Coinciding with the news that the PS3 is hitting rock-bottom sales figures in Japan, Sony has announced it is cutting its profit forecast by an alarming 57%.
While Sony had previously estimated a 470b profit for the period, the firm has made a shocking revision to that figure to account for the strong Yen that is cutting into Japan's export business. Sony's revised operating profit estimates relate to the full year ending in March 2009.
Sony said in a statement that it now expects an operating profit of 200b. Sony shares dropped 6.3% in Tokyo ahead of the announcement.
Sony has cited its games division as one of the key areas to expect a fall. "We expect our results to be lower than the July forecast with operating income decreasing by approximately 130b, mainly within the Electronics and the Game segments," the company said.
Multiple reports in Edge see the PS3 leaking sales in key areas such as Japan, the US and Europe. Earlier today we reported Famitsu's estimates that the PS3 sold just 4,800 units in Japan for the week ending Oct 17.
I suppose they're thinking a profit is still a profit. The price will come down after Christmas I would imagine. Toshiba are making 45nm Cell chips for the PS3 that should start seeing their way into PS3's soon. Sony would be mad not to pass those savings onto the customer.
And not only the prices are a giagantic gap, also the games. I mean, X360 a lot more of good games to choose from, Sony only had a handfull. And no, I'm not talking about future games. I'm talking about games that are already on the market.
And not only the prices are a giagantic gap, also the games. I mean, X360 a lot more of good games to choose from, Sony only had a handfull. And no, I'm not talking about future games. I'm talking about games that are already on the market.
I disagree, it's different tastes. But at the same time I agree purely because others think the same as you, regardless of my opinion.
"Now, Sony expects to hit $2 billion in profits. The dip is the result of a weak global economy and a strong yen that hurts its export business. Analysts, though, say Sony will be lucky to hit $500 million in profits."
A profit is a profit in my eyes. 2 billion pounds? Yes please.
Not an ideal situation, but bringing the prices down is not good business sense. I'd rather sell 10 things and make Ł100, than sell 100 things and make no profit.
I think a price cut would drastically increase the appeal of the PS3 tbh.
Some people are very pleased with their PS3's but personally I think Sony need to swallow their pride and accept that the 360 has a vastly more established user base and the only way to change this is to get more PS3's into peoples' living rooms.
The PS3 does actually have some brilliant exclusives and there's nothing on any other console to rival for example Wipeout. However, the truth of the matter is that the Gears and Halo series are by far more popular and a lot of people are going to go for the cheaper console with the better known games - considering a lot of gamers are less hardcore than a lot of people on here.
If the price was more comparable then people might avoid jumping on the bandwagon and might actually take a risk with a console that has more future potential. As stands the PS3 is quite expensive and despite having a very promising lineup actually has a little less on the table than MS at this current point in time, hence making it a bit of a risk.
As many people on here will testify I do have a bit of a grudge gainst Sony but for my Ł425 I honestly don't think I got the same experience I do on my unreliable brick of a 360 which I have returned to. However, I play fps 90% of the time and mainly play online so of course my wants may be different from others.
I think a price cut would drastically increase the appeal of the PS3 tbh.
I agree with you. I think the PS3 selling for Ł199 would clean the floor with the 360. If you add up the components in the PS3 and estimate their production price there is no reason why it couldn't retail for Ł199.
Blu Ray is killing them and I for one am glad. Maybe they will stop trying to force people into crap they don't want. It's a game machine Sony, make some games.
Blu Ray is killing them and I for one am glad. Maybe they will stop trying to force people into crap they don't want. It's a game machine Sony, make some games.
what evidence do you have that shows blu ray is killing them?
Christmas is going to be expensive this year (upgardaing the TV for me, presents for everyone else ) and I know that I wont be buying a PS3 this side of 2008 as long as the price stays the same.
I dont think anyone wants to buy something just for there to be a Ł50-Ł100 drop in price 1 month later. There is no doubt that in the future I will get a PS3 but there has to be a price drop soon and I wont be buying one until there is.
With Sony still not making a profit on the PS3, cutting the price will only increase their losses.
I said Sony RIP 2008 on the console release, it looks like they may just scrape into 2009 before they go bust after all.
Serves them right at the end of the day for sitting on their corporate ass all smug. Let's just hope another console makes it onto the shelves to keep competition healthy.
Why anyone caughed up 600 USD for that thing when it released is a wonder. That's how stupid fanboys are, thinking Sony would emulate the success of the PS2 when all they did was abuse their situation.
A smart "fanboy" goes where the games are and so far 360 is winning by a landslide.
I hope the PS tanks in the future so we can get someone smarted to make consoles, maybe Apple.
so an xbox costs 130 qiud but it dont come with hdd or wireless ect if u add these extras the console is way more expensive than a ps3.last thing GOW2 bust 6 xbox's at a games show hinting that the machine is struggling with these massive codes.
A profit is a profit in my eyes. 2 billion pounds? Yes please.
Not to be nit-picky (so I apologise now) but actually that's a gross forecast and means next to nothing. Their actually forecasting a net turnover of 150 billion yen (roughly 908 million pounds). The problem is that currently Sony are producing their forecast using FX rates which don't reflect the current market (if you read their press release they state that gross turnover if revised would drop by another 80-90 billion yen) & most analysts believe they will re-forecast again before the end of the financial year. That suggests that the current Sony forecast is quite optimistic and that's why this is big news & why their stock is tumbling (with most other Japanese companies as-well of course).
It would be good if they dropped the price of the PS3 but they won't mostly because they are forecasting the bulk of their drop in profits to come from reduced LCD, digital camera sales etc. If anything their relying on the gaming division to bulk up their profits & that means they want a profit margin on each PS3 sold. Personally I think they'd be better served by going for higher volume lower profit but Mr. Stringer obviously disagrees... and he really is the problem. He came in with promises to get Sony back to huge profitability & he doesn't want to tarnish his own rep.
With Sony still not making a profit on the PS3, cutting the price will only increase their losses.
I said Sony RIP 2008 on the console release, it looks like they may just scrape into 2009 before they go bust after all.
Serves them right at the end of the day for sitting on their corporate ass all smug. Let's just hope another console makes it onto the shelves to keep competition healthy.
I doubt they'll go bust with a 'meagre' 200 billion yen profit (Ł1.3 billion)... I'm sure they are quaking...
Quote
There is nothing on any other console to rival Wipeout...
bwahhhahahahahahah...
Not laughed so much in ages...
PURE TRASH....
Well, what is there on the 360 that does? And I mean in game type, not quality. I'm not disagreeing, but I'm struggling to think of a game that's a blisteringly quick, futuristic racer on the 360.
True.Tis an amazing game and there isn't anything to rival it on the 360. However Wipeout Hd is a bit of small victory.
I still con't justify buying a PS3 yet the exclusives that i wouldn't be able to pick up on my 360 anyway aren't much cop. except the aformentioned wipeout, LBP and at least for the time being MGS4
A profit is a profit in my eyes. 2 billion pounds? Yes please.
Not an ideal situation, but bringing the prices down is not good business sense. I'd rather sell 10 things and make Ł100, than sell 100 things and make no profit.
thats where you are wrong, a profit is not just a profit. they set targets for the year which they have more than halved so investors wont be too happy. what happens if it halves next year and the year after? if there share price keeps dropping they are open to take over or going bust so a profit drop is very important. if the games division keeps losing money they may decide to close it to prevent further damage.
sure 2 billion quid is a lot of money but tesco make more than that and probably have less presence around the world.
thats where you are wrong, a profit is not just a profit. they set targets for the year which they have more than halved so investors wont be too happy. what happens if it halves next year and the year after? if there share price keeps dropping they are open to take over or going bust so a profit drop is very important. if the games division keeps losing money they may decide to close it to prevent further damage.
sure 2 billion quid is a lot of money but tesco make more than that and probably have less presence around the world.
For a start do you know how many companies have reduced their forcasts for this year? In fact do you know how many companies have issued profit warnings as a result of the current climate? I'll give you a clue, it's a lot. You're confusing not making as big a profit as predicted with making a loss. Keep in mind Microsofts 40 billion dollar share buy back plan to prop up their crashing share price and you will see the difficulty many companies are facing. That 40 billion effectively eats up all Microsofts cash reserves and leaves them with a 5 billion dollar debt.
Sony are also buying back their shares to protect them from a volatile market.
Sony simply cannot afford to cut the price of the PS3. If they do and it flies off the shelves then they'll take a massive hit which that can't afford. This means short term gain for them but a proble loss long term as they really make their money on software. Less people with a PS3 = less software purchases, and therefore less in the coffers. I for one would love LBP put won't pay the current price of a PS3 just for that game, no matter how great it is. Microsoft have deeper pockets and less build costs which puts them in the driving seat I reckon. F"ck it, I blame the banks for any doom and gloom these days
thats where you are wrong, a profit is not just a profit. they set targets for the year which they have more than halved so investors wont be too happy. what happens if it halves next year and the year after? if there share price keeps dropping they are open to take over or going bust so a profit drop is very important. if the games division keeps losing money they may decide to close it to prevent further damage.
sure 2 billion quid is a lot of money but tesco make more than that and probably have less presence around the world.
For a start do you know how many companies have reduced their forcasts for this year? In fact do you know how many companies have issued profit warnings as a result of the current climate? I'll give you a clue, it's a lot. You're confusing not making as big a profit as predicted with making a loss. Keep in mind Microsofts 40 billion dollar share buy back plan to prop up their crashing share price and you will see the difficulty many companies are facing. That 40 billion effectively eats up all Microsofts cash reserves and leaves them with a 5 billion dollar debt.
what do microsoft have to do with this i never mentioned them? i mentioned tesco. the fact is that this isnt good no matter who you are and who is posting the same warnings. so saying that 2 billion is still good isnt really when you cut your profit forecast in half as this is only the beginning.
i am not having a dig at sony although you seem to think i have slap your mother in face, i just pointed out that it isnt a good thing that this has happened.
Funny how fanboys suddenly become financial wizkids when there is another juicy Sony story to chomp on....
This weeks topics:
1. Sales 2. Religion 3. Politics
Did I get off on the wrong bus? I could have sworn that CVG was a games site....
they just give us what gets the most replies, probably generates more revenue from ads. if we stopped falling for this kind of thing maybe they would stop!
With Sony still not making a profit on the PS3, cutting the price will only increase their losses.
A price cut will increase their losses yes, but it will also ensure sales and stop the PS3 from bombing. Sony are never going to go bankrupt, and a lot of people are just waiting for a reason to buy the PS3. The only way it can really sell is with a price cut, the 360 has just went too cheap. It's really either cut the price and get some sales going, or be a bunch of stubborn bastards and end up failing. Sony have been arrogant this generation and they need to stop.
Disastrous news this for the sony fanboys(we know who they are). I've said(along with a lot of others)that sony are in trouble. I've read on the odd website some views that people think the ps3 could end up going the way of the dreamcast.
The machine obviously costs a lot to make, whether it's the bluray drive or the cell cpu that bumps up the costs, it's obvious they need a price drop to compete against nintendo and microsoft. I'm not sure Sony can afford to drop the price by much, they're in a bit of a state in my opinion. Sony can't compete on the money front with Microsoft. The 360 arcade will drop to Ł99 everywhere early next year, that'll guarentee another good year for the machine. We're probably only a couple of years away from the next power packed xbox. It just doesn't look good for Sony.
Disastrous news this for the sony fanboys(we know who they are). I've said(along with a lot of others)that sony are in trouble. I've read on the odd website some views that people think the ps3 could end up going the way of the dreamcast.
The machine obviously costs a lot to make, whether it's the bluray drive or the cell cpu that bumps up the costs, it's obvious they need a price drop to compete against nintendo and microsoft. I'm not sure Sony can afford to drop the price by much, they're in a bit of a state in my opinion. Sony can't compete on the money front with Microsoft. The 360 arcade will drop to Ł99 everywhere early next year, that'll guarentee another good year for the machine. We're probably only a couple of years away from the next power packed xbox. It just doesn't look good for Sony.
its not that bad as the psp may turn out to do very well. i suspect rather than cutting prices they will can some games to save money.
Disastrous news this for the sony fanboys(we know who they are). I've said(along with a lot of others)that sony are in trouble. I've read on the odd website some views that people think the ps3 could end up going the way of the dreamcast.
The machine obviously costs a lot to make, whether it's the bluray drive or the cell cpu that bumps up the costs, it's obvious they need a price drop to compete against nintendo and microsoft. I'm not sure Sony can afford to drop the price by much, they're in a bit of a state in my opinion. Sony can't compete on the money front with Microsoft. The 360 arcade will drop to Ł99 everywhere early next year, that'll guarentee another good year for the machine. We're probably only a couple of years away from the next power packed xbox. It just doesn't look good for Sony.
Reading this makes me think, if it was possible, and Sony released it, would a PS3 without a Blu-Ray drive (and therefore significantly cheaper) fly off the shelves? I have ZERO clue whether all PS3 games are Blu-Ray or not, or whether a Blu-Ray player is capable of reading DVDs, and whether some games are on DVDs, I'm merely thinking out loud.
I think a price cut would drastically increase the appeal of the PS3 tbh.
I agree with you. I think the PS3 selling for Ł199 would clean the floor with the 360. If you add up the components in the PS3 and estimate their production price there is no reason why it couldn't retail for Ł199.
Sony cant afford to sell the PS3 at 199 quid, it still costs way too much to make, not as much as 200 more, more akin to a 100 more, their still losing an armfull with every machine sold, work in the fact that blue-ray disc sales for films arn't very good either and player sales are still somewhat slow given that its the only hd player in the market and your in the posistion off a global recession, which will hit sony's business really hard.
Harder than most, due to the fact they make films, music, games, tv's, the sort of things people cut first to put food on the tabel from their monthly spend. Sony have got to keep the price of the ps3 high untill it savings it can make from making them cheaper kick in (a good 6 months away yet) expect a price cut round about easter. Untill then it will lose sales in every market going.
What sony could do right now is to stop making PS2's completly, force people to upgrade, as long as ps2 are still in chanel, then ps3 will be slow.
simply econimics say that sony are in no posistion, due to the fact they have wi-fi, hdmi ports, blue-ray and chips that cost a fortune to make and license, since they dont own them 100%.
and i agree sony will be lucky to make a 500 million profit this year, never mind a 2 billion, the tv market is falling sharp and that in recent times has kept sony in the black.
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) and I know that I wont be buying a PS3 this side of 2008 as long as the price stays the same.
