Will Stringer -ever- shut his mouth?

[Elandyll]

I swear, the guy is a walking PR catastrophe, for the PS3, and Sony's stock in general.

His latest interview:

"Wii's business model is superior to our own"

"The PS3 will not recoup its losses in my lifetime" (after Sony had said a few months aggo that we were reaching equilibrium/ profits and more recently thatthe PS3 has a 10 year life cycle).

http://www.mcvuk.com/news/31607/Stri...ferior-to-Wiis

His naivete is somewhat touching, but the guy is a rickin nightmare for Sony's PR image. At his level you might think that he'd know that all evidences and truths are not always good to say, specially to journalists. As per the "not in my lifetime", it is way to clear cut for a product (PS3) that will only likely bloom at end of 2008/ 2009.

[scweb13]

Isn't the PS3 still selling at a loss? I know MaxPower said that the current cost to produce a PS3 is about $375. That is below retail but what is the wholesale cost?

[allstar780]

375 is below retail? last I checked the PS3 retail price is 399?

[jadedeath]

Originally Posted by allstar780

375 is below retail? last I checked the PS3 retail price is 399?

That would make 375 below 399... wouldn't it?

Logan

[dialog_gvf]

Originally Posted by Elandyll

I swear, the guy is a walking PR catastrophe, for the PS3, and Sony's stock in general.

His latest interview:

"Wii's business model is superior to our own"

"The PS3 will not recoup its losses in my lifetime" (after Sony had said a few months aggo that we were reaching equilibrium/ profits and more recently thatthe PS3 has a 10 year life cycle).

http://www.mcvuk.com/news/31607/Stri...ferior-to-Wiis

His naivete is somewhat touching, but the guy is a rickin nightmare for Sony's PR image. At his level you might think that he'd know that all evidences and truths are not always good to say, specially to journalists. As per the "not in my lifetime", it is way to clear cut for a product (PS3) that will only likely bloom at end of 2008/ 2009.

Sony CEO Howard Stringer has admitted that PS3 hardware sales aren’t ever likely to recoup the $3.3 billion losses the machine has already occurred.

"When asked if PS3 could make back the money it had lost, Stringer added:"

"Not for as long as I live. It will certainly take some time. The traditional business model for the PlayStation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even.

"In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.”

That seems to be saying that the losses can never be recouped through hardware sales alone. The games need to be sold to make it up.

This isn't exactly a news flash. The Playstation franchise probably never broke even on hardware alone. It's a loss leader model.

Gary

P.S. Besides, exactly when is the Xbox going to recoup the $8 billion deficit it has sustained?

[JTK]

Originally Posted by Elandyll

I swear, the guy is a walking PR catastrophe, for the PS3, and Sony's stock in general.

His latest interview:

"Wii's business model is superior to our own"

"The PS3 will not recoup its losses in my lifetime" (after Sony had said a few months aggo that we were reaching equilibrium/ profits and more recently thatthe PS3 has a 10 year life cycle).

http://www.mcvuk.com/news/31607/Stri...ferior-to-Wiis

His naivete is somewhat touching, but the guy is a rickin nightmare for Sony's PR image. At his level you might think that he'd know that all evidences and truths are not always good to say, specially to journalists. As per the "not in my lifetime", it is way to clear cut for a product (PS3) that will only likely bloom at end of 2008/ 2009.

Stringer is a master of the feint and understatement,to say the least.

This is the same Stringer that was out there in October and November of last year talking about format war stalemates and such while clearly the Warner deal that culimated in January was well underway behind closed doors. First week of January it was all over.

Think about it.

And he's right: The Wii is kicking Sony and MS's butts sales wise. Nintendo is the only company NOT stuck in that old model of: "Sell hardware at a loss and hope to make up loss on software sales" which, on its face, is not a good business model at all.

Nintendo has been making money hand over fist on both hardware and software from day one.

[dialog_gvf]

Originally Posted by JTK

And he's right: The Wii is kicking Sony and MS's butts.

That goes without saying. From a pure business perspective, clearly Nintendo has it right this generation. They are raking in the cash.

Different market though. The PS/3 and Xbox are aimed at hardcore, while the Wii is for children/casual gamers.

Ultimately, I think, a repurposing of the PS/3 will occur when the next gen happens. The PS/3 will become the Wii of the next gen.

Gary

[Wingman1977]

Originally Posted by dialog_gvf

"When asked if PS3 could make back the money it had lost, Stringer added:"



That seems to be saying that the losses can never be recouped through hardware sales alone. The games need to be sold to make it up.

This isn't exactly a news flash. The Playstation franchise probably never broke even on hardware alone. It's a loss leader model.

Gary

P.S. Besides, exactly when is the Xbox going to recoup the $8 billion deficit it has sustained?

Well the 360 has turned a profilt for MS (something the original xbox never did).

[allstar780]

Originally Posted by jadedeath

That would make 375 below 399... wouldn't it?

Logan

I wrote that wrong... he said they cost 375 to make and they sell at a loss... but retail is 399 or 499 for the 80gb... so i didnt get how it would be selling at a loss, unless sony is wholesaling them for like 300 so the retailers can turn a profit?

[Maximus]

Originally Posted by scweb13

Isn't the PS3 still selling at a loss? I know MaxPower said that the current cost to produce a PS3 is about $375. That is below retail but what is the wholesale cost?

See bolded, I said I wasn't allowed to give out the real numbers, and I didn't. Sony are still strategically pricing the PS3 at below cost.

I didn't factor in the price of a DS3 controller, and retail margin. I would estimate that Sony sell the box to retailers at about $370, and to produce it would cost more.

Also remember that I said the 40GB was sold at ~ $100 loss, and the 80GB MGS edition at a similar loss, so while I would say that the loss has got lower they are not that close to wiping it out yet. I would estimate about a year before Sony can safely say they have some sort of margin on hardware.

[Maximus]

Originally Posted by Wingman1977

Well the 360 has turned a profilt for MS (something the original xbox never did).

No it hasn't. The Xbox 360 still loses a considerable amount of money at its current price points. The only box that sells at a profit is the Elite.

[JTK]

Originally Posted by dialog_gvf

That goes without saying. From a pure business perspective, clearly Nintendo has it right this generation. They are raking in the cash.

Different market though. The PS/3 and Xbox are aimed at hardcore, while the Wii is for children/casual gamers.

Ultimately, I think, a repurposing of the PS/3 will occur when the next gen happens. The PS/3 will become the Wii of the next gen.

Gary

Agreed.

[Maximus]

Originally Posted by JTK

Stringer is a master of the feint and understatement,to say the least.

Indeed. All British people are, especially ones with to do with the Empire...

This is the same Stringer that was out there in October and November of last year talking about format war stalemates and such while clearly the Warner deal that culimated in January was well underway behind closed doors. First week of January it was all over.

Think about it.

He's not stupid, people need to re-read the article about his role in bringing Sony together during the format war and what he did for Blu-ray.

And he's right: The Wii is kicking Sony and MS's butts sales wise. Nintendo is the only company NOT stuck in that old model of: "Sell hardware at a loss and hope to make up loss on software sales" which, on its face, is not a good business model at all.

Nintendo has been making money hand over fist on both hardware and software from day one.

He usually is right when it comes to strategy and planning, I've never known him to be too far off the mark, neither was Kutaragi-San.

Last time his 'stalemate' publicity was aimed at the studios. This time around it is aimed at a different set of people, namely the third parties, and the message is clear. Sony are back, and they are going to be around for a long time.

The reason Sir Howard has said that Sony are unlikely to ever see any profits on PS3 hardware is simple, it will from now on only ever make a small amount of money until they cut the price. He may have said the Wii is not competition, but don't think for a second that anyone in SCE thinks this is actually the case, they know ~90m PS2 users haven't made the jump to a 7th gen console. This is a very important factor, and Sony need to think hard about what to do to attract these people back, and maybe last time it was SingStar, or GT. This time it could be LittleBigPlanet, or EyePet, or even Killzone 2, but they need to expand the audience big time beyond the current shooter heavy line-up they have. Read Shuhei Yoshida's latest interview and you will get the idea...

[quexos]

I just hope these setbacks won't stop Sony from continuing the power race in the next generation as Beautiful fluid 3D rendrings are something I do enjoy too.

[jadedeath]

Originally Posted by allstar780

I wrote that wrong... he said they cost 375 to make and they sell at a loss... but retail is 399 or 499 for the 80gb... so i didnt get how it would be selling at a loss, unless sony is wholesaling them for like 300 so the retailers can turn a profit?

375 to make, then there's the shipping costs, and 'to make' isn't exactly clear, is it 375 just for the parts, or for the parts and labor?

Apparently they sell them to companies for sale with very little markup between the sale from Sony to the retailer, like Sony {and Microsoft etc.} they make more money on game sales than they do system sales.

Logan

[Clark Kent]

Stringer is purposely trying to lower analyst expectations for Sony going forward in the next quarter or two. These statements have been planned and executed according to a specific strategy. Stringer knows what he is doing...

[dialog_gvf]

Originally Posted by Wingman1977

Well the 360 has turned a profilt for MS (something the original xbox never did).

The quarter last year that had the release of Halo 2, I believe, was the only time the EDD had a quarterly profit.

They are currently predicting sustained profitability for the division for this fiscal year (FY2009).

(21% increase in headcount expenses YOY?!)

Gary

[joeorc]

Originally Posted by Wingman1977

Well the 360 has turned a profilt for MS (something the original xbox never did).

YES THATS SAYING SOMETHING since

A: THE PRODUCTION COSTS TO BUILD A XBOX360 is way lower than to build a PLAYSTATION 3..."just look at the heatsinks of both systems and you would see what i mean"

B: the claim to make a profit is undershadowed by the fact that the DIV. that the xbox is counted in the biz. of Microsoft would not by it self IF it ever could, would be able to recoup the loss by hardware sales alone the same as SONY with the playstation 3, Only worse that "Consumer entertainment div." at Microsoft has lost over 20 billion..it will take years upon years upon years to make that back even with all the sub div. in that part of Microsoft.