6 million in the Supply chain - Blu-ray Forum

joeorc · 04-17-2007, 05:58 AM

Sony PS3 price cut expected. Sony has mountain of unsold consoles in supply chain.By John Mace - Fri, 04/13/2007 - 07:36.

* Asia
* Technology

Skeptical analysts are still predicting a price cut for the PlayStation 3 this year, even though Sony may be about to reveal encouraging profit forecasts, according to reports from Japan today. Japan's Nikkei newspaper today claimed that Sony is expecting to improve operating profits to $3.35 billion this financial year – the paper did not identify the source of its information.

“We think Sony will find it hard to get through the financial year (which began this month) without cutting the price of the console, and expect further game segment losses of over $1 billion during that period”, commented researchers from leading Japanese investment firm, Nomura, in a private briefing to clients this morning.

PS3 mountainDespite the $1 billion in losses expected this year, and the $2.5 billion reported last year, Nomura's researchers do expect PS3 losses to end in later years, but are uncertain when.

Sony has sold only half of the six million PS3s it has manufactured to date, Nomura estimates. Other sources estimate the number of units shipped out of Sony's factories somewhat lower, at five million, but concur on the sales data.

Sony is expected to increase PS3 shipments to 10 million this financial year, although, as last year's numbers indicate, shipments are far from being an accurate indicator of sales figures.

"In the six months the PS3s was on sale up to March 31 (though for only one month in Europe) it sold 3mn units. To boost that substantially in the fiscal year (which began this month) without lowering prices would in our view need major software hits. We do not see the necessary drawing power in the title pipeline at this point." predicted Nomura analyst Eiichi Katayama. "We expect Sony to take measures to increase market penetration of PS3 hardware, including extending the software lineup, and expect to review our medium-term estimates for the game segment if and when such measures come into view."

Sony claims that it does not plan to reduce the PS3's price for at least two years, according to statements a spokeswoman made to Dow Jones Newswires in February. The company emphasizes that the product is 'a complete package', freeing users from the need to buy add ons.

Nomura is also skeptical about the encouraging profit predictions reported by Nikkei, because of the 10 million PS3's to be shipped, 3 million will actually come from last year's stockpile of already manufactured machines.

If correct, this will have a significant impact on revenues at Sony's semiconductor division, which makes chips for the console, because chip sales for 3 million of this year's PS3 shipments have already been included in last year's revenue figures at the semiconductor division. Nomura estimates the shortfall in chip division sales from this factor at around $170m.

Nikkei's report predicts a huge leap in operating profits for Sony, up to $3.35 billion from $500 million last year. However, Nomura not only casts doubt on the PS3 chip revenues, but also points out that $420 million of this profit increase is attributable to the end of Sony's payouts for exploding laptop PC batteries, and another $250 million to restructuring costs last year.

Nomura's analysts agree that Sony's profits this year will be considerably better than last year, but predict a lower figure of $2.1 billion, due to the PS3 sales and chip revenue issues.

“We think losses in the game segment are temporary and expect its earnings to improve,” Nomura's analysts added. “That said, we think the extent of profit growth in the segment will hinge on how well the PlayStation3 sells at the expected price and the launch of titles for it.”

Note: The Japanese 2008 financial year began April 1, 2007 and will end on March 31, 2008.

April 13: Updated with further comments from Nomura's analysts and Sony comment on price cut

http://texyt.com/Sony+PS3+price+cut+expected+058

selling over half your supply chain in under 6 months..pretty good if i say so my self..

some people are not going to be happy about this....

Jack Torrance · 04-17-2007, 06:06 AM

Quote:

Originally Posted by joeorc

selling over half your supply chain in under 6 months..pretty good if i say so my self..

some people are not going to be happy about this....

Well I think it's pretty good... and these sales numbers are well ahead of where the 360 was at this point, but to a lot of people out there, it's still a failure

joeorc · 04-17-2007, 06:28 AM

Quote:

Originally Posted by Jack Torrance

Well I think it's pretty good... and these sales numbers are well ahead of where the 360 was at this point, but to a lot of people out there, it's still a failure

if sony does what i think they will do ..that is lower the 60 GB to $500.00
THEY MAY JUST DO IT TO PUT PRESSURE ON THE xbox360 "elite" i think Microsoft is playing into the strengths of SONY right now..an it defently not going to be pretty come this FALL..an while the Wii WILL still be a great system to OWN that system is in a market all its own..I THINK nintendo IS BEING SMART..BY STAYING OUT OF THIS HD market they do not have to worry about the headaches but also they are not getting any of the advantages also..

so its all good...

Nismobeach · 04-17-2007, 07:10 AM

IMO it would be a mistake for Sony to keep the price of the PS3 at $600 for two years. I would cut the price down to $479-$499 and let it compete with the Elite directly. It would show the value in the unit and move enough product to offset the price cut.

joeorc · 04-17-2007, 07:50 AM

Quote:

Originally Posted by Nismobeach

IMO it would be a mistake for Sony to keep the price of the PS3 at $600 for two years. I would cut the price down to $479-$499 and let it compete with the Elite directly. It would show the value in the unit and move enough product to offset the price cut.

agreed an i think that is exactly what will happen after the xbox360 "elite" gets released....

Deciazulado · 04-17-2007, 07:54 AM

*Deci brings out a special technologically advanced version of his decicalculator, perfected through billions of man-hours by the Architect.

his fingers

March . One.
February. Two.
January. Three.
December. Four
half of November. Four and a half.

Quote:

"In the six months the PS3s was on sale up to March 31 (though for only one month in Europe) it sold 3mn units.

Unkn0wn47 · 04-17-2007, 08:03 AM

It would be too early to stop dropping prices of the PS3; especially when revenue for Sony is crucial. By keeping the price as it is; the company is convincing people that it is worth the money, which to me it is. From a marketing standpoint and from a consumer behavior standpoint, by dropping the price on the PS3, Sony will only suffer because of what people will think about the Price/Value of the system. Like stated above, it is more thain certain that the PS3 price will stay the same at least until the end of the year, which is when it is very likely that it will go through all of their 6M stock and probably well into 8M range by the time the holidays come around. Then, and only then, after the initial investment has been returned, they might think about lowering price, because right now it would just hurt Sony in the minds of the consumer. The "Elite" will sell for less because it is much less of a package and even your average consumer can understand that.

What'sHD · 04-17-2007, 08:54 AM

Agree, Sony should stick with the 600 price point until perhaps the 10M mark. Then, drop the price to take sales to the next level.

I am assuming here that certain awesome games will help SCEI reach the 10M no. within this calendar year.

If 3M consoles can sell in 4.5 months (go fingers!) at 590 bucks average (1:9 sales ratio for 20:60) with just a smattering of games (mostly 720p), SCEI should wait until After several killer titles (inclu. some 1080p ones) have been out for a while and shifted mountains of PS3s

Huah!

mmmhome · 04-17-2007, 11:13 AM

dont forget

selled menas for sony salled to a reseller not to a customer

The Don · 04-17-2007, 11:37 AM

Quote:

Originally Posted by joeorc

if sony does what i think they will do ..that is lower the 60 GB to $500.00
THEY MAY JUST DO IT TO PUT PRESSURE ON THE xbox360 "elite" i think Microsoft is playing into the strengths of SONY right now..an it defently not going to be pretty come this FALL..an while the Wii WILL still be a great system to OWN that system is in a market all its own..I THINK nintendo IS BEING SMART..BY STAYING OUT OF THIS HD market they do not have to worry about the headaches but also they are not getting any of the advantages also..

so its all good...

Nintendo came out looking clean by default...

they have the much cheaper system with a new gimmick....even though it's a good gimmick...

I don't even count them in the war between Sony and Microsoft...it's a different war...

joeorc · 04-17-2007, 11:53 AM

Quote:

Originally Posted by Deciazulado

*Deci brings out a special technologically advanced version of his decicalculator, perfected through billions of man-hours by the Architect.

his fingers

March . One.
February. Two.
January. Three.
December. Four
half of November. Four and a half.

look at the recent interview with PHIL h. for the launch of the playstation 3 in the UK..Q: FROM PHIL

"We've kept some back in order to continue to supply the market. It's been a tremendous success and something that we are very pleased about."

http://www.computerandvideogames.com....php?id=160904

NOTICE THEY STILL COUNT ONLY 3 MILLION SOLD THERE IS A REASON SONY ONLY COUNTS WHAT IS SOLD TO THE CONSUMER..NOT TO THE RETAILER

MatrixS2000 · 04-17-2007, 12:13 PM

Quote:

Originally Posted by Deciazulado

*Deci brings out a special technologically advanced version of his decicalculator, perfected through billions of man-hours by the Architect.

his fingers

March . One.
February. Two.
January. Three.
December. Four
half of November. Four and a half.

Hey - where did you get the half finger? You playing with power tools again?

Camulus · 04-17-2007, 12:34 PM

I agree that Sony should keep the price where it is at. With all the awesome titles they have coming out as well BD movies with Spider-Man 3 coming to BD in November. PS3 sales will spike this fall and remain high until after the holiday season. Then drop it by 100 bucks in the new year

Deciazulado · 04-17-2007, 12:51 PM

Quote:

Originally Posted by MatrixS2000

Hey - where did you get the half finger? You playing with power tools again?

Ask my father in law. He cut it with a chainsaw and sewed it back.

Shin-Ra · 04-17-2007, 01:23 PM

The Euro PS3 would have been out for 9 days, not a month, also.

JTK · 04-17-2007, 04:12 PM

I see talk on the game sites about Sony possibly prepping an 80 gig PS3.

Personally, I think that's a waste of time. What they should do is go for a matching 120gb and make that system cost $599 MSRP.

Why? Because we all know MS is woefully overcharging for the price of the 120GB harddrive on the Elite.

You can easily find 500GB hard drives for PC's that cost what MS is charging for their 120 giger on the Elite.

My point? Sony can afford to be a little more aggressive in pricing by simply not ripping off consumers like MS is. Charge $599 for a 120 gig PS3 and charge $499 or so for the current 60 giger.

The other thing they could possibly do is make it easy and open the floodgates where anyone can add any kind of SATA hard drive for a PC to the PS3 and be off to the races. If someone wants to spend the money and put a 500 or more gig hard drive on the PS3? More power to 'em.

ps3andlovinit · 04-17-2007, 05:22 PM

Quote:

Originally Posted by JTK

The other thing they could possibly do is make it easy and open the floodgates where anyone can add any kind of SATA hard drive for a PC to the PS3 and be off to the races. If someone wants to spend the money and put a 500 or more gig hard drive on the PS3? More power to 'em.

160 GB is the largest 2.5 laptop drive. Someone makes a 200gb but its' not a standard form factor and likely won't fit.

JTK · 04-17-2007, 05:39 PM

Quote:

Originally Posted by ps3andlovinit

160 GB is the largest 2.5 laptop drive. Someone makes a 200gb but its' not a standard form factor and likely won't fit.

Thanks for the info.

Gamekid · 04-17-2007, 09:23 PM

I agree with everyone here that sony should not cut the price for the ps3 just yet. We need blockbuster games to come out and with lair coming out, that should convince people to get a ps3. Other games like burnout 5 and GTA IV would convince people to buy a ps3. I think that the price tag justifies the console because for two reasons: 1) Unless you cover up the vents on the ps3, it's nearly impossible for the console to break. Can't say the same thing about the xbox 360. If you spend $600.00 on a console, you don't want it to break on you. 2) You get a freebie blu-ray player which you would have to pay extra for and having it included in the ps3 is a steal. I think that sony should just scrap the 20 GB because no one wants it anyway and hold off on the 80 GB until later. I think that sony should hold off on the 80 GB until later because the last thing you want to do is have the customer get the 60 GB and then 5 months later get a newer console with an 80 GB. Nintendo waited quite a while before introducing the ds lite and I think that sony should do the same. Starting on the 24th of april this year, fear comes out for the ps3 and from there more games come out until the end of this year.

Nismobeach · 04-17-2007, 09:27 PM

Quote:

Originally Posted by ps3andlovinit

160 GB is the largest 2.5 laptop drive. Someone makes a 200gb but its' not a standard form factor and likely won't fit.

Negative. Fujitsu has a 2.5 laptop drive with a 300GB capacity.

http://www.engadget.com/2006/12/11/f...-mobile-drive/

04-17-2007, 05:58 AM	#1
joeorc Power Member Member since:Jan 2007 Location:GROVEPORT ,OHIO	6 million in the Supply chain Sony PS3 price cut expected. Sony has mountain of unsold consoles in supply chain.By John Mace - Fri, 04/13/2007 - 07:36. * Asia * Technology Skeptical analysts are still predicting a price cut for the PlayStation 3 this year, even though Sony may be about to reveal encouraging profit forecasts, according to reports from Japan today. Japan's Nikkei newspaper today claimed that Sony is expecting to improve operating profits to $3.35 billion this financial year – the paper did not identify the source of its information. “We think Sony will find it hard to get through the financial year (which began this month) without cutting the price of the console, and expect further game segment losses of over $1 billion during that period”, commented researchers from leading Japanese investment firm, Nomura, in a private briefing to clients this morning. PS3 mountainDespite the $1 billion in losses expected this year, and the $2.5 billion reported last year, Nomura's researchers do expect PS3 losses to end in later years, but are uncertain when. Sony has sold only half of the six million PS3s it has manufactured to date, Nomura estimates. Other sources estimate the number of units shipped out of Sony's factories somewhat lower, at five million, but concur on the sales data. Sony is expected to increase PS3 shipments to 10 million this financial year, although, as last year's numbers indicate, shipments are far from being an accurate indicator of sales figures. "In the six months the PS3s was on sale up to March 31 (though for only one month in Europe) it sold 3mn units. To boost that substantially in the fiscal year (which began this month) without lowering prices would in our view need major software hits. We do not see the necessary drawing power in the title pipeline at this point." predicted Nomura analyst Eiichi Katayama. "We expect Sony to take measures to increase market penetration of PS3 hardware, including extending the software lineup, and expect to review our medium-term estimates for the game segment if and when such measures come into view." Sony claims that it does not plan to reduce the PS3's price for at least two years, according to statements a spokeswoman made to Dow Jones Newswires in February. The company emphasizes that the product is 'a complete package', freeing users from the need to buy add ons. Nomura is also skeptical about the encouraging profit predictions reported by Nikkei, because of the 10 million PS3's to be shipped, 3 million will actually come from last year's stockpile of already manufactured machines. If correct, this will have a significant impact on revenues at Sony's semiconductor division, which makes chips for the console, because chip sales for 3 million of this year's PS3 shipments have already been included in last year's revenue figures at the semiconductor division. Nomura estimates the shortfall in chip division sales from this factor at around $170m. Nikkei's report predicts a huge leap in operating profits for Sony, up to $3.35 billion from $500 million last year. However, Nomura not only casts doubt on the PS3 chip revenues, but also points out that $420 million of this profit increase is attributable to the end of Sony's payouts for exploding laptop PC batteries, and another $250 million to restructuring costs last year. Nomura's analysts agree that Sony's profits this year will be considerably better than last year, but predict a lower figure of $2.1 billion, due to the PS3 sales and chip revenue issues. “We think losses in the game segment are temporary and expect its earnings to improve,” Nomura's analysts added. “That said, we think the extent of profit growth in the segment will hinge on how well the PlayStation3 sells at the expected price and the launch of titles for it.” Note: The Japanese 2008 financial year began April 1, 2007 and will end on March 31, 2008. April 13: Updated with further comments from Nomura's analysts and Sony comment on price cut http://texyt.com/Sony+PS3+price+cut+expected+058 selling over half your supply chain in under 6 months..pretty good if i say so my self.. some people are not going to be happy about this....

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04-17-2007, 07:10 AM	#4
Nismobeach Senior Member Member since:Dec 2006	IMO it would be a mistake for Sony to keep the price of the PS3 at $600 for two years. I would cut the price down to $479-$499 and let it compete with the Elite directly. It would show the value in the unit and move enough product to offset the price cut.

04-17-2007, 08:03 AM	#7
Unkn0wn47 Active Member Member since:Mar 2007 Location:Denver, CO Blu-ray reviews:5	It would be too early to stop dropping prices of the PS3; especially when revenue for Sony is crucial. By keeping the price as it is; the company is convincing people that it is worth the money, which to me it is. From a marketing standpoint and from a consumer behavior standpoint, by dropping the price on the PS3, Sony will only suffer because of what people will think about the Price/Value of the system. Like stated above, it is more thain certain that the PS3 price will stay the same at least until the end of the year, which is when it is very likely that it will go through all of their 6M stock and probably well into 8M range by the time the holidays come around. Then, and only then, after the initial investment has been returned, they might think about lowering price, because right now it would just hurt Sony in the minds of the consumer. The "Elite" will sell for less because it is much less of a package and even your average consumer can understand that.

04-17-2007, 08:54 AM	#8
What'sHD Senior Member Member since:Feb 2007	Agree, Sony should stick with the 600 price point until perhaps the 10M mark. Then, drop the price to take sales to the next level. I am assuming here that certain awesome games will help SCEI reach the 10M no. within this calendar year. If 3M consoles can sell in 4.5 months (go fingers!) at 590 bucks average (1:9 sales ratio for 20:60) with just a smattering of games (mostly 720p), SCEI should wait until After several killer titles (inclu. some 1080p ones) have been out for a while and shifted mountains of PS3s Huah!

04-17-2007, 11:13 AM	#9
mmmhome Active Member Member since:Oct 2003 Location:Germany	dont forget selled menas for sony salled to a reseller not to a customer

04-17-2007, 12:34 PM	#13
Camulus Active Member Member since:Mar 2007 Location:Canada Blu-ray collection:31 Trading Score:12	I agree that Sony should keep the price where it is at. With all the awesome titles they have coming out as well BD movies with Spider-Man 3 coming to BD in November. PS3 sales will spike this fall and remain high until after the holiday season. Then drop it by 100 bucks in the new year

04-17-2007, 01:23 PM	#15
Shin-Ra Super Moderator Top contributor Member since:Feb 2007 Blu-ray collection:5 Trading Score:1	The Euro PS3 would have been out for 9 days, not a month, also.

04-17-2007, 04:12 PM	#16
JTK Blu-ray Knight Member since:Jan 2006 Location:www.blurayoasis.com	I see talk on the game sites about Sony possibly prepping an 80 gig PS3. Personally, I think that's a waste of time. What they should do is go for a matching 120gb and make that system cost $599 MSRP. Why? Because we all know MS is woefully overcharging for the price of the 120GB harddrive on the Elite. You can easily find 500GB hard drives for PC's that cost what MS is charging for their 120 giger on the Elite. My point? Sony can afford to be a little more aggressive in pricing by simply not ripping off consumers like MS is. Charge $599 for a 120 gig PS3 and charge $499 or so for the current 60 giger. The other thing they could possibly do is make it easy and open the floodgates where anyone can add any kind of SATA hard drive for a PC to the PS3 and be off to the races. If someone wants to spend the money and put a 500 or more gig hard drive on the PS3? More power to 'em.

04-17-2007, 09:23 PM	#19
Gamekid Power Member Member since:Feb 2006	I agree with everyone here that sony should not cut the price for the ps3 just yet. We need blockbuster games to come out and with lair coming out, that should convince people to get a ps3. Other games like burnout 5 and GTA IV would convince people to buy a ps3. I think that the price tag justifies the console because for two reasons: 1) Unless you cover up the vents on the ps3, it's nearly impossible for the console to break. Can't say the same thing about the xbox 360. If you spend $600.00 on a console, you don't want it to break on you. 2) You get a freebie blu-ray player which you would have to pay extra for and having it included in the ps3 is a steal. I think that sony should just scrap the 20 GB because no one wants it anyway and hold off on the 80 GB until later. I think that sony should hold off on the 80 GB until later because the last thing you want to do is have the customer get the 60 GB and then 5 months later get a newer console with an 80 GB. Nintendo waited quite a while before introducing the ds lite and I think that sony should do the same. Starting on the 24th of april this year, fear comes out for the ps3 and from there more games come out until the end of this year.

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