Sony's Credit Rating Downgraded 33
Gamasutra has the news that electronics giant Sony has had their credit rating downgraded from A+ to A by credit ratings firm Standard and Poor's. The move is seen primarily as a result of the PSP's impending launch. From the article: "Although Sony's PlayStation Portable (PSP) was not mentioned by name, many consider the unexpectedly low Japanese launch price of the console, 19,800 yen (USD$186), to be one of the major causes for concern. With some suggesting that Sony will lose significant amounts of money on every PSP sold, the company will be looking at a loss of tens of millions of dollars in the first year of the format."
Open source could help (Score:1)
I don't know why they don't open source development for these game platforms, I know I'd love to develop games for new consoles.
Re:Open source could help (Score:4, Informative)
Because they make money off every game sold, by licensing access to the SDKs and whatnot.
That's why they want more games - they get more revenue. Homebrew games normally don't make them money.
Re:Open source could help (Score:2)
As the parent suggests they make thier money off of licensing out the right to make games for thier consol and the SDK's and special developer versions of the hardware and so on.
I wouldn't mind if they swapped thier Plan to making money off the hardware and selling thier official seal of aproval on games they felt deserved it.
Credit rating bump (Score:1)
Re:Credit rating bump (Score:1)
Of course, when manufacturing costs drop then profits will increase also.
some general info here [betterproductdesign.net] and here [gamecubicle.com]
Re:Credit rating bump (Score:2)
IANAL, but I though anti-dumping laws were supposed to prevent a company to sell something at a loss to undermine competition... isn't that exactly what Sony is trying to do to the NintendoDS?
Re:Credit rating bump (Score:2)
Nintendo crying "but sony is selling at a loss to drive us out of bussiness" won't go far when it's discoverd they are also selling at a loss.
Now they might get somewhere if sony was also giving away the sdk's and selling periphereals so cheap that they obviously were taking a loss across the board from undercutting.
Basically the consols are just ONE part of the whole bussines for consol game systems and the practice
Re:Credit rating bump (Score:1)
Sony was quoted as saying this is due to the fact that they recently built production facilities for 90 nanometer (very small) processors for use in other projects, such as the PS2, PS3 and the VAIO line. With these facilities already built, Sony did not need to build new ones for the PSP.
Also, more than 50% of the PSPs components are manufactured internally. This means Sony is not buying from as many companies who each mark up the price
Is So
not too surprising (Score:1)
What Sony really needs to do is make sure that there are a large number of QUALITY launch titles... sure, sell the PSP at a loss but you'll make it up VERY fast if each person also buys 2-3 games with the system. However, there have alre
Re:not too surprising (Score:1)
Re:not too surprising (Score:2)
Microsoft is dumping money they recieve from their Windows and Office monopolies. It was previously reported [com.com] that 86% of the price you pay for Windows and 79% of the price you pay for Office is profit for MS. This is how they can keep the Xbox afloat. This is a business practice only a
Why a loss? (Score:1)
It's a new market for Sony and they need to get their foot in the door. I'm sure they look at it as an investment not a loss - the loss part comes if noone buys it and they can't recoup their inital loss on game/accessory sales over the next 4 years.
Re:Why a loss? (Score:2)
Battery (Score:2)
If it doesn't work, surely that would mean *another* adjustment of credit status in a year or so with sales to look at. Then I suppose it's PS3 time but what if...oh my god.....Sony got fucked and we were left with only Microsoft.
ARGHHHGH
Tens of millions dollars? (Score:1)
No surprise here, move along. (Score:4, Interesting)
Er, companies have always sold consoles at a loss, especially during launch. I just played a Gameboy DS yesterday and I have to say that Sony has a long road ahead of them if they want to top it.
Re:No surprise here, move along. (Score:2)
In fact, how many new products (new as in design, tooling and first production) AREN'T sold at a loss? I can't imagine too many large-volume items with a break-even point of 1!
GTRacer
- Still loves Sony anyway
Re:No surprise here, move along. (Score:2)
Yes, I know recently they've been inventing new ways to do cool things stupidly, and are excellent at customer disservice.
I'm lucky I guess that my original PS2 (bought Nov 2000) still runs and my Japanese PS2 (a first-gen model bought used March 2002) also still runs. I'm not blind to the PS2 disc read errors many have had. I joked with my wife that the only rea
Re:No surprise here, move along. (Score:2)
By "at a loss" I think they mean that the revenue per unit sold is less then the variable cost of that same unit, therfore, the more Sony sells the worse off Sony is (this is not taking into account profit from game sales, increased visibility and market share)
Re:No surprise here, move along. (Score:2)
It gets trickier if dev/plant/design costs are factored in, where revenue from each sale goes to pay off dev costs until they're paid; then the fun begins.
If sales tank, then the company is stuck holding the title to a useless plant/design/etc.
Pretty much every console has started this way, but with enough units moved, all
Re:No surprise here, move along. (Score:2)
I would like to say I have proof either way on your theory but my best efforts (ok 5 mins with google) turned up nothing.
Popular belief is that the dreamcast was 1st console to be sold at a loss, and now the xbox.
Other than that they are sold at no less than cost.
This said though the companies are pretty tight on telling anyone margins hence the lack of proof.
Eh (Score:2)
Standard and Poor's (Score:1)