Sony to Post Largest Quarterly Loss in 4 Years: ps 3 to blame

[7th lutz]

http://www.1up.com/do/newsStory?cId=3159517

Ken Kutaragi isn't the only executive at Sony who may come under fire for the current situation surrounding the PlayStation 3, as Bloomberg's predicting Sony will post its biggest quarterly lost in four years tomorrow, based on a median estimate culled from 11 polled analysts. Consequently, Sony's newish CEO Howard Stringer could start seeing some finger pointing heading in his direction, despite the solid performance of other divisions.
According to the Bloomberg survey, Sony's net loss for the fourth quarter ending March 31, 2006 was 66.5 billion yen ($553 million USD) -- but that number has increased to 77.6 billion yen ($630 million USD) in 2007. Despite Xbox 360's stumbling performance in Japan, its success elsewhere and Nintendo's resounding Wii sales worldwide compound a situation where Sony struggled to even produce enough PS3s early on.

Moving forward, Howard Stringer faces a problem: cut the price of PS3 and experience deeper losses in the hopes that it will produce a happier long term situation or stick it out.

[gepeto]

or become a cross platform software giant or merge with microsoft for total world domination

[8-bitNesMan]

or become a cross platform software giant or merge with microsoft for total world domination

I can see it now: The Sonysoft Xstation. Plays HD and Blu-Ray discs, slices, dices, and cooks a mean t-bone steak. For the low low price of $1999.99!

[heybtbm]

Everyone should buy 4-5 PS3's this quarter to help Sony out. Problem solved.

[Alucard79]

Not siting sources, but if I recall correctly, Sony had planned on taking the huge losses with the hardware and sales, but was focusing on the long term ten year cycle in order to produce profit. Personally I don't care, I like my PS3, I like my 360. If they lose or make money it makes no difference to me.

[Nebagram]

I can see it now: The Sonysoft Xstation. Plays HD and Blu-Ray discs, slices, dices, and cooks a mean t-bone steak.

Sony've already got that last bit down to fine art! :-)

[Hep038]

Not siting sources, but if I recall correctly, Sony had planned on taking the huge losses with the hardware and sales, but was focusing on the long term ten year cycle in order to produce profit. Personally I don't care, I like my PS3, I like my 360. If they lose or make money it makes no difference to me.

True ,I am sure they would have like to sell more PS3's and taken a bigger loss. They knew they were not going to make money, I am sure it was in their business plan so it is no big deal to them. This is just something to make the fanboys happy.

[nebrazca78]

Not siting sources, but if I recall correctly, Sony had planned on taking the huge losses with the hardware and sales, but was focusing on the long term ten year cycle in order to produce profit. Personally I don't care, I like my PS3, I like my 360. If they lose or make money it makes no difference to me.

You'd think they would've learned their lesson when that didn't work with the PS2. Sony has been losing money every year since what, 2001? Oh well, they'll get bailed out by the Japanese government anyway when they need to declare bankruptcy.

[Garry Silljo]

Everyone should buy 4-5 PS3's this quarter to help Sony out. Problem solved.

They lose money on the hardware.... so how does that help?

[Nebagram]

They lose money on the hardware.... so how does that help?

Better than them continuing to sit on the shelves unwanted...

[MrRoboto19XX]

They lose money on the hardware.... so how does that help?

I think the concept is called the Gillette principle. Ideally, you (the company) make back all of your money on replaceable aspects of your products. Gillette used this concept early on, selling the actual razors for low prices, knowing they would make the money back long-term in consumers replacing blades. In Sony's case, they hope to make back all the money with software sales, etc.

I still don't know what to think of the PS3, I love my PS2, but this is a horse of a different color.

[roushimsx]

Meanwhile Microsoft can't turn a profit on their console and adoption of the latest versions of Windows and Office are well below expectations.

The time is ripe for Sega to come out with a surprise console!

[Garry Silljo]

I think the concept is called the Gillette principle. Ideally, you (the company) make back all of your money on replaceable aspects of your products. Gillette used this concept early on, selling the actual razors for low prices, knowing they would make the money back long-term in consumers replacing blades. In Sony's case, they hope to make back all the money with software sales, etc.

I still don't know what to think of the PS3, I love my PS2, but this is a horse of a different color.

Yes, I get that, but he just mentioned buying multiple consoles, not games. Buying 5 PS3s hurts them more than helps unless I buy five copies of each game I purchase (1 per console).

[Hep038]

You'd think they would've learned their lesson when that didn't work with the PS2. Sony has been losing money every year since what, 2001? Oh well, they'll get bailed out by the Japanese government anyway when they need to declare bankruptcy.

So you are saying Sony did not make 1 penny with the PS2? I find that hard to believe, do heave a link for those figures?

[Captain Wrong]

True ,I am sure they would have like to sell more PS3's and taken a bigger loss. They knew they were not going to make money, I am sure it was in their business plan so it is no big deal to them. This is just something to make the fanboys happy.

I'm guessing you are right. Especially the last part.

[Ed Oscuro]

Meanwhile Microsoft [...] adoption of the latest versions of Windows and Office are well below expectations.

It would've been here, as well, if I knew the bastards weren't going to ship me the 64-bit version. Going to see if I can't get them to change course on that.

[roushimsx]

It would've been here, as well, if I knew the bastards weren't going to ship me the 64-bit version. Going to see if I can't get them to change course on that.

I'm still miffed that they decided to release two separate versions (32 and 64) instead of merging them into a single distribution. Way to fuck over the user base yet again, because they obviously didn't learn anything from WinXP 64bit.

Hopefully the next version of Windows will be 64bit only and we'll be rid of this lack of driver support nonsense. Seriously, if I wanted my hardware to be poorly supported (if at all), I would have just bought a Mac.

[Nature Boy]

I still don't know what to think of the PS3, I love my PS2, but this is a horse of a different color.

Actually I think they're both black horses

FWIW, I read an article today, on QJ.net, that suggested analysts think Sony will recover from these losses just fine.

EDIT: Read another article in today's Toronto Star saying pretty much the same thing. The PS3 is losing money hand over fist, but the rest of Sony's electronics division is doing quite well. They echoed the statements above - Sony is in fine shape and is actually doing well.

[Oobgarm]

True ,I am sure they would have like to sell more PS3's and taken a bigger loss. They knew they were not going to make money, I am sure it was in their business plan so it is no big deal to them. This is just something to make the fanboys happy.

Indeed.

Who wouldn't have expected a loss? Even one this big? Not me.

[Clownzilla]

Well, if Sony would actually make this system a "Home Entertainment Hub" like they said they would, I would buy one today (and even pay more for it). I want to be able to play PC games, ALL PS1, PS2, and PS3 games. I want it to be a DVR and a high def receiver also. It needs to be able to easily connect to services like Gametap, POGO, etc. I should be able to make video phone calls too. Most importantly, it needs to be homebrew friendly. Ok, they can take measures to block out bootlegging, but at least allow home programmers to improve the PS3 community with their skills. That’s what my idea of a "Home Entertainment Hub" is. Right now you can play PS3 games, most (but not all) PS1 and PS2 games, and do a few online activities. To be fair, I also fault Microsoft in failing to bring the Home Entertainment Hub promise.