Eurogamer PS4 is doing great but a different story for Sony

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#1 Edited by sts106mat (19857 posts) -

Sony is delighted with the performance of the PlayStation 4, which has shifted some 7m units worldwide since its launch last year, but it's a different story for the wider company.

Today Sony issued a warning that its 2014 financial year loss would be almost 20 per cent worse than it predicted in February.

Sony's new preliminary fiscal year net loss was an eye-watering 130 billion yen (approximately £753m) - 18 per cent above the forecast it made just a few months ago. At one point it had expected to make a profit for the financial year.

Why? 30 billion yen (£173m) of additional costs associated with the sale of its PC business. Since it announced it was ditching Vaio, sales have been lower than expected, and so Sony expects to record write-downs for excess components in inventory and expenses to compensate suppliers for unused components ordered for Sony's spring PC lineup. The good news? Sony expects to offset these charges in the fiscal year ending 31st March 2015 because it's getting restructuring costs out of the way early.

Another issue boosting the expected loss is a 25 billion yen (£144m) impairment charge related to Sony's overseas disc manufacturing business. Apparently demand for physical media is "contracting faster than anticipated", especially in Europe, and so the future profitability of the business has been revised. Essentially, Sony reckons it won't make enough money from disc manufacturing to cover its business costs in this area.

The profit warning comes despite a rise in sales, which are expected to be up 14 per cent year on year.

Sony boss Kaz Hirai, former chief of PlayStation, has spent two years trying to trim down the company's operations in an attempt to return to profit, with poor sales of TVs stifling his efforts.

Amid the doom and gloom, PlayStation is doing well. During the quarter ending 31st December 2013 the Game business made a profit of $172m off the back of an impressive 64.6 per cent rise in sales year on year.

http://www.eurogamer.net/articles/2014-05-01-ps4-is-doing-great-but-its-a-different-story-for-sony

Still losing money?

£753m

= $ 1273097100

holy shit

#2 Posted by _Matt_ (8924 posts) -

Sony is doomed!

etc.

#3 Edited by Evo_nine (1741 posts) -

Not much longer now, maybe ms should buy this toxic pos called sony with their petty cash

#4 Posted by SecretPolice (22243 posts) -

All hope is lost since when MS makes their move to undercut pricing making The One lower priced, Sony won't be able to take the losses to stay with MS. Eh, doomed?? Yepperzz. :P

#5 Posted by Blabadon (26663 posts) -

Outside the PS4, they've really fallen behind in nearly every market there is.

#6 Posted by sts106mat (19857 posts) -

@Blabadon said:

Outside the PS4, they've really fallen behind in nearly every market there is.

they seem to be trimming back everything, optical drives out, VAio out, and they are struggling with TV's and I'd guess phones too. besides playstation, what products can they work on to increase profitability?

#7 Edited by FoxbatAlpha (7424 posts) -

The writing is on the wall. Maybe when they go belly up I will get a PS4 for nostalgia.

I don't think there will be a Sony at the end of 2015.

I am curious to see how much they are putting into E3. This could speak volumes of what they can do in the near future.

#8 Posted by _Matt_ (8924 posts) -

@sts106mat said:

@Blabadon said:

Outside the PS4, they've really fallen behind in nearly every market there is.

they seem to be trimming back everything, optical drives out, VAio out, and they are struggling with TV's and I'd guess phones too. besides playstation, what products can they work on to increase profitability?

I think their phones are doing reasonably at the moment considering. Obviously not the best, but I think well enough to not panic about them too much (especially with some recent exceptional value mid range phones)

#9 Edited by FoxbatAlpha (7424 posts) -

On a good note Spider-Man 2 opens this weekend. That will save them! *rolls eyes*

#10 Posted by sts106mat (19857 posts) -

@_Matt_ said:

@sts106mat said:

@Blabadon said:

Outside the PS4, they've really fallen behind in nearly every market there is.

they seem to be trimming back everything, optical drives out, VAio out, and they are struggling with TV's and I'd guess phones too. besides playstation, what products can they work on to increase profitability?

I think their phones are doing reasonably at the moment considering. Obviously not the best, but I think well enough to not panic about them too much (especially with some recent exceptional value mid range phones)

well I don't know, they look good products as you'd expect, but i dont see them around anywhere. here in UK the iphone is king, windows phone seems to be increasing in popularity now. although it's nowhere close to iphone or ever will be. everyone i know with an iphone complains about it though lol.

#11 Edited by lamprey263 (24232 posts) -

they should have just killed TVs as well, pull the band-aid off quickly

their films also took a big cut this year in restructuring, it'll be interesting to see how that works out next year

anyhow, can't wait to have a gander at their fiscal year report

EDIT: saw this interesting bit in the Chicago Tribune

The repeated misses - the latest just two weeks before Sony announces full-year results - are fuelling anger among investors even as Hirai rebuffs billionaire hedge fund manager Daniel Loeb's proposal to spin off Sony's profitable entertainment business.

"To be honest, I really wonder if he's got a grip on what's going on with all his businesses," said Yasuo Sakuma, a portfolio manager at Bayview Asset Management in Tokyo, who does not own Sony shares. "Cutting forecasts at this time; are they trying to hide something or have they lost it?"

Last fiscal year they had to sell $5.4 billion in assets to turn a $400 "profit" (instead of losing $5 billion for the year), so if they're only losing $1.3 billion for the year without any really big asset chucking then they're moving in the right direction.

#12 Edited by shawn30 (4367 posts) -

Its not doom and gloom when facts stare you in the face. The PS4 is beating the Xbox One in sales by a sizable margin. That's a fact. Sony as a company is hemorrhaging money and those PS4 sales will not be nearly enough to stave off eventual bankruptcy. People have been saying that Sony is in trouble for years. Fact. Slowly its sinking, that too is a fact. They would never, ever sell to MS. But I would not be shocked within 2 years if MS made a offer. When you have to release preliminary "Well, our quarterly reports are worse than we expected them to be" notices before you announce the official report then you know shit really is bad.

Now we will sit back as Cows call Lems "Couch Financial Analysts," and that restructuring takes time, but with smart moves and focusing on what works they can turn this all around.... unlike the Xbox One doing the same as its doomed, lol.

#13 Edited by _Matt_ (8924 posts) -

@sts106mat said:

@_Matt_ said:

@sts106mat said:

@Blabadon said:

Outside the PS4, they've really fallen behind in nearly every market there is.

they seem to be trimming back everything, optical drives out, VAio out, and they are struggling with TV's and I'd guess phones too. besides playstation, what products can they work on to increase profitability?

I think their phones are doing reasonably at the moment considering. Obviously not the best, but I think well enough to not panic about them too much (especially with some recent exceptional value mid range phones)

well I don't know, they look good products as you'd expect, but i dont see them around anywhere. here in UK the iphone is king, windows phone seems to be increasing in popularity now. although it's nowhere close to iphone or ever will be. everyone i know with an iphone complains about it though lol.

(I'm in the UK too) Sure iPhone is king, and then you have Samsung snapping very closely behind and HTC also competing hard for the high end phones...

But at the mid budget/range - HTC phones are unreliable, Samsung phones are bloated and slow, Apple... well, they don't know what mid budget is, and Nokia is dying a slow death in the hands of Microsoft currently... So really that just leaves Sony for decent mid budget phones. Sure it needs a bit more advertising, but they have the phones there, and I think they're doing reasonably well.

#14 Posted by FoxbatAlpha (7424 posts) -

Eddie says I can quit one of my night jobs once the baby is here.

#15 Posted by FoxbatAlpha (7424 posts) -

While Playstation recorded a profit of $172 million, it is nowhere near enough to keep this giant alive.

#16 Posted by sts106mat (19857 posts) -

@_Matt_: nokia completed the sale to MS the other week. I have a windows 8 phone and i love it. far and away the best phone i've ever had.

#17 Edited by _Matt_ (8924 posts) -

@sts106mat said:

@_Matt_: nokia completed the sale to MS the other week. I have a windows 8 phone and i love it. far and away the best phone i've ever had.

What model you got?

#18 Posted by shawn30 (4367 posts) -

@FoxbatAlpha said:

Eddie says I can quit one of my night jobs once the baby is here.

LMAO!!!!!

#19 Posted by misterpmedia (3468 posts) -

@_Matt_ said:

Sony is doomed!

etc.

#20 Edited by shawn30 (4367 posts) -

@misterpmedia said:

@_Matt_ said:

Sony is doomed!

etc.

Official Cow response to all negative Sony news no matter how factual it is:

#21 Posted by B4X (5257 posts) -

As I said in the Watch_Dogs thread. Going Sony for multi-plat online games is the wrong move.

They don't even own their servers. Sony shuts down servers every month for older games. What happens when they can't pay those server bills?

I'll wait at least till next years first quarter fiscal report, before I go Sony for my multi plat games that are online.

Single player games are the only games I buy on my PS4 barring exclusives.

#22 Posted by ghostwarrior786 (5071 posts) -

Haha lem circle jerk in this thread, sony and playstation isnt going nowhere. The financial experts in here can pray for its demisebut its not going to happen

#23 Edited by FoxbatAlpha (7424 posts) -

@b4x said:

As I said in the Watch_Dogs thread. Going Sony for multi-plat online games is the wrong move.

They don't even own their servers. Sony shuts down servers every month for older games. What happens when they can't pay those server bills?

I'll wait at least till next years first quarter fiscal report, before I go Sony for my multi plat games that are online.

Single player games are the only games I buy on my PS4 barring exclusives.

It seems like as of late, the server shut downs are more frequent.

I guess the financial forecast is as up front as Sony is going to be at the moment. CEO's, studios, developers, entire product lines closing and quitting are a big indication if you read into it but running the servers $$$ is a new entry into the cutback formula.

#24 Posted by sts106mat (19857 posts) -

@_Matt_ said:

@sts106mat said:

@_Matt_: nokia completed the sale to MS the other week. I have a windows 8 phone and i love it. far and away the best phone i've ever had.

What model you got?

I have the lumia 925.

my brother recently got 1020. it has a huge bump on the back where the camera lens is, but the camera has 41megapixels. Majornelson posted a picture of the 1520 which is massive. bit too big maybe?

#25 Posted by misterpmedia (3468 posts) -

@shawn30 said:

@misterpmedia said:

@_Matt_ said:

Sony is doomed!

etc.

Official Cow response to all negative Sony news no matter how factual it is:

When PlayStation is stated to be officially sold off or Sony states it's officially bankrupt and going into mass liquidation to the end all be all, I will then type out my concern. It's a perfect response for a topic where 99% of the posters are lems, even the TC is a rabid lem, that don't even give a shit about this to begin with. I'd rather get in quick and leave before the synchronised orgasming about Sony going bust happens. ;p.

#26 Edited by sts106mat (19857 posts) -

@ghostwarrior786 said:

Haha lem circle jerk in this thread, sony and playstation isnt going nowhere. The financial experts in here can pray for its demisebut its not going to happen

there's isn't a circle jerk and nobody is praying for their demise. we are talking about the state of sony and what they can do to improve.

#27 Edited by B4X (5257 posts) -

@misterpmedia:

The real question is. Can Sony handle these loses for another console generation? I'm talking 5+ years. Right now the company is cannibalizing itself to stay afloat.

It has already been 5+ years of losses.

Until then I will protect my investment. This has nothing to do with being a fanboy. Gaming is not a cheap hobby.

To lose an online library of games is scary. At least for me.

#28 Posted by _Matt_ (8924 posts) -

@sts106mat said:

@_Matt_ said:

@sts106mat said:

@_Matt_: nokia completed the sale to MS the other week. I have a windows 8 phone and i love it. far and away the best phone i've ever had.

What model you got?

I have the lumia 925.

my brother recently got 1020. it has a huge bump on the back where the camera lens is, but the camera has 41megapixels. Majornelson posted a picture of the 1520 which is massive. bit too big maybe?

Excellent choice, sir.

Well, for your choice at least; though personally the 1020 seems pointless to me. 41 megapixels is great but it still has a tiny aperture so still pretty limited compared to dedicated cameras, may as well get an SLR if you're that serious about decent photos. I'm sure it takes amazing photos mind, just not worth it for me with that bump on the back being there and all.

#29 Posted by Funk21312 (39 posts) -

God bless humble Microsoft for letting Sony do well this gen

#30 Posted by sts106mat (19857 posts) -

@_Matt_ said:

@sts106mat said:

@_Matt_ said:

@sts106mat said:

@_Matt_: nokia completed the sale to MS the other week. I have a windows 8 phone and i love it. far and away the best phone i've ever had.

What model you got?

I have the lumia 925.

my brother recently got 1020. it has a huge bump on the back where the camera lens is, but the camera has 41megapixels. Majornelson posted a picture of the 1520 which is massive. bit too big maybe?

Excellent choice, sir.

Well, for your choice at least; though personally the 1020 seems pointless to me. 41 megapixels is great but it still has a tiny aperture so still pretty limited compared to dedicated cameras, may as well get an SLR if you're that serious about decent photos. I'm sure it takes amazing photos mind, just not worth it for me with that bump on the back being there and all.

I've seen some cracking pictures that he has taken, but they are all macro type as you imagine. I couldn't be doing with the bump either. when it's up for renewal i'll be getting another WP8, i just love the interface and ease of use.

#31 Edited by misterpmedia (3468 posts) -

@b4x If Sony finally gets swallowed by the black hole, what makes you think that that ultimately means the end of PlayStation brand? Truth is, you don't know.

#32 Posted by FoxbatAlpha (7424 posts) -

@misterpmedia said:

@b4x If Sony finally gets swallowed by the black hole, what makes you think that ultimately means the end of PlayStation brand? Truth is, you don't know.

Who said anything about the end of the Playstation brand? I know you hate sony but that is going a little too far.

#33 Posted by BattleSpectre (6238 posts) -

I feel bad for them son, I've got 99 problems but a bitch ain't one.

#34 Posted by B4X (5257 posts) -

@misterpmedia said:

@b4x If Sony finally gets swallowed by the black hole, what makes you think that ultimately means the end of PlayStation brand? Truth is, you don't know.

Until I know for sure. Then we can have this conversation. Dreamcast was an amazing counsel. I loved its game line up. I would have bought the system, even if I knew its fate before hand. The difference is we are living in a online world now. There is more risk. That's all I'm saying.

If I have the option to get the same game on PC/X1. I'm going that route. P's mean jack shit. When my money is involved.

#35 Edited by misterpmedia (3468 posts) -

@FoxbatAlpha said:

@misterpmedia said:

@b4x If Sony finally gets swallowed by the black hole, what makes you think that ultimately means the end of PlayStation brand? Truth is, you don't know.

Who said anything about the end of the Playstation brand? I know you hate sony but that is going a little too far.

What's the point of the topic if it's not related to the PlayStation brand lol. Come on Justin(ew feels weird using your real/e-name).

#36 Posted by Ghost120x (3917 posts) -

I hope sony sells off the playstation so it will survive the fallout.

#37 Edited by kuu2 (7373 posts) -

Yawn, another week and more bad financial news.

*where is my Sony financial sticky*

Nothing to see here folks, wondering when Kaz will be fired. You can't keep saying we are turning it around and keep losing tons of cash.

#39 Posted by stationplay_4 (443 posts) -

@Ghost120x said:

I hope sony sells off the playstation so it will survive the fallout.

why would they sell playstation when it's one of the only things making money. lol

#40 Posted by bforrester420 (1662 posts) -

Even if Sony does go bankrupt, it'll more than likely be the debt restructuring style of bankruptcy, not the "chain the doors, we're out of business" type. The company I work for had the 7th largest bankruptcy in U.S. history and we're still in business over a decade later.

#41 Edited by TheTruthIsREAL (761 posts) -

Very unfortunate. I'd hate to see the death of a company. Playstation is doing fine and can do fine on it's on. Sony needs to sell of the division that is causing them to lose money and focusing on things that profits. If not, I'd rather have them sell the Playstation brand to company like Google or Samsung. Whichever fits the shoe more.

@stationplay_4 said:

@Ghost120x said:

I hope sony sells off the playstation so it will survive the fallout.

why would they sell playstation when it's one of the only things making money. lol

Because if Sony keeps losing money, there won't be a Playstation.

#42 Edited by tymeservesfate (1973 posts) -

@ghostwarrior786 said:

Haha lem circle jerk in this thread, sony and playstation isnt going nowhere. The financial experts in here can pray for its demisebut its not going to happen

#43 Edited by tdkmillsy (1402 posts) -

While Sony going bankrupt would be funny on these forums, I hope they don't and don't expect it.

They are cutting their losses and will end up a lot smaller but at least profitable and the PS4 will have some impact on that. Sony has a lot to thank Microsoft for. Microsoft could have very easily gone for the throat. But they made some mistakes/less risky decisions and this allowed the PS4 to sell and hopefully help Sony stay afloat.

#44 Posted by Indicud (739 posts) -

So this is what the lems use to grasp on to as ownage?

Hey, take whatever you get. A homeless man wouldn't pass up a half eaten samwidch.

#45 Posted by LJS9502_basic (151504 posts) -

*yawn* More financial news in SW. I bet if you looked into most business ventures you would see the economy affected them. Seriously....it's sad that SW dwells on business balance sheets. Guess that means the PS4 must be doing it's job I guess. TC don't be so butt hurt over a console.

#46 Posted by regnaston (248 posts) -

The best thing for gamers would be for PS4 to spin off as a separate company and then form strategic partnerships with an outside firm (like apple - or heck being bought out by Apple :D ) .

No one should want less competition in the field as it leads to less innovation and higher prices.

#47 Posted by Tighaman (975 posts) -

sony better start putting playstations inside the tv and sell it unless they do something drastic i do know how they gonna survive like that,

#48 Posted by LJS9502_basic (151504 posts) -

@regnaston said:

The best thing for gamers would be for PS4 to spin off as a separate company and then form strategic partnerships with an outside firm (like apple - or heck being bought out by Apple :D ) .

No one should want less competition in the field as it leads to less innovation and higher prices.

Apple would be the worst thing to happen....fanboys. smh

#49 Posted by regnaston (248 posts) -

@LJS9502_basic said:

@regnaston said:

The best thing for gamers would be for PS4 to spin off as a separate company and then form strategic partnerships with an outside firm (like apple - or heck being bought out by Apple :D ) .

No one should want less competition in the field as it leads to less innovation and higher prices.

Apple would be the worst thing to happen....fanboys. smh

I dont own any apply products so I am not a fanboy :D

#50 Edited by Heil68 (45224 posts) -

Glad to see PS4 is rolling LARGE guys. It's truly a marvel of showing what happens when you put the gamers FIRST and it all started with the by gamers FOR gamers mantra and then if that wasn't good enough they couple it with the Live, Learn and Love philosophy.

We are ALL humbled SONY.

Thank you.