How will Sony's poor financial condition affect PS4?

biggles

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I have read in the news that Sony is in dire financial shape.

How is this likely to impact the PS4? Will this restrict their ability to compete with MS and Nintendo, who presumably are much stronger financially? Will it prevent them from cutting prices on the console? Or perhaps the playstation network will not get the tech support it needs, and this could result in subpar online gaming?

Are Sony's losses related to the Playstation division, or is Playstation doing fine (i.e., the other divisions are hurting the company)?

Am I correct in assuming this should not be a major factor in deciding which console to pick up for next gen?
 

KaOTiK

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It isn't going to impact the PS4 at all. The Playstation brand is one of if not the largest money maker for Sony. They are not going to compromise it.
 

stevedave

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Actually I'd say it would do the opposite.

They will be hyper focused on success and delivering a product that is compelling people to become a part of it....as the company needs it to succeeded.

Extra income and revenue can make companies and people lazy and complacent...Likely part of why they messed up with PS3 so bad is because they where riding on the success of the PS3 and quite over confident........How has extra money helped EA or activision?
 

ballistic90

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And I'd like to point out that producing the PS3 was so costly that they too years to make any kind of profit on it. I can't even be sure if they've made any kind of profit on the Vita, either.

Sony's problem isn't just not having money, it's that they're credit worthiness rating is VERY low. It's actually at one of the lowest ratings for a company's credit worthiness. They'd have to rely on their good relationships with banks to get them to overlook that rating.
 

KaOTiK

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True the PS3 did cost them a lot, but that also was due to pushing blu ray to win the format war. We obviously don't know what the numbers but it was probably worth it for them to have blu ray as the winner and made the money back on the PS3 loss.
 

doug_7506

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Those are the shipped numbers for the PS3. They're skewed. As for SALES, the XBox 360 has still sold more.

Profit margins is what really matters. MS has them and Sony doesn't

One would think the overwhelming positive reception of PS4 will help

Has anyone seen the numbers on production cost yet?

Think it took both company's 2.5 years last time to break even on the consoles
 

veilv0x

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Hopefully Sony can reclaim the title of console king. I think it's apparent now more than ever that they have seen the error of their ways with PS3. PS4 looks to be a gamers/developers dream. They really have attempted to address all of the complaints with the last generation from the perspective of the devs and the gamers.

I know I'm getting one for my kids (I have a monster PC), microsoft can suck it.
 

ballistic90

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If anything, PS4 is going to help Sony even more.

Or so you would think. Sony's slide into financial disaster preceeded the PS3 by a few years. They'd better hope that their new CEO doesn't throw money into a pit.
 

JohnleMVP

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It depends on what you expect from the next gen. A lot of info is already out about PS4 and the major titles that may come out in the first year. Sony's financials already played into that, as companies often pay for exclusives one way or another.

As for PSN, it wasn't exactly the fastest place to download games before. PS4's PS+ subscription requirement should help them make up some money for extra server cost.
 
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Probably nowhere near the same amount that Microsoft effected itself with all the hilarity and then backpeddling so far this year lol
 
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Nope

And yes, lol at microsoft making a for building all these requirements and justifying them to just have an "oh shit!" moment and being all "you matter, so just forget everything we've said the past month *jedi wave* "
 

veilv0x

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microsoft is pitiful... xbone is a joke. The policy flipflop SHOULD show the average consumer just what kind of company they are supporting when they buy their products. Hopefully this "moment of clarity" does not fool people into buy one.

Sony's console has faster, game oriented memory, and more of it allocated to the games (xbone only allocates a little more than half). The GFX chip is supposedly better, and the CPU is clocked higher. And best of all the console is CHEAPER!

PS4 seems to be superior in every way. Why anyone would chose not to support Sony this time around is beyond me. It's like they are attempting to really appease the gamers and the devs with no strings attached. It's been a long time, if ever, since a company has been this open and this intent on offering their customers what they really want.

I give props to Sony on this one so far, they have won me over.
 

Bman123

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Sony will be in good shape, with the PS4 they are charging everyone to play multiplayer like xbox live. That's a lot of extra income that they didn't get with the PS3 since everyone now has to play online.

I don't know how much they are losing on the console with it priced at $399, they are going to move a shit load of systems since it's $100 cheaper then the XBone. They will make a killing on accessories and the exclusives tho so Sony will be in good shape
 

ballistic90

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Nope

And yes, lol at microsoft making a for building all these requirements and justifying them to just have an "oh shit!" moment and being all "you matter, so just forget everything we've said the past month *jedi wave* "

Didn't Sony do the same thing when they were hit with that SQL injection attack? Or during that whole Rootkit fiasco? Or what about UMDs?

Does EVERYONE forget about the shit that Sony has done through the years while attacking Microsoft for what they were CONSIDERING?
 

bigdogchris

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Sony's poor financial condition does affect PS4, significantly. The way PS4 was affected is that Sony designed the PS4 to be profitable since they can't afford to take a loss. Being profitable means using existing silicon rather than designing their own chips. It also means making the platform popular with fans, easy to program for, better performing and more developer friendly. These factors lead to increased sales.
 

zamardii

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Being profitable means using existing silicon rather than designing their own chips..

I am pretty sure that the CPU and GPU in the PS4 is all custom. It may be based on something, but the progression to X86-based architecture was a matter of when not if. But still, you won't be able to find this GPU and CPU configuration anywhere else. Especially not for the price we are getting this powerful piece of kit for.

But I agree with DeathPrincess... LOTS of amateur financial analysts. I wouldn't worry about Sony having any financial problems for a while. There are few companies that are as big as Sony and have their finger dipping into as many markets as they do... just off the top of my head: MP3 players, car audio decks, TVs, Movies (feature films and video equipment), computers (desktop, laptop, and tablets), games (software and hardware), cameras, mobile phones, DVD & Blu-Ray players... idk what else but I am sure there are plenty more.

I'm confident in Sony and I wouldn't make a next-gen console decision based on all the stuff in this thread.
 
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bigdogchris

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I am pretty sure that the CPU and GPU in the PS4 is all custom. It may be based on something
Some of the on-die stuff that Sony is including, like hardware video recording is not something AMD normally sells, so yes it's custom in that regard. Otherwise the CPU is a Jaguar core chip, which is a normal production chip that AMD is putting on the market this fall. The GPU is custom in regards to being on-die (APU's don't have this much GPU on board normally) but it's still a 7800 series GPU.

That's a huge step away from what Sony did with the Cell.
 

Comixbooks

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I think at 19.00 20.00 per share of Sony stock is a good price it was just 23.00 a few weeks ago.
 

MrCrispy

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The motivation for Sony going with AMD and a single chip APU isn't due to their financial situation. Well, not entirely. It's due to AMD actively courting both MS and Sony, a desire to have a simpler architecture which is better for production, cost, and reliability, and an easier architecture for developers.
 

Kinsaras

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Those are the shipped numbers for the PS3. They're skewed. As for SALES, the XBox 360 has still sold more.

In the states, yes. World wide, no.

360 have been discontinued for years in Japan. It's easier to find a Dreamcast than a 360. MS isn't even sure how the XB1 is going to work over there.
 

next-Jin

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Even with the shipped vs sold comparison with the huge RRoD fiasco one has to assume to go by those numbers for the sake of comparison.

The financial outlook helps the PS4 division because like was stated earlier they are hyper focused right now making all the right choices. I can't find anything wrong with what they have atm with their road map. Charging for online is a bitch but I'd rather pay and have a faster service with more features (similar to netzero vs fios).
 

ballistic90

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In the states, yes. World wide, no.

360 have been discontinued for years in Japan. It's easier to find a Dreamcast than a 360. MS isn't even sure how the XB1 is going to work over there.

The PS3 has been listed as having dissapointing sales throughout it's lifespan in Japan too. I think it had 8 million sales. For comparison, the 3DS blew past the PS3's lifetime sales in Japan in less than 2 years. You know, the portable console that everyone keeps calling a failure?
 

ballistic90

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Even with the shipped vs sold comparison with the huge RRoD fiasco one has to assume to go by those numbers for the sake of comparison.

The financial outlook helps the PS4 division because like was stated earlier they are hyper focused right now making all the right choices. I can't find anything wrong with what they have atm with their road map. Charging for online is a bitch but I'd rather pay and have a faster service with more features (similar to netzero vs fios).

It's not always about making bad decisions, it's about killing themselves to make the right decisions. The PS4 can be a success and still be the end of Sony if they sell it for too much of a loss and can't make the money up another way. If Sony is leaning on Bluray sales to make up the difference, for example, they might end up hitting a roadblock if the average consumer doesn't want to switch to Bluray.

Sony sold the PS3 for way too much when they brought it out, and now they might be trying to hard to fix that issue for the PS4. Microsoft can easily survive on their other businesses if their Xbox One fails. Nintendo has their portable gaming system that can carry them past dissapointing sales on their primary. Sony's other businesses haven't been doing very well for a while. If Sony can keep selling buildings or get loans to keep them above water while they work to get everything sorted out, then they won't have a problem. However, that's not a guarentee.
 

next-Jin

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It's not always about making bad decisions, it's about killing themselves to make the right decisions. The PS4 can be a success and still be the end of Sony if they sell it for too much of a loss and can't make the money up another way. If Sony is leaning on Bluray sales to make up the difference, for example, they might end up hitting a roadblock if the average consumer doesn't want to switch to Bluray.

Sony sold the PS3 for way too much when they brought it out, and now they might be trying to hard to fix that issue for the PS4. Microsoft can easily survive on their other businesses if their Xbox One fails. Nintendo has their portable gaming system that can carry them past dissapointing sales on their primary. Sony's other businesses haven't been doing very well for a while. If Sony can keep selling buildings or get loans to keep them above water while they work to get everything sorted out, then they won't have a problem. However, that's not a guarentee.

If their MSRP was 249.99 or 299.99 I could see your point but after PS3 and seeing the success of Wii and Nintendo profit off each I would imagine it's priced a bit under or right at production costs.

They are also charging for PSN now so I just don't see it doing anything other than helping Sony. Even of the whole company failed the entertainment division could be split off.
 

Kinsaras

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The PS3 has been listed as having dissapointing sales throughout it's lifespan in Japan too. I think it had 8 million sales. For comparison, the 3DS blew past the PS3's lifetime sales in Japan in less than 2 years. You know, the portable console that everyone keeps calling a failure?

Who called the 3DS a failure? Japan loves their portable gaming.
 

ballistic90

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If their MSRP was 249.99 or 299.99 I could see your point but after PS3 and seeing the success of Wii and Nintendo profit off each I would imagine it's priced a bit under or right at production costs.

They are also charging for PSN now so I just don't see it doing anything other than helping Sony. Even of the whole company failed the entertainment division could be split off.

I didn't say that charging for PSN wasn't going to help them, just that at this point, Sony is in the worst financial straights of the three, and they would have the most to lose. Not to mention that the die hard Sony fans INSIST that the PS4's power is so much beyond a $500 computer that, for that to be true, they would be selling it for a major loss at $399.99.

And remember, even as Sony's biggest "money maker", their Playstation division has gone years without making a profit before. It took them over 2 and a half years to make money on a console selling at $699.99. It might take them longer to make a profit on the PS4.
 

next-Jin

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I didn't say that charging for PSN wasn't going to help them, just that at this point, Sony is in the worst financial straights of the three, and they would have the most to lose. Not to mention that the die hard Sony fans INSIST that the PS4's power is so much beyond a $500 computer that, for that to be true, they would be selling it for a major loss at $399.99.

And remember, even as Sony's biggest "money maker", their Playstation division has gone years without making a profit before. It took them over 2 and a half years to make money on a console selling at $699.99. It might take them longer to make a profit on the PS4.

Who on these forums are saying it is more powerful than a 500 dollar PC? If the argument was that the games will look like games running on PC's that cost twice as much there is truth to the statement but as far as straight power then I don't know of any poster who is that absurd.

You're assuming they are making the same mistake this time with past events. They didn't turn a profit for years for a variety of reasons;

  • Wanted to establish the bluray format
  • Relied on propietary hardware that cost alot of money
  • Initial units had PS2 hardware built in

They definitely established and won the format war, however their other factors didn't pay off at all. Seeing this it is fairly easy to see they have learned from their mistakes. No backwards compatibility and no proprietary hardware with excellent market entry prices. Combined with direct access to the metal, no excess indie gouging, pay to play online, and not worrying about gimmics leads me to believe they have a very solid gameplan and roadmap.

It's just hard to find faults with them at the moment, anything can change mind you but as it stands they look to be good to go.
 

ballistic90

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Who on these forums are saying it is more powerful than a 500 dollar PC? If the argument was that the games will look like games running on PC's that cost twice as much there is truth to the statement but as far as straight power then I don't know of any poster who is that absurd.

You're assuming they are making the same mistake this time with past events. They didn't turn a profit for years for a variety of reasons;

  • Wanted to establish the bluray format
  • Relied on propietary hardware that cost alot of money
  • Initial units had PS2 hardware built in

They definitely established and won the format war, however their other factors didn't pay off at all. Seeing this it is fairly easy to see they have learned from their mistakes. No backwards compatibility and no proprietary hardware with excellent market entry prices. Combined with direct access to the metal, no excess indie gouging, pay to play online, and not worrying about gimmics leads me to believe they have a very solid gameplan and roadmap.

It's just hard to find faults with them at the moment, anything can change mind you but as it stands they look to be good to go.

Again, it's not "faults", more like "not being in a strong situation to start with".

And I know some people who would have faults with Sony. I call them "Vita owners".
 

next-Jin

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Again, it's not "faults", more like "not being in a strong situation to start with".

And I know some people who would have faults with Sony. I call them "Vita owners".

lol I hear ya with the Vita but that's not what is being discussed. As per the OP, again I think it puts them in an excellent situation. They have finacials to not be in dire straights (Atari releasing the Jaguar) and a hyper focused mindset that if they do fail horribly it would bring the entire thing crumbling down.
 

demingo

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Also it's kind of amusing to think about the fact that Microsoft has to pay Sony for each Xbox One they sell and each Xbox One game that is purchased.
 

Derangel

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Also it's kind of amusing to think about the fact that Microsoft has to pay Sony for each Xbox One they sell and each Xbox One game that is purchased.

They don't. If I recall Sony only gets royalties on discs. Sony does not own blu-ray.
 

ballistic90

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lol I hear ya with the Vita but that's not what is being discussed. As per the OP, again I think it puts them in an excellent situation. They have finacials to not be in dire straights (Atari releasing the Jaguar) and a hyper focused mindset that if they do fail horribly it would bring the entire thing crumbling down.

Selling a building to be in the black just doesn't fill someone with confidence.

And just because they're "hyper focused" doesn't mean they won't make mistakes. And in some cases, it's not even their mistakes that can destroy them. If they were to lose Naughty Dog, or their best talent were to leave, that could send them up shit creek without a paddle.

You know Microsoft is acting like an asshole if they were to buyout Naughty Dog, or at least their top designers.
 

next-Jin

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Selling a building to be in the black just doesn't fill someone with confidence.

And just because they're "hyper focused" doesn't mean they won't make mistakes. And in some cases, it's not even their mistakes that can destroy them. If they were to lose Naughty Dog, or their best talent were to leave, that could send them up shit creek without a paddle.

You know Microsoft is acting like an asshole if they were to buyout Naughty Dog, or at least their top designers.

They are owned by SCEA so that won't happen. Sony is restructuring which all businesses do, they are in far better shape than say an Atari. What matters is they have the resources to fully commit to the PS4. Their R&D was no where near what the PS3 was and the console will likely start turning profits shortly after release thanks to off the shelf chips.
 
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