a certain price the first two holiday seasons. That essentially decides the race. (what an insight, eh? :)

...and because noone can be certain about the most important aspect of success, I take a more relaxed attitude with a mixture of empirical experience and feeling:

The 360 will catch up big-time to the PS3. I expected anyway a close race, but the hefty price tag strenghtens the 360 dramatically and I expect a 50/50 marketshare when it comes to hardware and games sold.

To pay $200 less for a very competitive gaming machine is a big factor for families and the average gamer. MS increased its reputation as a gaming company even with the hardcore crowd, it has momentum, and I don't see a sign that this momentum is slowing down. The Japanese market is THE challenge for MS, and a problem which has to be solved. To overcome the obstacle of the price tag with the help of image, clever PR, and exclusive games will be THE challenge for Sony.

How a possible decrease in profits of the gaming division affects Sony as a whole I don't know. The decreasing marketshares of Sony (especially compared to Toshiba and Samsung) in the last couple of years indicates some potential trouble, however.

[Nature Boy]

Didnt people say this about VHS and BETA back in the days? Most of the things that are today are good enough, but still new and better things come. Its always been like this.

Not even close. Did you have to buy a new TV in order to see the difference that a DVD gave you over VHS? Were 'composite ready' TVs not *way* more prevalent (and cheaper) than HDTV is now?

(And you could tell a big difference using only composite back then - I remember playing Total Recall on VHS and DVD at the same time and going back and forth and wowing at the better picture).

To answer the original question: who knows. I've yet to see BluRay marketed, so how can I know if the BluRay format takes off or not? Even though we have a cheaper console option (Wii) as video gamers, will the video philes not see the PS3 as their cheapest entry into the market? Could it not take off that way?

(All the haterz will say "So! Nobody wants to use it as a video game machine! It loses!" of course, but all that really matters to Sony is building an installed base - they care little if it's movie watchers or video gamers at this point).

[jajaja]

Didnt people say this about VHS and BETA back in the days? Most of the things that are today are good enough, but still new and better things come. Its always been like this.

Not even close. Did you have to buy a new TV in order to see the difference that a DVD gave you over VHS? Were 'composite ready' TVs not *way* more prevalent (and cheaper) than HDTV is now?

Ye, thats true about the TV, but im not saying that VHS is as good as DVD, that wasnt my point. My point was that VHS was good enough back in the days. Now that HDTV is getting more and more common DVD isnt "good enough".

I doubt anyone here have compared DVD to BR (or HD-DVD) on a proper system. Im sure you can see the difference.

[WanganRunner]

<Double Post, please delete>

[WanganRunner]

I think this is all getting blown somewhat out of proportion.

I do not think that this all spells the death-knell for Sony in videogames, although I do think that their market share will be substantially reduced from their current position of absolute dominance, and that will force them to rethink and re-engineer things a bit, sort of like what Nintendo has done for the last 8-10 years.

I think that MSFT and Nintendo stand to gain SERIOUS market share back this generation, especially at the beginning.

Sony is competent at designing flexible, capable hardware, although it's always had something of an egotistical streak (i.e. we're Sony, it doesn't matter how hard it is to code for our console, blah blah blah).

Honestly, what they're REALLY doing wrong isn't videogames, it's consumer electronics. Their failures in consumer electronics have forced desperate measures and bad decisions in their game business. They're getting beat to hell by Samsung in the United States and Matsushita (Panasonic) in Japan. Their mainline goods are still well designed and well marketed (i.e TV's, Recievers, tc...), but they spend WAY too much money on stupid devices that don't create any bottom line (AIBO, network walkman, other wacky crap).

They had a golden opportunity to turn the VAIO line into the gold standard of PC's and blew it via lack of marketing. Fantastic product, but it got trampled by Dell in the marketing department and will likely never recover.

[nebrazca78]

I don't understand why almost everyone who's posted an opinion on it seems to think that success is determined by market share. There is no way the PS3 is going to "flop", by that I mean not sell. BFD. How long can this company continue to lose money and still be considered the market leader and a success?