mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Portal sells at a profit. So it's not a problem at all.
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Sony’s stock value drop by about $10b after lowering PS5’s sales forecast for the fiscal year, analysts question near decade-low profit margin
- Thread starter ArtHands
- Start date
Ar¢tos
Member
Games are a small part of London Studio reason for existence. It's one of Sony biggest studios and their main focus is OS and APIs, and some outsourcing (not sure what kind... Audio/motion capture recording for hire?)
twilo99
Member
Around here calling something "ded" comes very easy so it's understandable.
The big question is why aren't they making more money from all those hardware sales, and I think it's a software problem since they already have an enormous install base to play with.
Doesn't their own CEO kinda disagree thoMarch 2020 was the recent low for the market in general, since then the Nasdaq, which is a good indicator for the overall market, is up ~130% .
Sony is up ~ 72% for the same time period
Most would say that the stock is underperforming considering the performance of the overall market. You can check the DOW and S&P as well.. the numbers are similar
OuterLimits
Member
Why would OP be banned for posting a CNBC article about Sony cutting sales forecast and investors understandably having negative reactions?
We have numerous topics posted here linking news articles that report and analyze the failures and struggles in recent months(years,lol) regarding Xbox.
cash_longfellow
Member
I agree with it being a software thing right now. I expect the end of this year into early next to start getting crazy with exclusive announcements though. That will put us about 4 years past the start of Covid when the whole industry was forced to adapt and work remote, some not working at all. A bunch of games in planning stages and at the beginning of the dev cycle got pushed because of Covid. It’s surprising how many people here have forgotten about that lol
Men_in_Boxes
Snake Oil Salesman
Can you provide us with a list of successful, ~8 hour games released over the last 5 - 10 years?
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Haint
Member
Weak yen ain't got nothing to do with a likely 5 million unit shortfall chief, it's lack of consumer interest in a product that lives and dies on its software roadmap (or lack there of).its a combination of things (missing forecast, slim profit margins), but also includes this:
Japan slips into a recession and loses its spot as the world's third-largest economy
A weaker Japanese yen was a key factor in the drop to fourth place, since comparisons of nominal GDP are in dollar terms.apnews.com
Holding off announcements if not whats causing this lol
Represent.
Represent(ative) of bad opinions
SpiderMan: Miles Morales
Uncharted: Lost Legacy
Hi-Fi Rush
Every COD SP game
Now, just because they are rare, doesnt mean they will fail. The reason they are less common is because we have been trained to think 8 hours = bad.
IF they go back to simply making 8 hour games, and make that the standard again, people will be re-trained and adapt.
People buy whats put in front of them.
Make games shorter. Start there.
Men_in_Boxes
Snake Oil Salesman
1. So a SPIDER MAN game.
2. An UNCHARTED game.
3. A game that bombed commercially.
4. A multiplayer centric CALL OF DUTY.
DeepEnigma
Gold Member
Men_in_Boxes
Snake Oil Salesman
Mother of God...this is some crazy authoritarian BS.
People weigh their options. The only way they buy what's put in front of them is if you eliminate the competition. The competition that is currently burying the short game market.
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DeepEnigma
Gold Member
Evil Calvin
Afraid of Boobs
Just a lost of R&D and wasted time and money for a pointless product.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
So they shouldn't make games with high production values now? I don't get it.
How much R&D do you really think went into chopping a dualsense controller in half and putting a LCD screen in the middle? Really? How much? No way you think they spent over $100 million.
Represent.
Represent(ative) of bad opinions
The only reason 30 hours games sell so much is because THATS ALL THEY MAKE
THAT is my point.
How about they actually try making shorter games, I mean a real fucking effort. Not 4 games. Make TLOU 3, Max Payne 4, God of War 5, 8-10 hours and tell me they wont sell.
You start with the big franchises, then the smaller ones will follow.
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DeepEnigma
Gold Member
Hyperbole.
Represent.
Represent(ative) of bad opinions
In the AAA market? Barely
Men_in_Boxes
Snake Oil Salesman
False.
The industry was once filled with short games. Those games slowly but surely got outcompeted by longer games.
It's like saying the Full Back position in the NFL is extinct because no one drafts FB anymore. No. Teams stopped drafting the FB position because they slowly started realizing how ineffective they were.
Represent.
Represent(ative) of bad opinions
Gonna need a Hockey/Basketball/Real football analogy I dont know shit about fake football lol
The industry was once filled with shorter games, yes, and its no coincidence that era was also considered the golden age of gaming. Its no coincidence. Shorter games = more polish, more focused development, smaller budget, released more frequently
With the size of teams today, and the tech they have access to... shorter games would be so damn good.
Insteat we get endless bloat, 300 million dollar games broken on release. once every 7 years
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Men_in_Boxes
Snake Oil Salesman
Point guards who can't shoot the 3 aren't nearly as common/valuable in the modern NBA because teams finally understood the value of the 3pt shot...not because no one is drafting them high.
You're suggesting publishers just pump out more, short games when that's literally all they did 20 years ago.
Longer games outcompete shorter games.
tmlDan
Member
Yes, it does, are you serious? It's really sad if you think that it has no affect
thicc_girls_are_teh_best
Member
People arent suggesting Sony sell off their financial unit. They are doing it. The are trying to sell off 80% of it, and use the money towards entertainment divisions. That financial unit I believe is consistently profitable, but not a grower. So spin it off so they can focus on more entertainment divisions. They'd actually been looking to do this since last year.
Sony is trying to consolidate the parent company into an entertainment company. So as you said VAIO is gone long time ago. Financial services now. In time that low margin TV and BR player division will be too. It might be entertainment, but it's low margin. Then again, it might be close enough to keep it around as movies and TV shows link up with TVs and home audio.
Sony to Relist Financial Unit on TSE in Oct. 2025
Sony Group Corp. said it will spin off and list the Sony Financial Group Inc. unit again on the Tokyo Stock Exchange in October 2025. In May last year, Sony Group already announced its plan to split...www.marketscreener.com
Yeah and it's probably a bad idea. Why sell off something that is consistently profitable, when your issue with other divisions is they supposedly aren't profitable enough? And now you're selling off one of your most consistent arms in profitability for money to do things in areas that you say aren't profitable enough (such as gaming), but really most of it would be going to an area that is likely losing a lot more money for you than anything gaming-related (the film/tv division)?
Again it's very backwards from the principal they operated on during the PS3 gen when they cut underperforming divisions like the computer line and sold off the VAIO rights. You usually want to keep what's a consistent profit around; PlayStation obviously is also consistently profitable, but budgeting and R&D, also likely licensing and component expenses, have eaten into profit margins. What's the last massive Sony Pictures success at the box office that wasn't a Spiderman film?
Yeah I rest my case.
Braag
Member
I just don't think that alone will be enough anymore, especially if their aim is still to just sell consoles, when components are getting more and more expensive.
Haint
Member
And how exactly does a weak Yen affect the overwhelming majority (>90%) of Sony's potential customer base in NA and EU, or have any impact on them massively missing sales targets in non Japanese markets that were made a year ago and clearly not predicated on any kind of price drop.
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tmlDan
Member
Well we're not just talking about gaming, I said its a multitude of things.
You kind of answered your own question, the cost of making the console hasn't reduced and no price drop equates to less consoles in market (more countries are also entering a recession). Why do you think the cost won't go down? Totoki explained that shrinking the die size is costly and costs of production have actually gone UP. Yes, the weak yen allows them to report higher revenue because the EU and US markets are strong for them in gaming, but it also limits their purchasing power when purchasing parts for a PS5 of which they can't reduce in price. Historically, prices go down over time for old parts and they can reduce the price while keeping the same or stronger revenue.
This instability causes investors to be cautious, including not meeting, ridiculously high, record estimations in console sales. It has nothing to do with sharing future games, investors don't care about games unless they're like GTA - none of them make a blip on the radar.
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thicc_girls_are_teh_best
Member
Only two things I would add here: one, that mobile can also play a key part for multiplatform growth and cause less friction than PC with the console, if they take an approach similar to Nintendo with spinoff games, but also leverage mobile as an expanded audience for internal 1P AA games that can do well there and on console (and some of those could also come to PC, in some cases Day 1 across all three platforms).
The second thing, that SIE does have a pretty good variety of titles on offer. In addition to the GOW Ragnaroks and Spiderman 2s they do have Returnal, Helldivers 2, Astro's PlayRoom, MLB The Show etc. The bigger issue is they simply don't have nearly enough of them, either in-house or with collaborative 3P studios, and they definitely don't have enough that tap into nostalgia for legacy IP. They could also be doing way more on this front with 3P IP that are nonetheless heavily tied to PlayStation in terms of identity.
I normally don't come across decent posts on ResetERA, but this here is actually one of the rare few, aside from a couple of things they're blatantly wrong about I'll address immediately:
Now, they're blatantly wrong about TLOU2 being "completely forgotten" or whatever that's supposed to mean, apparently they don't pay attention to NPD or other charts where if the game were forgotten, it wouldn't have kept breaking into high rankings on those charts when the TV show was going. They're also partially wrong about their portfolio not having a lot of varied games; I just listed some of them above. And of course, they sneak in that "simultaneous PC releases" for what I assume is all games, an outright fatal strategy for reasons I'll mention below.
However, again, SIE could be doing a lot better on that front. The other stuff they mention? I mostly agree with one way or another, but with a lot of context. I think this poster has a very hardline stance on some of this stuff which isn't what I agree with. So point-by-point:
1: Yes headcounts should by and large be reduced to some capacity. AI will probably help play a role in that, but just make sure it's used ethically and not as an excuse to mass-fire tons of people for no good reason other than save costs out of greed for pure profits.
2: I have a different interpretation of "reduce scope", because games like TLOU 2 and GOW Ragnarok definitely have purpose and are also both critical and commercial successes, significantly so in most cases. I would say, "reduce scope" in this context should mean cut down on redundancies.
For example, when you already have TLOU...do you really need Days Gone? Yes that IP has some really cool ideas itself, but I think that's a case where it'd be better to take whatever creative ideas there are for a Days Gone and fold them into a future TLOU title, and have a team comprised of Bend Studio and Naughty Dog employees working together on that type of game.
That way instead of spending potentially $600 million across two games that might have higher revenue combined but smaller profit margins (and might eat into each other's demographic markets), you spend $300 million (if not less) on a single "mega game" combining the best of both that work well within the TLOU universe, possibly have somewhat smaller revenue but you also have much higher profit margins on the game? And if that would lead to an even better experience for the customer, then that sounds like a win.
Plus, the money saved by reducing those two similar titles to just the one, might allow for a decent number of more unique AA-type games that can be developed more quickly, more cheaply, and also generate strong profit margins.
3: Cut this back, but in moderation. If you're reducing redundancies the way mentioned in (2), then there's no reason to cut back on celebrity casting when you're doing that for a smaller number of such games in general. Again, SIE need those big blockbuster AAA story-driven experiences, and those kind of games need a lot of professionalism for purpose of immersion. But if you eliminate project redundancies, you can pour more into the fewer such games you produce, and that's a case where "quality over quantity" can make sense.
4: Well SIE are already taking a gamble on GaaS and looking at Helldivers 2 it's already paying off very well. What they don't need is 10-12 GaaS titles in a small timeframe, nor do they need like 6 sci-fi military shooters (again, that becomes a redundancy problem where you might have too much demographic crossover and cannibalization with your own titles for audiences).
Have your Helldivers 2, but do Bungie for example need a Destiny AND a Marathon? AND "Project Gummy Bears"? Maybe ideas from two of those could fold into, say, Marathon instead. Do you need Deviation Game's GaaS to be a sci-fi military shooter when you already have a hit in Helldivers 2? Maybe the genre for their game should change, or maybe they can do that and also provide content support for Helldivers 2.
Identify that type of stuff sooner vs. later.
5: No complaints here; Sony need to be stronger in markets like Japan. Nintendo doesn't compete with them in the same ways Microsoft does, but they ARE a competitor, and that has to always be taken into account. A new handheld/portable companion device to the main console would be a great start, but ultimately Sony also need a better range of 1P software that can cater to the tastes of markets like Japan.
They have the IP which could be solid jumping-off points for it, like Astrobot, but they need the games for it as well. And preferably, things that lend themselves well for transmedia efforts (in this case stuff like card games, toys/merchandise, anime/manga, clothing, etc.)
6: This is a complete no-go aside from most GaaS, most Remasters, some Remakes and some AA-tier games. I'm amazed this poster has so many other good points but them almost completely undermines them with this.
The console needs an identity, and exclusives help with that identity. Go ask Nintendo, it's been working out great for them. Day 1 PC for things aside what I just mentioned is not a fix, it's a stop-gap, and will only delay an inevitable decline in PlayStation hardware and, potentially, software. Day 1 across the board, means higher upfront costs for multiple builds and optimization efforts, and also means less releases for console buyers because each additional platform adds time to the game's development.
It will also potentially result in lowered scope and ambition of the type of games that NEED to impress hardcore and core enthusiasts, because the specific performance profile of the consoles won't be 100% tapped because profiles of other devices such as the range of PCs suddenly need to be taken into consideration. And since the market of gaming PCs with specs equivalent to the console never actually makes up the majority of such PC players (most PC gamers are running setups weaker than a given current-gen console, at least one that isn't a Series S or Switch), that constrains what configs Sony can realistically focus on with simultaneous console/PC development.
Those negatives, not to mention declines in hardware and software revenue on console (software also meaning, sub services, add-on sales etc.), shows the tradeoffs for Day 1 of all games is simply not worth it. If you want another example of why they aren't worth it...well just look at the Xbox consoles today in their market performance.
7: Somewhat agree, but again, in moderation. If they're reducing redundancies in games with largely similar demographic targets in terms of their genre and style templates, then an expensive license might become worth it after all.
8: Already touched on this earlier; people exaggerate the lack of Sony having such games, but overall, yes I would love to see them pursue more in this area. Take pages from companies like SEGA in this regard, but still bring that SIE level of polish and ambition.
Haint
Member
Yes I'm referring to Playstation, which has an outsized effect on Sony as a whole. They're going to wind up missing their sales target by like 5+ million units, which I said is a result of a lack of consumer interest due to there being no compelling future software roadmap to encourage the masses to drop $500 on a product. To which you replied "NUH-UH, weak Yen". Again, the sales targets were made in the first quarter and were not predicated on a price drop, that is a correction mechanism to offset waning consumer interest.
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tmlDan
Member
Why are you gaslighting me, did you even read what i wrote. Whats wrong with you?
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Agree. IMO, it's why they made PS Portal, PSVR2, and are making games like Helldivers 2 to mix it all up. And they've added Game Streaming directly from the PS5 late last year, so we know what's coming next.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Or maybe it was because they estimation was too high and stupid in the first place? Especially if they knew they weren't going to drop the price of the PS5DE to $299 and the PS5 to $399.
Mattyp
Gold Member
Not really that's standard growth for majority of stock over a decade period, it should be studied how a company with so much mindshare and market ownership at the time still hasn't reached the price it was two decades ago.
thicc_girls_are_teh_best
Member
They came up a bit short on units sold, that's not "massively missing sales targets". Reserve that type of talk for Xbox.
They've already done 21+ million this FY so far, and that's at the time of the last update. Over a whole month to go. They will likely end up around 23 - 23.5 million for their FY, which isn't that far off from the (unrealistically high) 25 million target.
Braag
Member
Helldivers 2 was a complete accident and not some master mind move by Sony. Same goes for Palworld and Xbox. But honestly I don't care all that much if some multi billion corp loses some money, everyone in this thread has just uneducated guesses, like me. We don't know what numbers they're actually looking at and what their end goals are. Only one thing is certain, shareholders want to see bigger numbers after each fiscal year.
thicc_girls_are_teh_best
Member
Sony actually funded and aided in development for Helldivers 2 from start to finish.
Microsoft had zero involvement in Palworld's development, they just gave a bag for Game Pass.
Complete opposites. Even if yes, Sony didn't know the full extent Helldivers 2's popularity would be once it released. But they always knew they had a high-quality game on their hands, because they were involved in its development. Same cannot be said with Microsoft and Palworld.
thicc_girls_are_teh_best
Member
Might deserve its own thread:
Kind of an important thing to clarify, Sony. IJS. Would've saved a lot in terms of the doom-and-gloom discussion that has been getting pushed online the past few days
Kind of an important thing to clarify, Sony. IJS. Would've saved a lot in terms of the doom-and-gloom discussion that has been getting pushed online the past few days
ChorizoPicozo
Member
it's fine. "let them dream"Might deserve its own thread:
Kind of an important thing to clarify, Sony. IJS. Would've saved a lot in terms of the doom-and-gloom discussion that has been getting pushed online the past few days
kazuyamishima
Member
The thing is, it has been quoted and put by other people around the internet including gaming forums, Twitter, FB, and more.Might deserve its own thread:
Kind of an important thing to clarify, Sony. IJS. Would've saved a lot in terms of the doom-and-gloom discussion that has been getting pushed online the past few days
Even with that, we're still seeing #SonyToo and #SonyisDoomed stuff
Dr. Wilkinson
Member
I’m still patiently waiting for a true PS5 Slim. I’m very patient. I can literally wait years.
Dr. Wilkinson
Member
Honestly for people interested or working in business, this is mildly interesting. But for the vast majority of us… who cares about Sony’s holiday margin? Like honestly who cares. Just enjoy the games let them worry about the business
BobLeeSwagger
Banned
Bad times for the industry…
Companies really should find ways to cut down development time. Why keep pushing for high fidelity/detailed games if they take so damn long to make? Can’t keep investing several millions into them if you’re not seeing it pay off, if at all, for half a decade.
Companies really should find ways to cut down development time. Why keep pushing for high fidelity/detailed games if they take so damn long to make? Can’t keep investing several millions into them if you’re not seeing it pay off, if at all, for half a decade.
AeonGaidenRaiden
Member
Lol where did you pull out that false fact. Even SONY themselves said portal isnt designed to make profit nor is it planing it will happen in the future. Just because it was sold out in the first week doesnt mean they made millions of copies. Its a limited manufacturing product for a select few that want to extend their PS5 experience. Its not at profit its at a heavt LOSS.
Bulletbrain
Member
From the transcript it seems that they only expect a slight margin uplift despite the lower acquisition-related costs.Might deserve its own thread:
Kind of an important thing to clarify, Sony. IJS. Would've saved a lot in terms of the doom-and-gloom discussion that has been getting pushed online the past few days
"Although the burden of acquisition-related costs will ease next fiscal year, we expect profit from first-party software to decrease slightly from this fiscal year due to the impact of the decrease in sales. Based on this, operating income for next fiscal year is currently expected to increase slightly from this fiscal year. However, while this is our base-line, we are reviewing measures for further improvement in profitability in advance of the annual financial results announcement this May."
Edit: Another piece of information that illustrates the margin concerns. Expected ROIC for FY23 drops nearly 4ppt YoY to 12.5%.
Edit 2: Went back and checked actual ROIC for past years. FY19 (pre-covid) ROIC was 35.9%. FY20 and FY21 was over 40.0%, likely from the covid tailwind. FY22 16.4%. Clear indication how increased spending is not yielding expected returns.
Edit 3: Added a chart to illustrate returns vs spending.
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StreetsofBeige
Gold Member
Unless it can be proven with sales data showing how many units were sold leading to out of stock situations, vague sold out notes mean absolutely nothing.
The number of skus (stock keep unit for you non-business people) I've seen at all the companies I've worked at must total in the 1000s. Just because something is out of stock (even at launch) doesn't mean it sold a gazillion units.
One of the biggest blunders was at one of my old companies. Demand exceed supply so it was out of stock. And it wouldnt be in stock with a lot more since it was made in China (container ships constantly coming in still took like 6 weeks to get to our warehouse if you factor in the travel, dock/port and shipping).
It was an item that retailed for $50-60 and the initial batch ordered by inventory manager was like 5000 units. Thats it. But if the team gave her a better forecast to order product and she did an initial batch of lets say 10000 she probably would had been fine and had enough stock to float after the initial are sold in. A vague story would make it look like the 10000 situation looks like overstock because the sku isn't selling, but in reality it would had sold more units vs. the gimped 5000 reality.
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Braag
Member
Yeah, it's all about Sony's involvement, not Arrowhead's talent.
Also they barely marketed the game and their max server capacity was laughably low, so I doubt Sony had ALL that much faith in the game.
TheRedRiders
Member
It's more concerning because they haven't. All we're seeing on PS5 titles as of now is PS4 engines with high settings and framerates.
Quick corrrection that Steam splits drops to 20% after revenue exceeds $50mln, and big Sony first party titles should hit that.
Also, there are costs associated with physical retail sales - manufacturing costs of disks and labels, logistics of shipping and retail store cuts. Whereas Steam sales are 100% digital with no added manufacturing and logistics costs.
As long as prices are kept stable with no large price cuts on PC, claiming sales there brings them ‘peanuts’ is absurd