Sony profits drop 98%

[Colonâ„¢]

Originally posted by Asher

Of course, but I think it's a bit silly to argue if the Xbox makes business sense. The video game sector is the only major one that grew over the past 3 years, and it's growing fast. It's a huge potential income source, and at the same time it can defend against a push by Sony.

Computers and the living room are slowly converging, you know, MS wants to get in the attack from both sides.

It's not about making "business sense"just yet, it's strategic sense.

So what do you mean if you say it's about strategic sense and not business sense? It's supposed to make a profit right?

Like what? The PlayStation 3? The one that's been delayed due to complications in the CPU development that's running late and overbudget? The one that's massively parallel, one thing game developers absolutely despise with the PS2?

Like interconnecting and integrating every single product in Sony product range and taking it into the broadband era. Does it makes sense? Don't know, but it surely doesn't lack in ambition and they can take the credit for having created this vision long before the Silicon Valley whizzkids thought of it, and standing by it.

And Motorola is going to start selling MS cell phones soon.

And MS just signed a deal with TimeWarner cable and Comcast for set-top boxes.

And digital movie theatres are starting to use Windows Media to show videos, and high-definition DVDs have been released in Windows Media...

Yes, I already told Dan MS is going to suffer from Imperial overstretch. Take away Windows and MS Office and how much earnings does MS still have?

[Asher]

Originally posted by Colon
So what do you mean if you say it's about strategic sense and not business sense? It's supposed to make a profit right?

Xbox? No. Xbox2? Yes...

Yes, I already told Dan MS is going to suffer from Imperial overstretch.

But Sony even does life insurance, how could you stand by Sony in an argument then blast MS for entering a market that's remarkably similar to what they're used to?

Take away Windows and MS Office and how much earnings does MS still have?

Take away PlayStation and how much earnings does Sony have?

[Ted Striker]

Sony is like Sun Microsystems, they are a big ship that have sort of just gone of course and don't know where the hell to go.

Can they find their way back home?

[Dinner]

Originally posted by Colon
Still waiting for X-Box's earnings data...

The funny thing about MS is it can flush all the money it wants into unprofitable enterprises like the X-Box and keep doing it until they have a #1 position and the segment is profitable. Why can they do theis? Because they have the single most profitable monoply on Earth; they literally mint $6B-$12b a year in profit and they have almost $50B worth of money just stored away for a rainy day.

MS's pattern is to start small and just keep investing until they lead a segiment and other people find it very, very hard to compete in a price war agaisnt a company which has, for all intents and purposes, all the money it can ever use.

[mrmitchell]

Uh...PDA != Fad

It's like a computer to go...except that it will eventually be rendered obsolete by wearables, wireless tablets, or the such

not a fad but just a short-lived innovation

[mrmitchell]

Oerdin--good point. Microsoft could give away XBoxes for free and it still wouldn't give a ****. (Eventually they might get the antitrust attention again though )

[Gatekeeper]

So when's Microsoft gonna start selling vehicles and running for-profit hospitals?

[Dinner]

The interesting thing is Chrysler got bought for around $20B (most of it was financied because Daimlier Benz didn't have the cash while MS has $50B just sitting around so if Bill wanted to get into the auto business they could easily afford to buy two of the world's largest automakers and pay cash for them.

If they wanted to get creative and start financing then they could become a monster in just about any field they wanted to.

[Gatekeeper]

That's what concerns me, Oerdin. If MS wants to, they could pretty much become the world's first planetary monopoly in a number of areas. It wouldn't happen overnight; it'd be a process much like when IE supplanted NS as the dominant Web browser — slow, but insidiously sure simply due to leverage.

Gatekeeper

[Kramerman]

IM a proud owner of an X=Box

[mrmitchell]

The best thing for MS to do would be to start its monopoly in the law business. No more antitrust!

[:) Smiley]

Coming next: Microsoft Bananas

[DanS]

Sony is like Sun Microsystems, they are a big ship that have sort of just gone of course and don't know where the hell to go.

That is my opinion as well. Companies are in business to make profits. Corporate Japan in general has lost focus on this fact of life. There are very few exceptions (Toyota is one that is impressive).

Some tech companies state-side like Sun Microsystems lost this focus long ago as well. But there are a lot of companies state-side that have never lost this focus. M$, GE, IBM, etc.

[CerberusIV]

PS2 sales aren't bad, just not what they were 12 months ago.

http://news.bbc.co.uk/1/hi/technology/3092795.stm

"More than 50 million PS2s have been shipped since the console was launched in Japan in March 2000.

By comparison, Nintendo's GameCube and Microsoft's Xbox, are languishing around the 10 million mark.

Sony's rivals may take some satisfaction from the figures showing a slowdown in sales of the PS2.

Shipments of the console dropped by 42% to 2.65 million units for the April to June period, compared to the same time in 2002.

The large drop is partly due to bumper sales of the console this time last year. A wave of drastic price cuts led to a surge in demand as people snapped up the machines.

This year, prices have remained more or less static, so it is hardly surprising that sales are down compared to 2002.

"The PlayStation had a very good period last year," explained Mr Drozd. "Prices have got to the point where it is difficult to lower them further."

He said the next boom in console sales will come when the next generation of machines are released in two or three years' time.

Instead, console makers will be concentrating on services like online gaming to boost their bottom line."



Anyone remember Sega? The crunch will come when a console fails to sell and whether Sony can carry a failure and come back with a success afterwards.

[Asher]

Instead, console makers will be concentrating on services like online gaming to boost their bottom line.

IOW, expect Sony and Nintendo to clone Xbox Live, despite their constant bashing of it this generation.

The 42% drop is more than the other consoles, though. The PS2 is reaching market saturation point.

Holiday 2003 will be especially interesting...it's a shame Halo 2 is now Q1 2004, otherwise I'd say the Xbox would've had a chance to outsell the PS2 consistently for the season.