Report: Sony prepares for $3 billion IPO

PlayStation 3 maker to float shares in its insurance division, raising cash for ailing games arm.

Electronics giant Sony is set to sell 725,000 shares in an initial public offering of its insurance unit, Tokyo-based Sony Financial Holdings, reports Bloomberg.

The deal is likely to be Japan's biggest IPO this year, and trading will start on the Tokyo Stock Exchange on October 11. The stock is expected to raise approximately 332 billion yen ($2.86 billion) for the electronics manufacturer.

Analysts believe that the funds are likely to be siphoned to the consumer electronics and games divisions of the corporation, to make more Bravia TVs and to offset the losses being incurred by the PlayStation unit--and it may also be a sign that a further PS3 price cut will soon on the cards.

Mitsuhiro Osawa, analyst at Mizuho Investors Securities, said, "Sony could use the funds for various options to strengthen its electronics and game businesses. A cut in the price of the PlayStation 3 is one option." Osawa rates Sony "outperform," meaning that he thinks Sony shares will do better in the near future than the market overall.

207 Comments

  • ChiefFreeman

    Posted Oct 1, 2007 6:15 pm PT

    great news.

  • LastSymphony

    Posted Sep 5, 2007 5:00 pm PT

    Why cant we all just forget about fanboy-encys and just learn to get along without all the fighting and all the lazy spelling *cough abdullrahman *

  • lamprey263

    Posted Sep 5, 2007 2:36 pm PT

    @abdullrahman "you are saying that Sony dos that because of halo wait and see wen MGS4 comes MS fanboys wil go crying."

    funny, PS3 fanboys have been saying forever "just wait until Resistance comes out... just wait until Lair comes out... just wait until MGS4 comes out"; it's all about waiting to have your pride shattered, isn't it?

    Also, you said Microsoft has "bad costumer serves; are you kidding me?! Microsoft has some of the best customer service around.

  • sony_fann

    Posted Sep 5, 2007 12:58 pm PT

    OsLHimura - Do you seriously believe that the Japanese would sell Sony off to its arch rival in terms of gaming? Sony's Ps2 has a wide dominance in the world market outselling Xbox & Xbox 360 with over 80+million units selling worldwide. !!BE SERIOUS!!

  • Homerj

    Posted Sep 5, 2007 11:10 am PT

    Perhaps instead of releasing stock shares, Sony could instead release a few AAA titles for its console, or at the very least, release a dev kit that the 3rd party developers can use instead of one thats crippled because of some paranoia about protecting their IP. Sony could easily bring their entertainment into the black....develop and release software that makes their hardware a gaming console instead of an overpriced cable box/dvd player.

  • mwa

    Posted Sep 5, 2007 10:29 am PT

    well this is sad, sony has to go through a multibillion dollar IPO of a totally unrelated division just to shore up the consumer electronics division because it's so deep in the red

    this really tells you a lot about the financial health (or lack thereof) of the company as a whole...hell, MS had to take a $1.5 billion charge because of manufacturing problems with the 360 but at least the company had cash on hand to absorb the hit...sony, on the other hand, has a serious problem if it has so little cash that it needs to start selling off portions of its other businesses to the investing public in order to keep the PS3 afloat

  • Agermemnon

    Posted Sep 5, 2007 10:23 am PT

    @abdulrahman lol come off it i don't think the M$ fanboys will be crying when MGS4 is out please , whats the point ? it will probably come out on 360 anyway

  • vacancy009

    Posted Sep 5, 2007 9:53 am PT

    @abdullrahman HK-47 is just saying Sony should offer a price break around when Halo 3 releases to draw some attention away from Halo 3 to the PS3. Most of Sony's biggest hits will actually be Q1 next year so they have to do something to keep some focus on the PS3. It's actually not a bad idea, but like the analysts have been saying , they will likely wait till the Holiday season if they actually do drop the price.

  • abdullrahman

    Posted Sep 5, 2007 8:04 am PT

    @ HK-47-M4 you are saying that Sony dos that because of halo wait and see wen MGS4 comes MS fanboys wil go crying.
    I want you to see MGS4 game play.I agree that Xbox360 has good games
    but bad costumer serves.

  • ynfive

    Posted Sep 5, 2007 3:06 am PT

    Sony will ALWAYS sell miltitudes of industrial and personal electronics. Having the PS3 actually drain profits from the rest of their industries should not be a problem. This article says to me though that Sony is preparing for something big. It may not necessarily be a price drop on the 80GB version as much as it is a preparation to the holiday season. And that holiday season can mean ANY of their electronic offerings, and I'd say most noteably more toward their HD monitor selections. 2006 holiday season showed the biggest consumer intake of HD monitors to date. HD sold out like Furbys and Tickle me Elmos. This season I expect to top that.

  • tefrin

    Posted Sep 4, 2007 11:10 pm PT

    this is all speculation there is no fact here other then the stock offering

  • gatsbythepig

    Posted Sep 4, 2007 10:52 pm PT

    They'll recoup it, they need 5 years.

  • Eclipse_ShinRa

    Posted Sep 4, 2007 10:34 pm PT

    @ninjasam, not by much..

  • Incubus420

    Posted Sep 4, 2007 10:07 pm PT

    Wow this is a big step in the right direction...Just toss money at the problem, that will do it!?...How about more games?

  • Mr_HiTmAn

    Posted Sep 4, 2007 9:33 pm PT

    Their setting up for a x-mas price drop.

  • Xcommand

    Posted Sep 4, 2007 9:18 pm PT

    SalarianChemist, I'm sorry but I think your are making some misunderstanding. Sony's target is to ship (not to sell) about six million hardware by the end of March 2007. Second, Sony is not losing great money. They lose money in PS3 hardware, but their money is still increasing because of Sony's other branch such as TVs, Movie etc.

  • SalarianChemist

    Posted Sep 4, 2007 8:46 pm PT

    Playstation 3 is selling very poorly all over the world. Sony said that their goal was for the PS3 to have sold six million systems by March of 2007. Unfortunately, it is now September, and there are only four million PS3 systems that have been sold. Sony is obviously in big trouble if they need to use the money generated by issuing shares of stock to the public. That is the sort of stuff Sega had to do before it stopped making hardware...and I have heard several websites talk about how the Playstation 3 and PSP will be Sony's last hardware units, due to the loss of money associated with those units, just like this Gamespot article is referring to.

  • ninjasam

    Posted Sep 4, 2007 7:29 pm PT

    people make plenty of comments about price cuts and games, the fact is, ps3 price cut came, sales rose immediatly.

  • lamprey263

    Posted Sep 4, 2007 5:44 pm PT

    @MichaeltheCM - I don't think their going to cut the PS3 price any further, at least not for the 60GB, but their probably preparing to sell the 80GB for $500

  • dreadkght

    Posted Sep 4, 2007 5:11 pm PT

    I currently have all 3 systems and a price cut doesn't do anything for me or the other people who already bought the system. Release good games then I'll care about my dust bunny ps3. Till then Halo3 all the way.

  • MichaeltheCM

    Posted Sep 4, 2007 5:07 pm PT

    further PS3 price cut?!?!?!?/!

  • spidey223

    Posted Sep 4, 2007 4:24 pm PT

    HK-47-M4 - i'm looking forward to playing Halo3 as much as the next guy. and it will indeed be huge. however, just to clarify, i don't think it alone compares across the board with the entire company of Sony Industries. but it terms of your idea during the release of Halo3, i think any self-respecting, competitive console gaming company (Nin and Sony) would, and does, have some sort of economic plan of action in place. it actually sounds like Sony has more than one plan in place to offset the Halo3 "onslaught" as you call it. as a gamer, i'm looking forward to all of it.

  • TKandPBC

    Posted Sep 4, 2007 4:16 pm PT

    @Bug-40 When you said richer, I thought money sans shares, so I jumped to conclusions for that, my bad. I used the whole Apple vs Microsoft thing to show Microsoft's monopoly on the computer market, increasing Microsoft's overall "power" (there's gotta be a better word...). Microsoft has a good lock on something, whereas Sony is doing well in the entertainment medium market, but does not have a direct monopoly. IMO, when a company has more control in their respective market, and makes more money, plus a large amount of money in hand, I think that it's more "powerful".

  • yencanwasu

    Posted Sep 4, 2007 4:05 pm PT

    unreal tournament 3 will woop halos butt but im waiting for it to come on the 360

  • lamprey263

    Posted Sep 4, 2007 3:48 pm PT

    @HK-47-M4, I agree somewhat with what you're saying. Microsoft fourth quarter strategy for the year is to have a strong line-up of 1st/2nd party games, and good third party support. Sony doesn't have a strong 1st/2nd party line-up for the year. All that they have going for them is 3rd party games, the same ones you see on the X360 or Wii. They're ancipated games are 6 months away. All Sony has going for it is price cuts, but those prices are still way above a system that's actually delivering quality games.

  • HK-47-M4

    Posted Sep 4, 2007 3:42 pm PT

    spidey: I am not saying that they are doing this because of Halo, I am saying that if they are planning a price cut, their best bet would be to do it now to help defend them from the Halo onslaught.

  • spidey223

    Posted Sep 4, 2007 3:39 pm PT

    HK-47-M4 - this news article has NOTHING to do with, or in response to Halo3.

  • HK-47-M4

    Posted Sep 4, 2007 3:37 pm PT

    You know, I just thought, what if Sony is going to use some of this money to ask Warner Brothers for a favor........

  • HK-47-M4

    Posted Sep 4, 2007 3:34 pm PT

    Yeah, they will probably announce a price cut to defend themselves against Halo 3. I mean that's the only thing I think they can do, none of their games this year will be powerfull enough to blunt Halo 3.

  • Bug420

    Posted Sep 4, 2007 3:30 pm PT

    @TKandPBC: I was basing that statement on the Fortune Global 500. Company A making more profit than Company B does not mean that Company A is more powerful. I think overall net worth is the better way to determine which company is more powerful. I thought that is what I was getting when I looked at the Fortune Global 500, but their advertising was a little misleading. It promoted itself as a "ranking of the largest companies in the world" when it was actually a ranking of who brought in the most revenues for 2007. I haven't been able to find the true net worth of each company, so right now I'm not sure who I would label "more powerful." As to M$ vs. Apple, I don't think Apple is up there with M$, I'm not sure where you got that idea. As to Bill Gates vs. Carlos Slim, the title of "richest man in the world" is based on net worth, not cash in bank account, so Gates' shares of M$ are being factored into the equation already.

  • spidey223

    Posted Sep 4, 2007 3:29 pm PT

    just to add - the article also clearly states that the shares they are selling are from their NEW (initial) Insurance unit, Tokyo-based Sony Financial Holdings. see, this isn't the Company of Sony Entertainment, it is a new branch company of Sony. and the word "self-suficient" could be used because business insurance, especially for japanese exports isn't going away any time soon. which allows Sony to make MORE MONEY; meaning, in addition to, and outside of the industry they already perform under. and just so you know, i own an X360 and a PS3... also a DS Lite, a PSP, GameBoy ADV and a nice PC. I've been gaming since the times of the Pong console and Atari, Intellivision and so forth.

  • muzzer77

    Posted Sep 4, 2007 3:27 pm PT

    lamprey263

    Well, if Sony does try another price cut, Microsoft could easily do the same just by dipping into its $14 billion 2007 profit, in constrast to Sony's 102 billion yen ($842 million) 2007 profit. Sony should try selling quality, not try to make this into an arms race of who will go broke first, because people don't refer to Microsoft as "M$" for nothing.


    Sony should try selling quality ! what about M$, if it was not for people 360 braking down and them rushing out to buy an Elite M$ would not make such money. And yes i am on my second 360 and feel cheated by this company. Just because you make the most money does not mean you sell the best quality items as the 360 shows, cheap parts more profit.

  • spidey223

    Posted Sep 4, 2007 3:14 pm PT

    Sigil-otaku - every company hopes to sell shares... see there's this concept called, "a profit." it allows companies to make money off of large and small investment support. which in return, you make a profit and you can make more and better products. it's very simple, really. here's another big clue directly from the article: "The stock is expected to raise approximately 332 billion yen ($2.86 billion) for the electronics manufacturer."

    that's a lot of nuts!

  • AgentZero225

    Posted Sep 4, 2007 3:13 pm PT

    Lets GO SONY!! FTW

  • lamprey263

    Posted Sep 4, 2007 3:12 pm PT

    Well, if Sony does try another price cut, Microsoft could easily do the same just by dipping into its $14 billion 2007 profit, in constrast to Sony's 102 billion yen ($842 million) 2007 profit. Sony should try selling quality, not try to make this into an arms race of who will go broke first, because people don't refer to Microsoft as "M$" for nothing.

  • TKandPBC

    Posted Sep 4, 2007 3:12 pm PT

    "Actually Sony is more powerful than M$. Sony is the 69th richest corporation in the world while M$ is not even in the top 100."

    You don't know a thing about the market do you? Microsoft makes more than 6 times Sony does on an annual basis. Maybe you're looking at the wrong numbers. However, Microsoft is not close to being the most powerful company in the world financially. But remember, that Microsoft has a near monopoly on the computer market. If you think the Apple is up there with microsoft, compare the WWE in it's prime to TNA now, and you'll have MS vs Mac.

    Oh and another thing, Gates may not have the most money in his bank account anymore, but can you imagine how must he has in shares? If he sells off some of his shares, then there is no doubt that he is the richest in the world.

    Also, in terms of any of the competitors forcefully buying each other out, it WILL NOT HAPPEN. The only transaction that is reasonable is for Microsoft to buy Nintendo. However, Nintendo has said it is not for sale. A forceful takeover will result in nothing but a mass walkout.

    In terms of profit, Sony made reasonably well in their console making career, Microsoft just started making money as of recently, and Nintendo NEVER LOST MONEY ON A MAJOR CONSOLE. I have utmost respect for The Big N for that.

  • mrfrieze

    Posted Sep 4, 2007 3:08 pm PT

    Playstation brand dieing? Ya right keep dreaming 360 fans,

  • TheSlaya

    Posted Sep 4, 2007 3:00 pm PT

    To gnutux: Yet blu-ray is outselling HD-DVD on a weekly basis. And they say it's crap compared to HD-DVD...HAHAHAHAHAHAHAHAHHAHAHAHAHA!

  • kingtrewq

    Posted Sep 4, 2007 2:59 pm PT

    why so much sony news today

  • Bug420

    Posted Sep 4, 2007 2:53 pm PT

    Dude, stock price is not how you determine the most "powerful company" in the world. Check out the Fortune Global 500. http://money.cnn.com/magazines/fortune/global500/2007/full_list/index.html

  • sciath

    Posted Sep 4, 2007 2:48 pm PT

    "Bug420

    Actually Sony is more powerful than M$. Sony is the 69th richest corporation in the world while M$ is not even in the top 100. And Bill Gates is not the richest man in the world anymore either, Carlos Slim passed him up. "

    Market Value ($bil)
    1. ExxonMobil 405.25
    2. General Electric 372.14
    3. Microsoft 273.75
    ...
    123. Sony 35.40

  • X-RS

    Posted Sep 4, 2007 2:37 pm PT

    how many stalks in sony do you think bill gates has?

  • gnutux

    Posted Sep 4, 2007 2:31 pm PT

    @kylestarr: All Sony Ericcson come with Memory Stick Pro Duo or Memory Stick Micro, I don't see MS overtaking SD cards...

  • Bug420

    Posted Sep 4, 2007 2:30 pm PT

    Actually Sony is more powerful than M$. Sony is the 69th richest corporation in the world while M$ is not even in the top 100. And Bill Gates is not the richest man in the world anymore either, Carlos Slim passed him up.

  • Prinze

    Posted Sep 4, 2007 2:25 pm PT

    Smart move. Raising more money, bringing in more investors, and a system price cut, that's a smart move for the upcoming holiday season.

  • BumFluff122

    Posted Sep 4, 2007 2:20 pm PT

    Sorry but MS is far far from being the most powerful company in the world. And Sony is even farthjer and Nintendo is farther still.

  • Konfusion

    Posted Sep 4, 2007 1:58 pm PT

    I don't get it when people scream "GO SONY" or whatever. They're an electronics company. Get your fanboyism out of yourself and realize that this kind of news doesn't just affect the PlayStation brand, but anything they do, from alarm clocks to walkmans to televisions. "Go Sony" ... come on... I just ate a Oh Henry bar, I'm not gonna go scream "go Hershey" ... geez...

  • greenpyro33

    Posted Sep 4, 2007 1:56 pm PT

    I really hope they succeed. They deserve it.

  • Sigil-otaku

    Posted Sep 4, 2007 1:55 pm PT

    @katanamaster: the majority of people who buy any console are happy, I don't know many that dislike any console they have online or off line. I do have a friend that has the PS3 and he thinks they did an excellent job on it but he dislikes the amount of good games on it (his opinion of good games) as he only plays Ninja gaiden sigma and Virtua fighter 5 on it (he has 4 games and doesn't like 2, likes the 2 previously mentioned and doesn't want anymore at the moment). As for me, I like my 360 but with the red ring of death happening just yesterday I can say I play no games on it. I am having it sent back to be fixed and I don't care what people have to say cos a good console is worth fixing and thats what I'm doing. A real gamer should be able to have fun on all the consoles and thats what I hope to be doing soon too.

  • playstation_wii

    Posted Sep 4, 2007 1:54 pm PT

    Go SONY!

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