Topic: Sony getting hit Hard lately

[couchmonkey]

There's never really been a serious contender with the most expensive console in the past.  Neo Geo, Jaguar, 3DO...we all knew they were doomed right from the start, didn't we?

*dittos the question of Blu-ray vs. HD DVD sales*

[SixthAngel]

I have heard people say that if (big if) it catches on blu-ray could take years like dvd just to be accepted.  Correct me if I am wrong but if it takes 4 years for people to like the format won't that basically make putting it in the PS3 a waste because by that time people will be buying new systems and getting rid of older ones, negating the install base they want.

Couch monkey is right about the most expensive always being a pretty obvious failure but PS3 is counting on the brand recognition they didn't have.  To me PS3 is riding 100% on brand recognition and I think it will barely carry them farther then these past expensive consoles.

[BigJim]

No official news on BRD/HDDVD sales yet. Neither camp is talking.

But the best basic data available is that sales are only in the tens of thousands combined, and that, for what its worth HDDVD is likely ahead since it launched earlier and is cheaper. Too early to tell.

[Requiem]

It's going to take forever for BRD or HD to catch on. Alot of people still have SDTV's and only when they decide to buy a new HD set will they MAYBE consider buying an HD player.

So basically until HD sets drop drastically in price (and make SD cheapness a non-factor) will HD-DVD's be embraced like DVD's.

[Ceric]

Ok lets say it take 4 years for the formats to get to the point of common acceptance.  What's a big problem for Sony right now?  Piracy.  So that's about 4 years worth of time that a burner would probably not be available and also there bound to do more game sales in that time then Blu-Ray Movies because that's a lifespan of a game console.  More demand for raw media which means more people are likely to open plants that will accomodate.  So when it does come time for a full push production capacity should be a good deal larger and more refined then it would have been otherwise.  I personally don't beleive that using Blu-Ray as the format for a the PS3 is a mistake but I believe toting(sp?) it as a major feature is.

[KDR_11k]

Ok lets say it take 4 years for the formats to get to the point of common acceptance.

4 years until they are commonly accepted as being like SACD and DVDA.

[Louieturkey]

Quote
Originally posted by: KDR_11k
When you compare HD-DVD next to Blu-Ray, HD-DVD looks 10x better and its very notesable which is very surprising since Blu-Ray has more storage space and Sony kept promoting that it was better quality.

I seem to recall that being because of a bad player, they both use the same codecs and everything.

This is true.  The HDMI slot on the Samsung player is processing the video stream incorrectly.  digitalbits.com did a comparison with the yet-to-be-released Pioneer Elite player and there was a huge difference in quality on the same discs with the two players.  Using the Pioneer player, HDdvd and Bluray are on par with each other.  To get close to this picture on the Samsung player, you need to use the component out as the analog flag has yet to be introduced to either bluray or hddvd.  When they did component on the Samsung player and HDMI on the Pioneer player, the quality was near the same.  Most people would not notice the difference.

[GoldenPhoenix]

Quote
Originally posted by: Louieturkey

Quote
Originally posted by: KDR_11k
When you compare HD-DVD next to Blu-Ray, HD-DVD looks 10x better and its very notesable which is very surprising since Blu-Ray has more storage space and Sony kept promoting that it was better quality.

I seem to recall that being because of a bad player, they both use the same codecs and everything.

This is true.  The HDMI slot on the Samsung player is processing the video stream incorrectly.  digitalbits.com did a comparison with the yet-to-be-released Pioneer Elite player and there was a huge difference in quality on the same discs with the two players.  Using the Pioneer player, HDdvd and Bluray are on par with each other.  To get close to this picture on the Samsung player, you need to use the component out as the analog flag has yet to be introduced to either bluray or hddvd.  When they did component on the Samsung player and HDMI on the Pioneer player, the quality was near the same.  Most people would not notice the difference.

Wait a second, let's say you are right about Bluray being comparable to HD-DVD when using the HDMI slot.  If that is the case, then why in the world is Bluray 2xs the price of HDDVD when they are comparable in quality?

[NinGurl69 *huggles]

Because Sony believes their R&D is more important and they probably spent more money in R&D only to get comparable results.  And the name "Sony" is quite expensive anyway.

[GoldenPhoenix]

Quote
Originally posted by: Professional 666
Because Sony believes their R&D is more important and they probably spent more money in R&D only to get comparable results.  And the name "Sony" is quite expensive anyway.

Doesn't sound like a good reason to me, but it is Sony who we are talking about. I think the bluray really shows how arrogant Sony has become, to release an already expensive medium (HD DVD drive) at double the price of the competitor is ridiculous.

[EasyCure]

Quote
Originally posted by: KDR_11k
Ok lets say it take 4 years for the formats to get to the point of common acceptance.

4 years until they are commonly accepted as being like SACD and DVDA.

you guys lost me when this started becoming a hd-dvd and brd discussion (which i thought there was already a thread for anyways) but that last line threw me off. the only DVDA i know is trey parkers band and what it stands for is pretty sick. i doubt thats what you meant but now im tottally gone in this thread.

[Kairon]

DVD-Audio?

~Carmine M. Red
Kairon@aol.com

[NinGurl69 *huggles]

Quote
Originally posted by: EasyCure

Quote
Originally posted by: KDR_11k
Ok lets say it take 4 years for the formats to get to the point of common acceptance.

4 years until they are commonly accepted as being like SACD and DVDA.

you guys lost me when this started becoming a hd-dvd and brd discussion (which i thought there was already a thread for anyways) but that last line threw me off. the only DVDA i know is trey parkers band and what it stands for is pretty sick. i doubt thats what you meant but now im tottally gone in this thread.

My sarcasm radar is picking up multiple aircraft.

[Athrun Zala]

Quote
Originally posted by: VGrevolution
Wait a second, let's say you are right about Bluray being comparable to HD-DVD when using the HDMI slot.  If that is the case, then why in the world is Bluray 2xs the price of HDDVD when they are comparable in quality?

what Pro said

and the fact that BR has some differences with HDDVD, which results in the former being more expensive to produce (both players/recorders and discs)

[Ceric]

If they want to win they need to get off there butts and do what they should off done with the first titles.  But that extra space to good use.  Anybody heard of SuperBit DVDs?  There are DVD's that only have the movie on them and use the space from taking out the extras to better encode everything.  That's what Sony should have done.  They should have used the space and had no extras.  If you could put the whole movie on the disc in it's raw format you aren't going to get better then that.

[TrueNerd]

Quote
Originally posted by: EasyCure<br
the only DVDA i know is trey parkers band and what it stands for is pretty sick.

Hahahaha, YEAH IT IS! Let's just say women who can/are willing to do that are not women you want to take home to meet the family.

I'll throw in another PS3 rant here. Sony's positioning the PS3 in an odd spot. On one hand, blu-ray enthusiasts are going to look at the system as the most affordable blu-ray player and probably not buy a large amount of games, if any. On the other, PlayStation fans may not buy many blu-ray movies. I think it's more likely that gamers will buy blu-ray movies, but I really don't see many people buying the PS3 for the main purpose of movie watching buying games. I'm sure there are some that want both, but enough to justify the odd position the system is in? Software sales are where Sony will make it's cash, and I wonder if they're not shooting themselves in the foot by marketing this thing to two separate groups of consumers. For whom is this system really for? Of course, Sony would answer "Everyone!" but then there's that nagging issue of the $600 price tag.  

[KDR_11k]

I'll throw in another PS3 rant here. Sony's positioning the PS3 in an odd spot. On one hand, blu-ray enthusiasts are going to look at the system as the most affordable blu-ray player and probably not buy a large amount of games, if any.

PSP.

[GoldenPhoenix]

Quote
Originally posted by: KDR_11k
I'll throw in another PS3 rant here. Sony's positioning the PS3 in an odd spot. On one hand, blu-ray enthusiasts are going to look at the system as the most affordable blu-ray player and probably not buy a large amount of games, if any.

PSP.

Eactly, which is why I have never cared much for this philosophy of making multi functional entertainment systems when the focus should be on gaming.

[couchmonkey]

Yeah, I agree on that point, VGrevolution.  I don't mind seeing media playback as secondary functionality, it sure worked out well for PS2, but when it seemingly adds $200 to the price like the PS3, I think it's a problem.

Looking at the last page, we were discussing PS3 having brand recognition, but it also has third-party momentum which those other consoles lacked.  Final Fantasy XIII and MGS: Guns of the Patriots will sell some systems.  But they might still be too little too late.  Still, I'll grudgingly admit that if Nintendo was making this system I would probably give in and buy it once Mario and Zelda came out.  I'd try to wait for the first price drop but even then you're going to pay at least $500 US.  On the other hand, if Nintendo was making this system, I'm pretty sure it would be dead meat.

[Smash_Brother]

Quote
Originally posted by: couchmonkey On the other hand, if Nintendo was making this system, I'm pretty sure it would be dead meat.

A news story on financial website Bloomberg.com indicated that last week Sony took out an ¥80 billion ($698 million) three-year floating-rate bank loan, as PlayStation 3 production expenses loom.

The report noted that Sony confirmed that the loan, which came from more than 20 Japanese lenders, was made “to diversify funding sources”, and represented the company's first bank borrowing in 10 years.

Ironically, Nintendo made roughly $800 million in profits from the DS, mostly from software sales, more than the amount Sony is being forced to borrow in order to build these PS3s.

I think the term "dead meat" applies to Sony at this point in time.

With DVD, the format was already established and the PS2 helped to push it further into the market.

In the case of BluRay, the format has yet to be established, is unproven, and only works with a product which is owned by very few people.

[KDR_11k]

I think the term "dead meat" applies to Sony at this point in time.

I don't think so, Sony can bleed for a long time before dying. If Bluray fails they might trim the budgets of the games division to appease shareholders but I wouldn't expec to see Sony explode anytime soon.

[EasyCure]

Quote
Originally posted by: Kairon
DVD-Audio?

~Carmine M. Red
Kairon@aol.com

thats what i thought but wasnt sure. im not good on all the technical stuff you guys talk about most of the time. i joined the furoms to talk about games but some of the other issues are interesting too, but when i read things like brd dvda sacd, it sounds like mumbo jumbo to me. now i feel like an old man or something. oh well

[Smash_Brother]

Quote
Originally posted by: KDR_11k I don't think so, Sony can bleed for a long time before dying. If Bluray fails they might trim the budgets of the games division to appease shareholders but I wouldn't expec to see Sony explode anytime soon.

Did you miss the part where they borrowed $700 million?

This will be the first time they've borrowed money in 10 years. I'm sure there have been plenty of times during those 10 years during which they would have had a strong opportunity to "diversify funding sources”.

Thus, they wouldn't be borrowing this money unless they didn't have money of their own to spend. Why incur loss via interest and the negative press which comes from taking out a loan unless you ABSOLUTELY have to do so? Sony's stock is already listed as a "strong sell".

If the PS3 and Bluray fail, I see no evidence which suggests that it WON'T be the end of Sony.

[vudu]

Financing growth opportunities with borrowing is nothing new.  Almost all companies have at least some short and/or long-term borrowings.  The only other option for raising capital is to issue new stock.  Current stockholders typically aren't a fan of this option because it dilutes their interest in the business.  Just because Sony is accepting some extra cost due to interest on loans doesn't mean they're in deep trouble.

For the past ten years Sony has most likely funded projects through retained earnings (i.e. profits not paid out in dividends).  All this means is that Sony plans to spend more money in the short-term than they expect to earn.  This is a perfectly acceptable business practice for the short-term (especially for Japanese companies which are typically more long-term focused than Western companies).  Of course, no company is able to survive if they continuously spend more money than they make; but Sony is going to be fine (as far as we know from the information available) for the time being.

[Smash_Brother]

Quote
Originally posted by: vudu
Financing growth opportunities with borrowing is nothing new.  Almost all companies have at least some short and/or long-term borrowings.  The only other option for raising capital is to issue new stock.  Current stockholders typically aren't a fan of this option because it dilutes their interest in the business.  Just because Sony is accepting some extra cost due to interest on loans doesn't mean they're in deep trouble.

For the past ten years Sony has most likely funded projects through retained earnings (i.e. profits not paid out in dividends).  All this means is that Sony plans to spend more money in the short-term than they expect to earn.  This is a perfectly acceptable business practice for the short-term (especially for Japanese companies which are typically more long-term focused than Western companies).  Of course, no company is able to survive if they continuously spend more money than they make; but Sony is going to be fine (as far as we know from the information available) for the time being.

I know what you're saying, but the thing is, the other option for capital is selling products so as to make money.

I have heard nothing about Nintendo taking out a loan to manufacture the Wii, despite the fact that it recently went into production and the motion-censor technology is supposed to be rather expensive to create. Despite the fact that the GC is underperforming, Nintendo doesn't need to seek other means of funding.

Also, Sony's stock is listed as either a "sell" or "strong sell" by most companies, and I cannot help but think that it was the taking of the loan which made firms wary of Sony's status.

It's a well known fact that the only remaining division of Sony which is profitable is the Playstation division. The new BluRay mobilization is probably sucking up most of their remaining funds. Given that they're taking out this loan, I don't see why one should believe that they're doing this JUST to capitalize on a favorable market, especially when neither of their competitors are doing the same.

I'm also betting that the PSP has been a money sink, as they reportedly lose $100+ on each PSP sold and the software tie-in ratio is absolutely horrible.