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Old 01-29-07, 03:54 PM   #1
Athena
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Question Any one read this yet?

I see this title of a new read in the newest Gamedaily Biz Email I got today.

Report: PS3 May Drive Sony Profit Down 50%

The expensive PlayStation 3 may have cut into Sony's profits significantly for the third quarter ended this past December, Bloomberg.com has reported. The games division is expected to lose a record 191 billion yen by the end of Sony's fiscal year.

But I am at work so I can not read it. (site is firewal blocked)
Is this more hype by the new crowd dumping on the PS3 or is there any real info?
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Old 01-29-07, 05:17 PM   #2
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Default Re: Any one read this yet?

Here 'ya go:

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Originally Posted by article
The expensive PlayStation 3 may have cut into Sony's profits significantly for the third quarter ended this past December, Bloomberg.com has reported. The games division is expected to lose a record 191 billion yen by the end of Sony's fiscal year.

According to the median estimate of five analysts surveyed by Bloomberg.com, Sony's third-quarter profit may have fallen as much as 50 percent for the holiday period ended December 31, 2006. The report specifically singles out Sony's games division as the likely cause for net income dropping to 84.1 billion yen ($691 million) from a record 168.9 billion yen during the same period a year earlier.

The games division is expected to post sales of 390 billion yen, with a loss of 50.9 billion yen for the holiday quarter. For the full fiscal year ending in March, the games division is predicted to lose 191.9 billion yen, compared with profit of 8.7 billion yen the previous year.

The PS3 is estimated to lose upwards of $300 on each unit sold, according to a recent analysis by iSuppli.

Bloomberg says the results "may highlight Chief Executive Officer Howard Stringer's failure to fend off Nintendo, whose $250 Wii console outsells the PlayStation 3 by two-to-one."

"A drop in third-quarter results is largely expected on the games division. There's no surprise unless the company further reduces its profit forecasts,"' said Mitsushige Akino of Ichiyoshi Investment Management Co. in Tokyo. Akino added that investors should avoid Sony stock "until the company improves its earnings."

That said, sales at Sony as a whole for the third quarter are expected to rise 9.6 percent to 3 trillion yen, and Sony may still beat its full-year profit target because of a weaker yen, sales of Bravia televisions and growth at its movie unit.

Meanwhile, Nintendo (which claims to make money on Wii hardware) just posted record net sales and profits for the holiday period. Microsoft's recently reported earnings revealed a nice increase in sales for the Xbox division, but losses persisted and Microsoft cut its Xbox 360 hardware outlook for the second half of its fiscal year.
http://biz.gamedaily.com/industry/feature/?id=15086
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Old 01-29-07, 05:17 PM   #3
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Quote:
Originally Posted by Athena
I see this title of a new read in the newest Gamedaily Biz Email I got today.

Report: PS3 May Drive Sony Profit Down 50%

The expensive PlayStation 3 may have cut into Sony's profits significantly for the third quarter ended this past December, Bloomberg.com has reported. The games division is expected to lose a record 191 billion yen by the end of Sony's fiscal year.

But I am at work so I can not read it. (site is firewal blocked)
Is this more hype by the new crowd dumping on the PS3 or is there any real info?
I wouldn't dout it... its costly to get a new console on the market... remember each unit is costing Sony, this happens to every console developer (MS took a hit aswell when the X360 launched) except for Nintendo who is never cares to be on the cutting edge of technology.
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Old 01-29-07, 06:49 PM   #4
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Originally Posted by |MaguS|
except for Nintendo who is never cares to be on the cutting edge of technology.
Doesn't matter. MS, Nintendo, and Sony aren't in business to be on the cutting edge. They're in business to make money. Their share/stakeholders are all that matter at the end of the day.
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Old 01-29-07, 06:57 PM   #5
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They're in business to make money.
No ****, I was just stating that while Sony and MS always lose out per console made Nintendo is the opposite because they never push technology as their consoles selling point. Sony took a huge hit when the PS2 launched, a year later they were making tons of money thanks to software sales, its always like this. The money is really in the software, not hardware (well accessories are a good rev aswell).

It's like this alot with many services, Cell Phone companies take a loss per phone they sell but we make tons back for the service we provide. You really think it costs Cingular $50 a month perline? pfft maybe $10 (* 68 Million)
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Old 01-29-07, 07:01 PM   #6
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Quote:
Originally Posted by |MaguS|
Sony took a huge hit when the PS2 launched, a year later they were making tons of money thanks to software sales, its always like this. The money is really in the software, not hardware (well accessories are a good rev aswell).
On top of software sales, the PS2 made tons of money because it was the fastest selling console in history, and Sony was able to, in very short order, make back the money it invested for R&D and tooling.

With the PS3 selling far below the clip of the PS2 and the attach rate being so low, it's going to be much longer before it becomes profitable.
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Old 01-29-07, 07:05 PM   #7
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Quote:
Originally Posted by saturnotaku
On top of software sales, the PS2 made tons of money because it was the fastest selling console in history, and Sony was able to, in very short order, make back the money it invested for R&D and tooling.

With the PS3 selling far below the clip of the PS2 and the attach rate being so low, it's going to be much longer before it becomes profitable.
Thats why Sony is putting such a high bet on Blu-Ray, if sony can grab some of the people who just want a nextgen video player they make some money off Blu-Ray sales. Look at OWA, he had a PS3 for maybe a month and owns tons of movies already...

Sony knew the risk with the PS3, this isn't a suprise to them at all, hell the PS3 was hurting them prior to its release.
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Old 01-29-07, 07:46 PM   #8
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Default Re: Any one read this yet?

More official positions from magus from companies he doesn't work for nor represent...


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Old 01-29-07, 10:22 PM   #9
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Default Re: Any one read this yet?

FYI... As of September of 06 MS makes $75 profit per 360 sold. IMO the only way Sony is going to start selling the PS3 in large numbers is to have a decent price cut. While that might be great for new buyers current owners could fell ripped off for paying the initial high price tag.
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Old 01-29-07, 10:52 PM   #10
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Default Re: Any one read this yet?

Hopefully Sony learns their lesson and never makes another video game console.
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Old 01-29-07, 11:03 PM   #11
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Hopefully Sony learns their lesson and never makes another video game console.
Yes because the Playstation and Paystation 2 ruined console gaming as we know it...

Go play Nintendo 64, it was such an amazing system!
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Old 01-29-07, 11:26 PM   #12
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Quote:
Originally Posted by |MaguS|
Go play Nintendo 64, it was such an amazing system!
The N64 had some of the greatest games of all time.
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