PlayStation 4 May Struggle With Profitability

[Smooth3d]

http://www.ign.com/articles/2013/08/09/playstation-4-may-struggle-with-profitability

Sony may be winning the race for positive buzz and consumer goodwill over its rival Microsoft in the months leading to the release of PS4 and Xbox One, but interesting choices the company made in recent years may hinder the company from making heavy profits once the console’s out the door.

As we reported last week, Sony turned a very modest profit in the last fiscal quarter. However, Bloomberg reports that the U.S. dollar’s rise against the Japanese yen may end up hurting Sony’s PlayStation division’s ability to deliver a strong performance on the balance sheet.

“Those currency related losses [from the quarterly report] are poised to deepen as analysts project a further 10 percent rise in the dollar by the end of Sony’s year in March, based on 74 analysts’ estimates compiled by Bloomberg,” the news agency notes, stating later that, “While the weaker yen will lift the value of sales abroad for the new PlayStation 4, margins will be crimped as parts and production are paid for in dollars.”

Sony originally “agreed to pay suppliers in U.S. currency to reduce costs as it made plans to challenge Microsoft in the U.S. video-market.” This was a move designed “to shield its PlayStation game unit from a strengthening yen,” but now that the dollar is on the rise, the move is “backfiring.”

 

[Smooth3d]

@Rekkapryde @satam55 @MeachTheMonster @Teal. Thoughts?

 

[Heretic]

That's pretty much expected early in a console cycle. I don't know the cost for ms to produce but I would'nt be surprised if they sold at a loss but I think each console they made was profitable early on. Sony just needs market share and production cost to drop

 

[Ed MOTHERFUCKING G]

Why should anyone care?

 

[marcuz]

imma let you stan, but i need to thread hijack for a moment



the owner of lavabit shut down his email servers and refused to snitch on his customers to NSA. the video talks about how the gov is encroaching on our privacy as citizens.

 

[Smooth3d]

Im not stanning im bringing news over. Lets be honest if this was MS is losing money thread y'all be in this thread shytting on X1.

 

[kash10003]

i thought that was obvious, they are going for establishing a dominant market share since gaming has taken on a digital online community

 

[PS5 Pro]

^^^ Did anyone actually read the article ^^^

That's pretty much expected early in a console cycle. I don't know the cost for ms to produce but I would'nt be surprised if they sold at a loss but I think each console they made was profitable early on. Sony just needs market share and production cost to drop

I don't think you read the article properly or you misunderstood it. It has nothing to do with "what happens at the beginning of a console's life cycle"

This is about Sony saying they will pay using Dollars instead of Yen, basically trying to get over. But with the rise of the Dollar, this plan backfired

Mo money mo murda mo homicide

 

[el_oh_el]

^^^ Did anyone actually read the article ^^^

I don't think you read the article properly or you misunderstood it. It has nothing to do with "what happens at the beginning of a console's life cycle"

This is about Sony saying they will pay using Dollars instead of Yen, basically trying to get over. But with the rise of the Dollar, this plan backfired

Mo money mo murda mo homicide

So, in courtdogs twisted mind, a company trying to shield itself from a volatile currency is "trying to get over"? I saved a couple grand on this car i bought..I "got over" on them

 

[Mensch Fontana]

not an xbot dont give a fukk if sony makes money

 

[Wild self]

Seems like they didn't learn their lesson.

 

[PS5 Pro]

So, in courtdogs twisted mind, a company trying to shield itself from a volatile currency is "trying to get over"? I saved a couple grand on this car i bought..I "got over" on them

Thats not what happened here. Lets say sony owes you $500
If Ithey tell you "they'll pay you $500 in american cash" what they doing is they know there home countries money (yen) is worth more than the dollar so it won't actually cost them $500
What they didn't count on was the dollar going up in value, so making that "odd" agreement aka them trying to get over on a few bucks backfired into negative MILLIONS

Thats what the article is about, not sure why you wanna get mad at me or fanboy the story into something else. But if thats how you wanna "live" then do you

 

[Heretic]

^^^ Did anyone actually read the article ^^^

I don't think you read the article properly or you misunderstood it. It has nothing to do with "what happens at the beginning of a console's life cycle"

This is about Sony saying they will pay using Dollars instead of Yen, basically trying to get over. But with the rise of the Dollar, this plan backfired

Mo money mo murda mo homicide

I read the article, ps4 will profit eventually. Even though they took a risk, they probably would have struggled to break even either way.

 

[PS5 Pro]

I read the article, ps4 will profit eventually. Even though they took a risk, they probably would have struggled to break even either way.

This article has nothing to do with them struggling at the beginning tho

Yes, every company struggles at the beginning. This article is talking about a special deal sony did that they thought would save money.
It was a weird thing, but I understand the gamble. It backfired, so they taking loses on top of the "launch console losses" that are heading there way
Thats all I'm saying/explaning

 

[Rekkapryde]

Im not stanning im bringing news over. Lets be honest if this was MS is losing money thread y'all be in this thread shytting on X1.

No we wouldn't, because unless Winoffice goes down the train, MS will never be in trouble.

PS4 will be fine, esp with the ps plus for online multi. The Playstation brand wasn't the problem for Sony. It was their other shyt that was killing them, namely their tv and mobile businesses. It shows now in the Sony stock price doubled what it was in December 2012. I only wish I would have copped their stock when it was 10 dollars, but I'm doing really good with it after coppin in February.

The decision to use off the shelf parts will also pay huge dividends. They will outsell the XB1 worldwide easily. More software sales and revenue, Sony will be more than fine.

I do notice that IGN has been extra MS friendly lately.....must have been a nice check.