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Buy a PlayStation 3 and Sink Sony 441

sonnyweathers writes "There has never been a more perilous time for Sony than 2006. But if you think you can save the company by buying PlayStation 3 consoles, you're wrong. Analyst Evermore believes that selling 6 million PS3 consoles will make Sony a ripe target for takeover — perhaps even by Microsoft."
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Buy a PlayStation 3 and Sink Sony

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  • by pieterh ( 196118 ) on Monday September 25, 2006 @10:04AM (#16184559) Homepage
    If Microsoft bought Sony, they'd own a whole lot of music and movies... I wonder what they'd do with that.
  • "Save Sony?" (Score:5, Interesting)

    by plover ( 150551 ) * on Monday September 25, 2006 @10:05AM (#16184571) Homepage Journal
    From the article, Sony's CEO was quoted as saying "Want a PS3? Work a little harder."

    What do I have to do if I happen to like watching the company most actively pushing DRM on us flounder and collapse? How can I personally help to hasten that demise? Work a little harder? Be a little less greedy?

    Actually, that's a strategy that could possibly save Sony -- abandon DRM loudly and publicly, and tout themselves as the Kings of Unrestricted Media. A big campaign of "We trust you to not steal our stuff, but Microsoft and Apple think you're thieves."

    Hey, if they're going down the toilet anyway, try a little innovation! Work a little smarter, not harder.

  • by eldavojohn ( 898314 ) * <> on Monday September 25, 2006 @10:07AM (#16184599) Journal
    The analysts are counting on Sony making up the sales of machines with the sales of video games.
    If you don't make a profit on the console, then you probably hate me. Usually the only reason I buy a console is because of a game or two that are specific only to that console. My game libraries are quite small and if I ever buy more than two or three games, they are used and cheap.

    My last console of purchase was a Gamecube. The number of retail games I purchased for it totals two: Super Smash Brothers and Windwaker. I hope Nintendo made money on that console because I doubt they made much on the games I purchased for it -- though I could be wrong.

    So how many games would I have to buy to make a PS3 profitable? Well if they lose $300 per console and let's be generous and assume they make $50 profit on each game, then I'd have to buy six games -- which there is no way in hell I'm going to do because each game is going to be $60. If I'm to drop $500-$600 on the console (which I'm probably not going to), I'm not dropping another $300+ on games.

    Now, if Sony makes big royalties on their Blu-Ray DVDs and the sales of the PS3 increase sales of that, they may be OK. It's hard to say but I think that the adoption of their Blu-Ray standard is crucial to their survival -- the PS3 being expensive because of it is just making the stakes all that much higher. And they've put themselves in that position so they have no one to blame but themselves. Quite the gamble. 'Will it pay off?' relies on too many factors for me to even ponder ... or care to ponder for that matter.
  • by TrisexualPuppy ( 976893 ) on Monday September 25, 2006 @10:07AM (#16184611)
    If Microsoft bought Sony, they'd own a whole lot of music and movies... I wonder what they'd do with that.
    That is highly unlikely, due to Sony's financial diversity. Check the middle of this page [] for a little info on that. Sony isn't going to sink. They'll just take on lots of water and use their highly anticipated game titles as a bilge pump.
  • Meh (Score:4, Interesting)

    by richdun ( 672214 ) on Monday September 25, 2006 @10:09AM (#16184643)

    First, TFA suggests that MS could take over Sony's video game arm, not the whole company. Second, it pretty much assumes that MS would want it. Why exactly would MS need/want it? If Sony goes that in the hole over the PS3, meaning not only did they lose a ton of cash on the loss per sale, but also didn't make hardly anything in third-party licensing deals (something TFA seems to forget is the largest revenue driver for consoles these days), that would mean that the Wii60 combination dominated the market - all this after the PS3 sold 6 million units (see the faulty logic yet?). Both Sony and MS lost tons on sales of consoles with the Xbox and PS2, but more than made it up with first-party games, third-party licensing, and the like.

    Stranger things have happened, but I don't see it. Microsoft itself is a prime takeover target with almost zero debt and huge cash reserves, but it's too big for an LBO (at least we think it is).

  • Well (Score:2, Interesting)

    by Sv-Manowar ( 772313 ) on Monday September 25, 2006 @10:27AM (#16184889) Homepage Journal
    "In a February story for CNet, it was estimated that the total cost of components for the PS3 would be in the neighborhood of $725 to $905". I highly doubt that this is still the case, especially after they cut the price of the Japanese launch machine on Friday (link []). This is backed up further by the fact that the Japanese market is by far their strongest and it is definitely where they are going to sell the most machines, considering the US has already got market proliferation from the Xbox 360 which will be challenging it thanks to a price cut at christmas, along with the introduction of the Wii. Not to mention Europe, which doesn't even get it until March 2007.
    In Japan, the PS3 will be the main console over there and sales this christmas will be huge for them. There is no way Sony would take such a hit on the launch machine, and I'd put money on the cost of components having dropped a good deal in the last few months.
  • by KalElOfJorEl ( 998741 ) on Monday September 25, 2006 @10:30AM (#16184929)
    There's fans from every camp here on Slashdot for consoles: Microsoft, Sony and Nintendo. However, something to keep in mind despite whatever your affiliation is, if any: This is a BAD thing All of this, if it comes true, will equal gross complacency. Marketing analysts are preaching a damning future for the PS3 (though I rarely, if ever, take marketing analysts seriously), and though some people are cheering this on, they only should be if they're an enemy of the video game industry. Suggesting that Microsoft would buy them out is herecy; and to call yourself a fan of anything having to do with video games whilst rooting for such an outcome is hipocrisy in its truest form. Think about it people, how long have we been stuck with Windows XP now? Five years. How long was Internet Explorer stuck in the 5's and 6's? Even longer. Now, you have the Firefox's and Opera's gaining steam, so IE 7 is in the midst (not saying it's necessarily good). Ubuntu, OSX and even smaller rivals like ReactOS are making their own impacts. Microsoft knows it has to compete with others now to avoid losing marketshare, so something Vista this way comes. Once again, complacency is bad. Microsoft taking over Sony's throne in the console market would be quite unfavorable. Want to be stuck with the XBox 360 another decade? With Nintendo moving over toward more of an overall experience rather than raw performance, this leaves a deficit of competition for Microsoft. They have no reason to pour millions into R&D for the next console to lose money on initially if there's no market to capture. Sony seems to be making a LOT of textbook mistakes, similar to those that can be found on the console tombstones of Atari and 3DO. Let's hope that history doesn't repeat itself for the sake of the industry.
  • Re:Strange (Score:4, Interesting)

    by UbuntuDupe ( 970646 ) on Monday September 25, 2006 @10:33AM (#16184979) Journal
    Yes, and along the same lines, what if people bought them en masse for a non-gaming, non-blu-ray purpose? What if, say, university workers started buying them, and salvaged them for parts, esp. the processors for a supercomputing system. You'd also get hard drives and graphics cards. I'm sure these could be used in other fields, and they're priced under cost -- a better deal than anywhere else.

    Then, they're just a charity for people who need computer parts. What would stop this?
  • by bmajik ( 96670 ) <> on Monday September 25, 2006 @10:39AM (#16185093) Homepage Journal
    Speaking for myself only (but, I am a MS employee), I seriously hope that _never_ happens.

    To say that I am ... dissatisfied with what we're doing in terms of DRM and content protection technologies for content we have no financial stake in.. would be an understatement. I've gotten in some pretty heated arguments with people closer to those groups internally and there are days I feel like looking for other employment options.

    Imagine how awful things would be if MS owned a bunch of "traditional" content (besides software.. which has grown up with "piracy" and the market understands how to deal with it..and the providers have grown up figuring out how to stay alive inspite of it)

    When one umbrella organization owns content and technology, the interests of one are going to suffer due to the other. Sony makes this plainly evident. I suspect that the content people at Sony are furious that the technology people haven't invented a remote "extort-money" button for the latest Sony-Style line of kitchen radios.. and the consumer electronics people are livid that they keep getting memos suggesting that they invent a TV that plays ONLY Sony Pictures movies from the content arm.

    When I talk about stuff like the broadcast flag, etc at work, I can still posture the argument that it's not clear that we make money by playing well with that thing vs ignoring it or taking a more consumer friendly approach. If suddenly "we" benefited from crap like the broadcast flag, those arguments would be DOA.

    (Just like slashdot - there is not a singular hive-mind mentality inside Microsoft, and it should be clear that not everyone is 100% thrilled with everything that gets MS's name attributed to it. I can only imagine that there are good engineers at Sony as well that are upset with what has happened to their company.. )

  • Not MS But... (Score:4, Interesting)

    by skribble ( 98873 ) on Monday September 25, 2006 @10:45AM (#16185199) Homepage
    Disney would buy Sony (with some part being sold off to Apple) MS would have nothing to gain by buying Sony except to just put them out of business. Even though MS is getting more aggressive in competing directly in the Hardware business, buying Sony would freak out the Dell's and HP's of the world (And honestly the anti-trust gov't types would have to be smoking something real good to let this one get through... essentially MS would likely have to sell off the hardware stuff, leaving just the media, which while interesting to MS would turn away the other media people and make MS's media/DRM play more difficult for them). Disney on the other hand would be a perfect fit. They would add the media to their portfolio (give them more theme park ride possibilities even) The PS3 is great since Disney like to publish Games... They could hire the right game developers and go all Nintendo on everyone (in stead of Mario though, think Mickey). Of course this would benefit Apple indirectly since well their interests are currently tied together pretty strongly (iTunes now gets Sony movies, and has more leverage in future iTunes Music negotiations), yet still Apple maintains the guise of neutrality. The computer hardware would likely get sold off (Sony Laptops are quite cool). The software could get sold off too (maybe to Apple, Combining Acid IP with Garageband, Vegas with iMovie, FCP, maybe creating a PC version of iMovie and GarageBand?). The Camera business, Chip making, and all that could continue under the Sony name or get sold off as well, heck the peripheral stuff would also mesh well with Apple (except the Walkman but again the IP could be valuable). Of course Steve Jobs could make this happen without too much problem making a win-win for both of his companies.
  • Horrible article (Score:3, Interesting)

    by harryk ( 17509 ) <> on Monday September 25, 2006 @10:57AM (#16185373) Homepage
    OK, so I did something I'm not supposed to do before ranting, I actually read the article. Forget for a second that the author specifically repeats itself, but its poorly written as well.

    First, lets take the blue-ray drive. Lets assume for a moment, that the article correctly reports the price at between 200 and 300 dollars. So you're telling me the that between half or more of the cost is in the drive itself, to say nothing of the components that make up the system. I think Sony is run by baboons most of the time as well, but come on. Maybe at a full costs level, being sold to OEMs the blue-ray drive costs that much, but lets be real here for a second, they're not paying that much to have them.

    Going further into the article, it suggest that Sony will force you to buy a bundle, big surprise there. Every console during launch has basically forced you to buy some bundle. And lets be honest for a second. What good is a console without atleast 1 game. Show me one early adopter that bought anything, just to have it sit on the shelf and collect dust. Of course you're going to buy a game, possibly two. As long as I can pick the game, I don't really think thats a problem. Now, on that same note, don't force me to buy an extra controller or any other 'accessories' especially since now the low-end model will offer HDMI port. Personally, I think thats a plus. Yes it will drive up the core costs just a touch, but lets be honest again, chances are that if I bought one today, I'd still end up buying the propietary component cables. This way I can buy the HDMI cable from a vendor of choice, and probably at a non-inflated price. I'll be standing just outside of BestBuy offering HDMI cables at half the cost of Monster on release day. Digital is digital.

    Is the price of the PS3 high, yes it is. Do I still want one, yes I do. Will I buy it, probably not - but maybe. Does it cost more than the xbox 360, not necessarily. I can buy the 'base' console for the same price as the 'premium' 360. Plus I get BlueRay without any additional costs. The only advantage I can immediately see the 360 currently having is the modability. Give the PS3 1 year and I'm sure we'll see the same results.

    I could go on, but to be honest I don't have the time or the energy to further crap on this article. I think someone had a word quota to fill, and this was there attempt at getting it done with.
  • Bad guess (Score:3, Interesting)

    by SuperKendall ( 25149 ) on Monday September 25, 2006 @11:15AM (#16185647)
    It's only a guess that GT HD will be expensive, it could also be the case that it sells for half the price of other games and filling it out just adds up to the cost of a normal game. You are turning a feature I like (being able to buy the game cheaper and just get a few cars that I care about) on its head and making it seem a negative.

    As will all other things PS3, we have to wait till the console arrives to see what are negatives and what are positives.
  • by borden_hawk ( 1005475 ) on Monday September 25, 2006 @11:22AM (#16185761)
    You are all forgetting that the US is not the only market Sony serves. [Unless I didn't fully read everything, and if I didn't, I'm sorry] And while Slashdot is US-centric, Sony is not.

    UMD is alive and well in Japan. Minidiscs are alive and well in Japan. New video games [for the ps2] normally cost around $70. It seems Sony is treating the US market as if it were Japan.

    However, even if this strategy bombs in the US, there is still a huge market that will eat it up. People wonder why the XBox 360 does poorly in Japan. It's because there are no games for it - most of the games that Japanese like are for PS2. The trend will continue with the PS3. Even if sales in the US are poor, Sony will recoup some of the losses from overseas markets.

    I'm just guessing, but the PS3 won't bomb nearly as badly, and it will make up ground. It may not end up being more successful than the PS2, or even the XBox 360, but I think it will end up being successful.
  • Re:"Save Sony?" (Score:5, Interesting)

    by plover ( 150551 ) * on Monday September 25, 2006 @11:48AM (#16186165) Homepage Journal
    It's all about history. A lot of (old) people are still bitter about having to replace their Betamax VCRs. The feeling of having been screwed by a corporation doesn't fade -- it ossifies in the brain.

    It's not an issue of cold facts, it's one of perception. Keep in mind that at this time Sony was widely loved for having produced the Walkman, which was 1979's version of the iPod. I'm not saying Sony went out to deliberately screw the people who adopted Betamax. Far from it, it's obvious that they wanted Betamax to dominate the market. But it didn't, and people felt like they had wasted a huge amount of money trusting their beloved Sony (feel free to adjust a $1000 price tag for a VCR for 25 years of inflation.) When they spent that money, they didn't know it was a gamble or that there was a chance they'd "lose" -- this was Sony!

    Now, compound that disappointment with the rest of the restrictions and proprietary media that Sony's shoveled out the doors or supported ever since they entered the production side of the entertainment industry. ATRAC, the copy bit in DAT tapes, Macrovision, Memory Sticks, CSS, HDCP, (and the rootkit fiasco) and you can't help but notice a pattern of general contempt for their customers evolving over the years.

    So if a pissed-off grumpy old guy wants to whine about getting burned by Betamax, let him. He's got tons of evidence on his side, even if the facts are slim.

    (A lot of people who paid thousands of dollars for non-HDCP HDMI televisions a few years ago are about to enter that same ripped-off state, so look for a fresh crop of bitter young technophiles to adopt a similar attitude towards the makers of their plasma TVs.)

  • Re:Strange (Score:4, Interesting)

    by drew ( 2081 ) on Monday September 25, 2006 @11:53AM (#16186251) Homepage
    Two things:

    1) Sony doesn't make the consoles as the order comes in. Sure, they won't make 6 million right away if nobody is buying them, but they still have to have enough on hand for the initial launch to fill demand. So if they make two million consoles and manage to get half of those onto store shelves before stores realize that nobody wants them, then Sony is out $600*1M + $100*1M = 700M. If they make 6 million and they sell out, they are out $100*6M = 600M, and even that is assuming that there are really 6 million people out there who are willing to spend $600 on a console and nothing else just to spite Sony. Sorry, don't think so.

    2) Does anybody actually know that Sony is selling these consoles at a loss, or is this all just wild speculation? So far as I know, the only company that has ever sold a console at a loss was Microsoft, and they explicitly were not interested in making money on the console, but rather spending a boatload of money to make their way into a new market. The razor blades analogy is so bad for this market for a variety of reasons, but the most obvious one is that razor blades are consumed. You can't buy a razor and just one blade, because the blade will wear out and you have to either buy a new one or you're left with a worthless plastic stump. Console games are not consumed- you can buy just one, and it will last you the lifetime of the console. I know a couple of people who bought a PS2 just for the GTA games. If Sony had been selling that console at a loss, they would have never made their money back from three games, when one or two of them were purchased as "Greatest Hits" for $20. All of the estimates that I remember seeing for the "per console" cost to Sony of the PS3 included sunk costs such as the cost to develop the BluRay drives, which is misleading because Sony has already spent that money, whether they sell 1 PS3 or 100 million.

    Anyway, I think Sony really blew it on this generation. They are too expensive to compete with Nintendo, and they are a year later on the market than the XBOX. Unless they have some really good exclusive games, (which it's been a long time since they have had) they are in for a world of hurt pretty soon.
  • by The Sage Of Time ( 862628 ) on Monday September 25, 2006 @12:01PM (#16186349)
    To be honest, the 360 hasn't done very well, that's why. No one really CARES about it.. The original Xbox held much the same status, and it doesn't seem to be changing.. I'm not bad mouthing it, or I'm not trying to do so, I have nothing against the console itself.. it just isn't interesting to me, nor to anyone I know. And the majority of people I see that I don't know seem to follow this same trend, it just isn't very popular and as such.. it never gets mentioned.

    Besides, this is Microsoft. $500-ish for their complete package is no shocker.. And anyway, there was plenty of discussion about their decision to make two packages back when it was new.. you know, almost a year ago? Regardless anyway, Sony's "basic version" costs as much (if not a tad more) than Microsoft's "complete" version.. there is obviously some concern there to those that don't examine the facts carefully. I mean, who wouldn't double take on that bit of knowledge and go "Hmm"?
  • by bmajik ( 96670 ) <> on Monday September 25, 2006 @12:20PM (#16186625) Homepage Journal
    I'm going to stretch our words just a little bit:

    "and it should be clear that not everyone that died in the WTC on 9/11 was 100% thrilled with everything that gets the USA's name attributed to it"

    OK. What does it say on your paycheck?

    It's safe to assume that you are at least partially thrilled, because you continue to work there. Sure, your anti-American fifth column crusade is noble and all...but you're still taking their money, which weakens your rhetorical stance.

    Do what you need to do to feed yourself, but you still work for The Man.

    We can see what indiscretion in choosing "targets" and/or having a binary opinion of who is or is not "guiltly", "part of the problem", or whatever leads to.

    let's try another one:

    "and it should be clear that I am not always 100% thrilled with everything that my wife says or does"

    OK. What does it say on your marraige certificate?

    It's safe to assume that you are at least partially thrilled, because you continue to stay married. Sure, your I-wish-I-got-my-way-all-the-time fifth column crusade is noble and all...but you're still staying married, which weakens your rhetorical stance.

    Do what you need to do to find happiness, but you still got owned.

    I'd be happy to explain at length if you're truly curious about my employment decisions. There are many avenues for trying to change the world for the better, with varying degrees of personal comfort and ultimate effectiveness along a gradient that is at least 2 dimensional. There are those that think Microsoft is absolute evil and must be destroyed, and there are those that think that Microsoft has generally done more good than harm, and can be improved from within. I lean more towards the latter, but as I alluded to in my original post, sometimes I have doubtful days.

    Only the maintainers of TeX/Metafont have the luxury of working on a perfect codebase :) For all of the rest of us, we have the opportunity to make things better for people.

Any sufficiently advanced technology is indistinguishable from a rigged demo.