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Buy a PlayStation 3 and Sink Sony

CmdrTaco posted more than 7 years ago | from the there-be-sharks-in-them-there-seas dept.


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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they are sony minions I tell you! (5, Funny)

Anonymous Coward | more than 7 years ago | (#16184535)

what's this? reverse psychology?

"DON'T buy our console!"

Re:they are sony minions I tell you! (3, Informative)

russ1337 (938915) | more than 7 years ago | (#16184749)

It appears they want to make the money back selling the games. Gizmodo [] are reporting a projected increase in game prices to as much as $100 a game - the reason: Increased Dev Costs. So yeah, buy a PS3, but mortgage your house to get some games.

Re:they are sony minions I tell you! (5, Insightful)

Anonymous Coward | more than 7 years ago | (#16184883)

The saddest thing is that Microsoft is probably going to drop the price of the Xbox to $300 or $200 the moment the PS3 hits the stores. Consumers will have to make the choice between many $50 games on a $300 system or a couple $100 games on a $600 system. I think the choice is obvious. The Playstation line had a great run but complete corporate incompetence will probably kill it during this iteration. Pity, but that's life.

Re:they are sony minions I tell you! (2, Insightful)

hoy74 (1005419) | more than 7 years ago | (#16184925)

If Game prices really do go to $100 a game, it may help out a company like GameznFlix [] .

Re:they are sony minions I tell you! (3, Insightful)

creimer (824291) | more than 7 years ago | (#16185053)

Or better yet... Get a Nintendo Wii, save money and sink Sony's market share.

Re:they are sony minions I tell you! (1)

aplusjimages (939458) | more than 7 years ago | (#16185087)

I say Americans don't by PS3. Look how the Japanese didn't buy the 360 and prices went down even more. I say Americans ban together and hold out until Sony brings the price way down.

Xbox should have a new slogan, "Buy American".

What would Microsoft do with all that content? (4, Interesting)

pieterh (196118) | more than 7 years ago | (#16184559)

If Microsoft bought Sony, they'd own a whole lot of music and movies... I wonder what they'd do with that.

Re:What would Microsoft do with all that content? (4, Interesting)

TrisexualPuppy (976893) | more than 7 years ago | (#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.

Re:What would Microsoft do with all that content? (1)

Anonymous Monkey (795756) | more than 7 years ago | (#16185261)

Yeah, but what if....What if MS did get Sony! Sony the insurance company. Sony the personal electronics company. Sony the Media Giant. Sony the bank. Sony the stock broker. Sony the realy big R&D lab. I think that if it happned MS would choke trying to asamalate Sony, and then they would both eather die or become serously smaller players in the process.

Re:What would Microsoft do with all that content? (0)

Anonymous Coward | more than 7 years ago | (#16184683)

> I wonder what they'd do with that.

use uglier people in the videos to reduce the contrast with MS management.

Yeah, that and each song would probably come with a license that says you have to put it on a ZUNE and not an ipod or burn in hell for all eternity

Re:What would Microsoft do with all that content? (1)

dp_wiz (954921) | more than 7 years ago | (#16184689)

Money. As usual...

Re:What would Microsoft do with all that content? (1)

jrmiller84 (927224) | more than 7 years ago | (#16184757)

They'd have a realllllyyy big sleepover

Re:What would Microsoft do with all that content? (1)

muyuubyou (621373) | more than 7 years ago | (#16184965)

Analyst Evermore is wrong. By the time you bought the 6E+6 console, Sony's value would be far away from Microsoft's reach. Microsoft can't afford to buy a company 1/10th the size of Sony, even more so with the uncertainty about Vista market outcome in the medium term. It would be suicidal.

Re:What would Microsoft do with all that content? (1)

ijakings (982830) | more than 7 years ago | (#16185025)

Put them on their YouTube Clone, to copy youtube and warner. Remember they dont innovate, they copy, clone and buyout.

Re:What would Microsoft do with all that content? (5, Interesting)

bmajik (96670) | more than 7 years ago | (#16185093)

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.. )

Re:What would Microsoft do with all that content? (1)

Cold-NiTe (968026) | more than 7 years ago | (#16185291)

Three days after the intial release, it is found, after some investigation, that the reason there were no consoles available to the public at large was that all of them, the entire initial shipment, was preordered from every distributor by Bill Gates.

Re:What would Microsoft do with all that content? (0)

Anonymous Coward | more than 7 years ago | (#16185293)

DRM the hell out of it, of course.

That's no rootkit, it's an OS feature.

"Save Sony?" (5, Interesting)

plover (150551) | more than 7 years ago | (#16184571)

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.

Re:"Save Sony?" (4, Informative)

plover (150551) | more than 7 years ago | (#16184657)

OK, so I misquoted. It was Sony Computer Entertainment president Ken Kutaragi that said this:

"Our ideal," Kutaragi said, "is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."

It was the article's author that summed it up as "Want a PS3? Work a little harder!"

Re:"Save Sony?" (1)

955301 (209856) | more than 7 years ago | (#16184893)

Clearly this guy has never heard of the "salaried employee". What if you don't get paid for overtime? Take another job? Whatever....

Re:"Save Sony?" (0)

Anonymous Coward | more than 7 years ago | (#16184779)

"What do I have to do if I happen to like watching the company most actively pushing DRM on us flounder and collapse?"

Isn't Microsoft the company most actively pushing DRM on us?

Re:"Save Sony?" (-1)

Anonymous Coward | more than 7 years ago | (#16185191)

No, that would be APPLE. All the Apple fanbois seem to forget that i-Tunes is the largest deployment of DRM out there! The success of the ipod and itunes has validated DRM to the industry. Yeah, but keep ragging on "M$", cause they are evil right?

Re:"Save Sony?" (4, Insightful)

Dan East (318230) | more than 7 years ago | (#16184793)

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."

Sony is too big, and has an vested interest in too many areas. Thus they cannot serve only the consumer in any of their divisions. As long as we see movies with the word "Sony" in the opening credits, we can be certain that Sony hardware will embrace DRM to the fullest extent possible.

If Sony could have their way, the only media and hardware channel between the movies they produce and the consumer would be Betamax®, oops, I mean Memory Stick®, oops, I mean UMD®, oops I mean Blue-ray®. And if someone is reading this 5 years from now, insert whatever DRM infected crap they're currently pushing at the end of that sentence.

Dan East

Re:"Save Sony?" (1)

AvitarX (172628) | more than 7 years ago | (#16185063)

Sony liked mini disks too.

Re:"Save Sony?" (1)

drgs100 (1002474) | more than 7 years ago | (#16184841)

As the head of Samsung say, "listen to the guys with green hair".

Re:"Save Sony?" (5, Insightful)

NDPTAL85 (260093) | more than 7 years ago | (#16184897)

You're one of those funny Slashdot people who thinks the masses would care about DRM even if they knew what it was in the first place, aren't you?

Think about what you just said. "abandon DRM loudly and publicly." Go outside your home or office right now and run up to 10 people and ask them if they know what DRM means. Help them out even, let them know DRM stands for Digital RIghts Management but tell them nothing more. You'll be lucky to find one person who can tell you what DRM means. So how exactl would your suggestion help Sony again? And why is Apple so successful despite its use of DRM with iTunes?

Re:"Save Sony?" (1)

falcon5768 (629591) | more than 7 years ago | (#16185211)

1) Your seriously delusional if you think the company who most wants DRM on its media would ever make a about face like that.

2) "We trust you to not steal our stuff, but Microsoft and Apple think you're thieves." Except the fact that it MORE like "We are the reason Microsoft and Apple even had to put DRM on stuff in the first place, since we told them they couldnt sell our content without the DRM."

Kinda helps if you know what your talking about before you go around saying things like Microsoft and Apple WANTED to put DRM on things.

Analyst who? (1, Insightful)

Anonymous Coward | more than 7 years ago | (#16184573)

Analyst me believes that it won't.
Where's my Slashdot article?

Re:Analyst who? (0)

Anonymous Coward | more than 7 years ago | (#16184703)

Maybe her name is Analyst Evermore. Who knows. That website sucks. Decent article though.

Even better... (5, Insightful)

BigDork1001 (683341) | more than 7 years ago | (#16184577)

... don't buy it and just let it sit there on the store shelves collecting dust. Taking this approach also saves you $600.

Re:Even better... (2, Insightful)

jimstapleton (999106) | more than 7 years ago | (#16184923)

Sony already got all the money they'll get directly for those consoles, that just hurts the stores who's shelves their sitting on. By buying them, Sony will make more, and sell more, taking a loss on each.

They get there money from games.

A PS3 is a cheap computer for the processing power. Not a bad system for Linux/BSD, and Sony doesn't make money off of those, if that's all you use. And that's all I'll use on a PS3 if I get one.

Re:Even better... (1)

cHALiTO (101461) | more than 7 years ago | (#16185193)

Then again, if you buy them, it'll get noticed, publicized, and game companies will make more games for it, thus helping sony make a profit. If you DON'T buy it, sony would have sold the first console to stores, but as these see the units gathering dust, and not selling, they're not likely to buy any more ( at least until they sell those ), and maybe game publishers will take notice too of how poor the unit is selling...
So I think NOT buying one is actually better if you want to hurt sony.

Re:Even better... (1)

jimstapleton (999106) | more than 7 years ago | (#16185217)

I guess that is a good point to make.

Re:Even better... (1)

chrismcdirty (677039) | more than 7 years ago | (#16185227)

But doesn't that then hurt the store who Sony just sold more to? I understand that by buying one and never buying a game from it, Sony is investing in a customer that does not actually exist. But for each console a store sells, they'll likely restock that console, and we'll be back at square one, with the store losing out on its predicted sale.

Re:Even better... (1)

jimstapleton (999106) | more than 7 years ago | (#16185301)

Stores typically restock based on sell rate.

Ex: if it takes a year to sell all the inventory they bought, they may make only 1/4 of an order next time - they are still better off than if they didn't sell any. If it takes a month to sell all the inventory, the next order may be 3x of the previous. I guess it just depends on rate of sale as to how much it hurts the store.

Buyout wars (1)

dp_wiz (954921) | more than 7 years ago | (#16184579)

How many X-Boxes we need to by to sink Microsoft?

I doubt it (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#16184581)

The first few batches of the console will sell for a loss, but they will be in such short supply that by the time everyone who wants one gets one, the loss will be substantially less. Regardless of this, Sony make their money from the games and not the console itself - it's a very large inital cost which will be recouperated over a long time period.

Re:I doubt it (1)

jimstapleton (999106) | more than 7 years ago | (#16184775)

true, but Sony won't make money on PS3s running Linux or BSD

Re:I doubt it (1)

TheRaven64 (641858) | more than 7 years ago | (#16184949)

Other Cell-based systems I've looked at have 'call for prices' listed, which to me means 'more than you can justify spending.' The PS 3 looks like it might be a good, cheap, system for developing things for the Cell. Now 'run algorithm x on a GPU' papers are becoming less common in graphics conferences, I suspect that we'll start seeing a load of 'run algorithm x on a PS 3' become common.

Re:I doubt it (1)

pembo13 (770295) | more than 7 years ago | (#16184853)

Ummm...i think the suggestions is to buy the console and not the games...hence cost them money, but don't give them any.

Strange (5, Insightful)

Dan East (318230) | more than 7 years ago | (#16184587)

Boy, that makes a lot of sense. If Sony makes "6 million PS3 units before April", and sells them all, then they recoup part of their expense. If they don't sell any, then they are somehow better off not recouping anything at all? More sensationalism.

Dan East

Re:Strange (2, Insightful)

EVil Lawyer (947367) | more than 7 years ago | (#16184669)

It's a dumb theory, but not for the reason you suggest. Sony won't produce 6 million units if it doesn't sell the first x-million. Their theory requires Sony manufacturing marginally more units for every unit sold.

Re:Strange (4, Insightful)

DerGeist (956018) | more than 7 years ago | (#16184771)

I don't think you fully understand how this is supposed to work. You see, Sony is selling the PS3 consoles with the expectation that someone is going to buy them (at a loss to Sony) and then buy games (i.e., big profits for Sony).

Think of a generic fast-food restaurant. Imagine they have a "value menu" with the Stinkburger Deluxe for only $0.99, but it costs $2.99 to produce. Drinks, however are $2.50 and cost about $0.15 to produce. Similarly fries are $0.99 but cost only $0.10 to produce. The restaurant will go out of business if every customer enters, purchases one Stinkburger Deluxe, and leaves. But most people aren't satisfied just downing a Stinkburger, they want fries and a drink too. That's the idea here; it's called the "razor and blades business model [] ."

So if no one buys a PS3, Sony obviously won't produce six million. If people buy them and buy NO games, NO blu-ray discs, and NO accessories (extra controllers, etc.) then Sony will be in quite a bit of trouble.

Re:Strange (1)

hambonewilkins (739531) | more than 7 years ago | (#16184967)

You make a strong hypothetical economics argument, and an interesting one at that, but I can't agree with your analysis. In this case, if you buy the hamburger for $.99 you can eat it, it is self-contained. However, if you buy a PS3 for $600, it isn't self contained. You need things, like PS3 games or blu-ray discs, to use it. Otherwise you have a $600 paperweight. A better analogy would be that you can buy the Stinkburger buns for $.10 (below cost), but meat costs another $.55 and lettuce $.15, mustard $.10 and pickles $.10. If people went in and bought just $.10 cent buns, then yes, the company would be screwed. But we assume that people will buy that other stuff, right? Or at least some of them would. I mean, why would 1 mil. people plunk down $600 and then buy no games? It would be really cool, sure, but it isn't going to happen.

Re:Strange (3, Interesting)

UbuntuDupe (970646) | more than 7 years ago | (#16184979)

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?

Re:Strange (2, Informative)

Aladrin (926209) | more than 7 years ago | (#16185051)

Take it 1 step further, though. Sony produces and sells 6 million units. They only sell 1 million games.

Q: What are game producers going to think?
A: That either people don't -like- the games or that they are all being stolen. I seriously doubt they'll think the games aren't liked, when they are selling well on the other platforms.

So Sony now has a huge loss on consoles, poor game sales, and game producers that don't want to produce for their console. This approach hurts them in the future as well as the present.

Simply not buying the console only hurts them in the present.

If Sony tries to get smart and stops selling the console, they've added a third problem for the game producers to see... Unavailability.

In the end it doesn't matter, though, because the happy game-buying customers will far outnumber the disgruntled Sony-haters. (Or DRM-protesters, or whatever you want to call them.)

Just to nitpick (2, Insightful)

Anonymous Coward | more than 7 years ago | (#16185107)

Most fast food places earn a profit on EVERYTHING they produce. At McDonalds circa 2 years ago, the ONLY thing the restaurant sold at a loss was a Big'N Tasty (sorry, I've already forgotten where the ' goes. It's their Whopper-clone) and even THEN it was only at a loss during a particular sale (1 dollar a sandwhich, very short lived) and even THEN only if used in conjunction with an employee discount of 50 percent. The sandwich was the most expensive one made because it required (1) Quarter meat, (2) Tomato (usually a premium charge), (3) Quarter Bun, and (4) the cheap stuff like lettuce, onions, mayo.

The sandwhich cost 54 cents rounding upwards, and on effectively a double sale they lost 4 cents. When the sandwich returned to $3, the returned to making 2.50 per sandwich.

And yes, I understand that there is other overhead and labor costs, but the time-per-transaction is relatively low. Divide the hourly salary of the average McDonalds worker (let's go with $7 although I think the average pay might have trickled up a little), and divide that by the number of seconds in an hour and we end up with about 2 cents per second. Lets say the staff is slow and from start to finish that BnT took 40 seconds to assemble and wrap, that cost the store about 80 cents. Now let's assume that it took another 40 seconds for the counter person to pick up your sandwich, put it on a tray and set it on the counter. Another 80 cents. Now, we're looking at about 2.15 to make the sandwhich, versus the 3 price.

And don't foolishly equate the time you wait for your food with the time it takes to assemble, or at the very least should take.

You can further break it down to include the cost of heat to cook that sandwich, the roughly 20 cents in money-time it takes the grill person to lay and remove an entire tray of quarter meat (divided by the number of patties cooked over course), the penny for the wrapper, taxes on the building divided by the number of seconds in a year, the cost of management's salary divided by the number of seconds they work and the number of employees they oversee, etc... but I'm sure there's still baselining a little profit. Just not as much as the soda where the cup costs more than the soda itself.

The fast food analogy is more appropriate to Nintendo who will make some profit on the console, but is predominantly looking at the markup on games.

Re:Strange (0)

Anonymous Coward | more than 7 years ago | (#16185203)

not exactly. To open Sony up for a buyout then the book value of the company has to be decreased to lower the stock price. In accrual basis accounting the cost of inventory in excess of sales price is only applied after the product is sold (this is on the income stmt as cost of goods sold). When 6 million PS3 are sold than the $400 it costs more than sales price gets included and 2.4 Bln in loss is included probably shifting the company for a net loss for the quarter and probably the year.

The Console Makers Hate Me (2, Interesting)

eldavojohn (898314) | more than 7 years ago | (#16184599)

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.

Re:The Console Makers Hate Me (1)

D.B. Tits (963332) | more than 7 years ago | (#16184679)

The situation for Sony is even worse. Microsoft and Sony make a $5 - $10 dollar profit on games which are developed by third parties. So the have to sell you about 60 games...

Re:The Console Makers Hate Me (1)

91degrees (207121) | more than 7 years ago | (#16184879)

I imagine they're assuming the price of manufacture will fall. The early consoles are sold at a big loss to increase market penetration.

Re:The Console Makers Hate Me (4, Insightful)

Spad (470073) | more than 7 years ago | (#16184833)

Luckily for Nintendo, they sold the Gamecube at a profit. It's a little known business trick in the console industry, but not selling your products at a loss is a great way to make money.

Re:The Console Makers Hate Me (1)

KDR_11k (778916) | more than 7 years ago | (#16184837)

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.

I see it this way: The console by itself is useless therefore the cost of the console has to be considered a part of the cost of all games I buy for it. If I buy a PS3 and only one game for it, the entire 500-600€ the system cost me gave me one game which means I've paid 560-670€ for a single game. A PS3 plus ten games gives me a cost of 50-60€ per game for the hardware, at thirty games it's down to 16-20€ per game.

Re:The Console Makers Hate Me (0)

Anonymous Coward | more than 7 years ago | (#16184921)

Do have any point at all?

Re:The Console Makers Hate Me (0)

Anonymous Coward | more than 7 years ago | (#16184999)

I'll answer that if you answer my question: "Who is that question directed at?"

Re:The Console Makers Hate Me (1)

UbuntuDupe (970646) | more than 7 years ago | (#16185077)

What you're saying is reasonable, but look at it this way: Sony could make a loss on the entire line, even after game license revenues. Why? You have to build a brand name first when you crack into the console business. Next-gen, maybe they don't have to take as big a loss. Maybe after they've sold two console generations already, then they can have the credibility to get better prices for their systems and not have to sell at a loss.

Long story short, Sony is taking a loss because it's their first console. [/sarcasm]

Dupe! (1)

mlk (18543) | more than 7 years ago | (#16184605)

No, wait that was for the XBox.

Re:Dupe! (0)

Anonymous Coward | more than 7 years ago | (#16184671)

No, wait that was for the XBox.

Exactly - it didn't work back then, and it won't work this time.

Re:Dupe! (1)

TheRaven64 (641858) | more than 7 years ago | (#16185015)

I can't find any recent figures, but last time I checked the XBox division was losing something like $200m per quarter. Microsoft can prop that up with sales from Windows and Office (although I'm sure they should be slapped with some kind of antitrust suit for it; if using a huge cash surplus to effectively buy a market isn't illegal then it should be), but Sony isn't in nearly as good a shape, financially.

Microsoft theory tenuous at best (3, Insightful)

EVil Lawyer (947367) | more than 7 years ago | (#16184627)

The only argument supporting their assertion that Microsoft might want to buy a beleaugured Sony is:

"And who could be the potential buyer?


That's right. I said it. Just think about it."

Okay. I've thought about it. And it doesn't make very much sense. Neither does the rest of the article -- but at least they tried to support their main thesis.

Meh (3, Interesting)

richdun (672214) | more than 7 years ago | (#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).

Funny I was thinking apple. (1)

LWATCDR (28044) | more than 7 years ago | (#16184791)

I could see Apple buying the Sony Game are before Microsoft. Sony really wants the PS/3 to push Blue Ray into the home and provide a way for Sony to complete with ITunes. Anyone that looks at the PS/3 can tell right off the bat that it isn't about games it is about movies. A deal with Apple would be give Apple access to some Games which it could use to help it's penetration into the home market. Sony could get Apple to push the BlueRay format by simply giving Apple the ability to rip the BlueDisks to the IPod. Could be a match made in heaven.

Re:Funny I was thinking apple. (1)

richdun (672214) | more than 7 years ago | (#16185007)

Interesting. But I guess from more of a philosophical look, I (and many others) have always seen Nintendo as the match for Apple. Sony has recently been the sort of stylish sort of cool kid in the room, but rarely with the cult-like following or true iconic status that Apple has had (in the past decade, at least, Walkman aside ... and no, Playstation fanboys have nothing on Nintendo or Apple fanboys). Apple + Nintendo just seems better matched - both used to totally dominate the market, tried to work with someone else, cut that deal in arrogance/stupidity, saw that someone else rise to dominate the market, and then came up with something totally off the wall and got everyone's attention again.

But of course, as TFA points out, Sony has seen a ton of western investment, something Nintendo doesn't have. Buying Nintendo would be extremely hard no matter what the price.

In an Apple PlayStation world, though, does Apple go back to IBM and use Cells/PPCs in Macs? Or does Intel try to get back into the console business? That's the biggest problem I see with Apple taking over SCE.

Re:Funny I was thinking apple. (1)

TheRaven64 (641858) | more than 7 years ago | (#16185061)

It gets better! The PS3 uses the Cell, which is PowerPC based, and Apple machines also use...

Oh. Nevermind.

Seriously though, the ability to buy movies and audio on your PS 3 from iTMS would be a great feature (for the less DRM-conscious Joe User), since the PS 3 is almost certainly already plugged into their big TV and Hi-Fi.

Re:Meh (1)

bockelboy (824282) | more than 7 years ago | (#16184829)

Of course, I too think that the entire theory is bunk, but there is one point you missed:

On a good year, the playstation division makes up for 60% of Sony's revenue. It's the base of the Sony house-of-cards. Remove it, and the company collapses entirely.

In other words, there's no point in selling the video-game division without selling the whole company. This is still ignoring the fact that there is no way a flagship Japanese company will ever be sold to an American company.

But I doubt that tech pundits ever think about those sorts of points.

Re:Meh (1)

KDR_11k (778916) | more than 7 years ago | (#16185055)

The point is that this could happen even if the PS3 is going to win the market, it's not limited to the PS3 failing. MS is willing to lose money in order to conquer the market so if they were really daring they could eliminate their biggest competitor in one strike, allowing them to have a monopoly on the console market (well, if the Wii doesn't end up beating both consoles). Once they have the monopoly they can start gauging until they've made up for the losses. They'll also run a strategy which doesn't end resetting userbases every generation, instead attempting to lock everyone into their line of consoles like they did with Windows. Not a nice perspective for the customer but considering the losses MS has taken already to make their consoles (4-5 billion just for the original XBox?) this is pretty much the only way they'll be able to recoup that investment.

How many stocks does Evermore own? (1)

Midnight Thunder (17205) | more than 7 years ago | (#16184653)

Would be curious to see if Evermore owns any stocks in Sony. Quite honestly I am not in the market of spending money for something I don't want. I don't care if Sony fails or succeeds, just as long as it quits screwing the public.

Tinfoil hat mode: ON! (1)

KDR_11k (778916) | more than 7 years ago | (#16184661)

There's a chance this is just a ploy to make the PS3 seem like such a bargain. They're selling it at such a low price they're cutting their own throat [] !

Sony could make a killing (2, Funny)

91degrees (207121) | more than 7 years ago | (#16184691)

Simply sell their console to themselves at the typical loss. Then sell them on ebay for the price people are actually willing to pay. Serious profit!

selling razorblades is nothing new (3, Insightful)

Speare (84249) | more than 7 years ago | (#16184693)

There was the same talk about buying XBoxes just to "stick it to the man." Everyone who thinks they can hurt a company by vigorously buying their products, even if they were sold at a loss on the razorblade model, is deluding themselves.

First, they will crow that they're selling tons of units, which will look good to their management and drive forward their strategies, whether or not games are being sold at the same rate. Second, the base units just get cheaper to manufacture over their product lifetime, so at some point, you're thinking you are still shafting them while they take profits to the bank. Third, as I've said before, once you're talking about millions of customers, any possible "hurt" done by a few thousand boycotters or complainers is something a megacorporation can simply shrug off and ignore.

Re:selling razorblades is nothing new (2, Funny)

joe 155 (937621) | more than 7 years ago | (#16184953)

your point is very true, and all the people on /. could do nothing to change this.

If we run with the idea of Bill Gates or MS (If they can ever really be seperated) wanting to buy Sony (I know it's not very realistic) they could use the idea contained here to pretty much sink Sony before buying it. Say Bill Gates was to buy every PS3 which was for sale by buying all that the main distributors had, Sony makes a big loss and won't sell a single game for them. They can't make enough consoles to plug that hole... they're in trouble. Bill comes out and openly admits it and suggests that all investors sell their shares or lose everything. Share price plumets. Sony goes to the verge of bankruptcy, maybe even calls in the liquidators before, hey presto, they've found a buyer - none other than MS!

Don't look for business analysis in a games mag... (1)

TopShelf (92521) | more than 7 years ago | (#16184697)

Basically, they're saying that if people buy the machines (loss leaders) and don't buy the games, Sony will be in trouble. No $hit, Sherlock, that's the way the console business has been for years now.

Re:Don't look for business analysis in a games mag (1)

PrescriptionWarning (932687) | more than 7 years ago | (#16184995)

of course without the games, a console is pretty much a really expensive paper weight.

even though the logic of the thought of buying the machines only makes since on a large scale, when its comes down to it, it is absolutely rediculous, especially since nobody is going to waste their hard earned cache on something they only bought to stick it to the person they bought it from. i suppose some people prefer to live outside a little thing i call reality.

You know it will happen. (1)

Lex-Man82 (994679) | more than 7 years ago | (#16184699)

Bill Gates buys six million playstation 3's shock!!!

Let's say Sony loses $400 on every box they sell. (4, Insightful)

traveller604 (961720) | more than 7 years ago | (#16184729)

Let's not. What kind of an idiot wrote that article??

Buy a cheap Blu-Ray Player, Sink Sony (0)

Anonymous Coward | more than 7 years ago | (#16184747)

So all the leechers looking for cheap blu-ray players are gonna bring down a company by buying all the subsidised stock and no games? PS3 IS DOOMED!

sony laughs at stock markup FraUD billygates (0)

Anonymous Coward | more than 7 years ago | (#16184783)

as it should be.

What? (4, Insightful)

NosTROLLdamus (979044) | more than 7 years ago | (#16184819)

Yeah, right. Selling 6 millions PS3s would only cement sony's position in the video game industry. It'd give them a huge market, and would have developers lining up, purchasing *gasp* dev kits, and of course, licences to produce games. Big Name Games, and hell, sony'd make cash of the turdz as well. That's why they're selling it at a loss. I thought this was the basis of console strategy for a long time? (well, minus nintendo, but they're way out in left field anyway)

Kutaragi just doesn't get it (5, Insightful)

Y-Crate (540566) | more than 7 years ago | (#16184871)

"Our ideal," Kutaragi said, "is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."
I'm not one to assume that I deserve to get a PS3, 360 or Wii, but Kutaragi's comments border on insulting.

Yes, I know that if I want to purchase consumer goods that I need to work to earn money to be able to afford them. I have no problem with this, the problem I have is that Kutaragi's attitude is one of "The price is not our problem, the price is your problem, do something about it."

If you own a business, and your product is rejected by the market fot being too expensive, then you either deal with the lost sales or change your pricing structure. If you cannot do the former because it would hurt your bottom line, and you cannot do the latter because your have designed a product with a very high materials cost, then it's your problem, not that of your potential customers.

Console gaming is overrated (1)

kokojie (915449) | more than 7 years ago | (#16184873)

I played a dozen games on my friend's xbox360 and got bored fast. But I'm still playing CS:S, SC:BW, WC3:FZ after many years.

Couldn't Happen To A Nicer Company (0)

burdicda (145830) | more than 7 years ago | (#16184877)

The guyz just don't have a clue
They have never had a clue

That's what happens when an electronic mfr also gets into the music business
Sonme pretty stupid structuring....

Minidisk coulda been huge....they coulda been the IPOD of the 90's but NOOOOO
these guyz where the great grandfather of DRM and just didn't get it....

Re:Couldn't Happen To A Nicer Company (-1, Flamebait)

Fred_A (10934) | more than 7 years ago | (#16185017)

You might want to reconsider posting from your phone...
Or maybe you should et one of those bluetooth keyboards or something.

wrong! (0)

Anonymous Coward | more than 7 years ago | (#16184881)

the electricbrothahood does not think so. they're a more *reliable* source. ;)

Um (1)

yourestupidjerks (948216) | more than 7 years ago | (#16184885)

Selling 6 million consoles would mean selling a good 20-40 million games, which would more than compensate for the losses incurred by console sales. Which, you know, is sort of their plan.

Well (1, Interesting)

Sv-Manowar (772313) | more than 7 years ago | (#16184889)

"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.

Re:Well (1)

hibiki_r (649814) | more than 7 years ago | (#16185245)

Sony claims that they'll have 400,000 consoles for the US launch, and 100,000 for the Japanese launch. How in the world are they going to sell the most machines in Japan?

The fact is that Sony is more interested in the American Market. Since Microsoft is doing so poorly in Japan, they really don't need to try too hard to beat them. Nintendo will sink or swim on their own, regardless of what everyone else does.

Sony will ship around half a million million consoles to Japan before the end of the year. Based on Nintendo's claims, they are probably sending about 1 million consoles to Japan before the end of december. It'd take a miracle for the PS3 to lead in any territory. They are just making enough units compared to the competition.

Also, as far as the price cut goes, it'll be less of an issue to their finances because the ratio of core units vs premium consoles is heavily skewed towards the premium ones. Apparently, 80% of the consoles will be premium.

Camps aside, wake up and smell the Capitalism (2, Interesting)

KalElOfJorEl (998741) | more than 7 years ago | (#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.

This reminds me... (1)

fritzk3 (883083) | more than 7 years ago | (#16184945)

This reminds me of a skit I saw once on Saturday Night Live where the characters were spoofing the crap that is generally sold on those Home Shopping Network TV channels. The sellers were begging people not to buy the merchandise (including a bronze bust of Scottie Pippen from the Chicago Bulls) because they were supposedly losing money on each sale. I think they went so far as to pretend to douse the studio in gasoline.

Anyway... that's my long-winded way of saying that this sounds like a familiar story: "Please don't buy too many of these consoles, because we'll end up bankrupt!" Of course, most of those companies (MS, Sony, Nintendo, etc.) are still around and doing fine... so make of it what you will.

Second Batch Is The Key (1)

blueZhift (652272) | more than 7 years ago | (#16184977)

Big losses or not, the big question for Sony is whether or not the second batch of 6 million consoles sell out or gather dust on the shelves. The first batch of consoles is going to sellout regardless of the retail price and of course games will be sold too. But if the price really is too high for the majority of consumers who would have an interest in the PS3, then that second batch could be in trouble. I just keep thinking about how the PSP has turned out, going from a lot of hype and excitement initially to relatively flat sales later and a dearth of compelling software. If that happens to the PS3, then the future of the company may well be in doubt. Though I doubt Microsoft would be the buyer simply because there may be a number of Japanese companies, and perhaps some Korean ones too that may take an interest in all or part of Sony. This is just pure speculation though.

Imagine the state of DRM... (1)

erroneus (253617) | more than 7 years ago | (#16184991)

If you think the Sony rootkit was bad. Consider what might happen if Microsoft was involved. Chilly...

Economics 101 (3, Insightful)

Alchemar (720449) | more than 7 years ago | (#16184997)

This is based on how much sony will lose based on cost to manufacture vs. sell price. $750 - $400 = $350 in the hole. They will be spitting these things out like no tomorrow near the release date. They have to pay to manufacture the unit if you buy one or not. $750 - $0 = $750 in the hole. If you want to see sony go down for all their stupid behavior then Don't buy a unit. They will probably cut off production when they don't sell, but it should be too late by then.

If we can find out who is making all the decisions it probably wont be hard to convince him that they aren't selling because they need to manufacture more units, maybe add a root kit to every box and recall the old ones.

Re:Economics 101 (1)

BenjyD (316700) | more than 7 years ago | (#16185239)

Exactly. Selling 6 million PS3s gives Sony a large install base to wave around in PR, attract developers with and earn licensing fees from. Far worse would be to sell only 500,000 consoles or something: that would destroy Sony's revenue stream and the Playstation brand as well.

Then again... (1)

clevershark (130296) | more than 7 years ago | (#16185003)

Selling no Playstation 3s will make Sony ripe for bankruptcy.

OK, not exactly a likely thing (there are *some* people who will buy a PS3 on opening day even if it has no games at all), but you get the idea. The rumored numbers are just mind-boggling: $600 (at least) for the console, $100 per game, and who knows how much a second controller will cost -- especially since they apparently won't even rumble.

Sony tried to make the PS3 into all things for all men, but are making a console that's all things to no one.

Flawed Analysis (0)

Anonymous Coward | more than 7 years ago | (#16185013)

Frist off, there is a 100% chance that this guy is pulling numbers out of his you-know-what. He's no insider. Additionally, he doesn't seem to understand basic economic principles such as sunk costs.

Japan would block a takeover and bailout Sony (2, Insightful)

ConfusedSelfHating (1000521) | more than 7 years ago | (#16185085)

I think that the Japanese government would block a takeover of Sony by Microsoft for one reason: pride. Despite its faults, Sony is still widely preceived as being one of the crown jewels of the Japanese nation. If Sony went deeply in the red, the Japanese goverment is likely to not allow a takeover and bail them out.

Most of Sony's troubles lie in its poor management. Sony could own the MP3 market if it hadn't been as concerned with content protection or proprietary formats. If Sony had made a deal with Toshiba with high definition format DVDs, Sony would be almost guaranteed to make moderate (billions) profits off of the new format. Sharing a positive number (profits) is better than having a negative number (losses) all to yourself. With a new format decided on, the adoption rate of high definition discs would be much quicker. Sony felt that it could win the format war easily by putting the Blu Ray drive in the PS3. I feel that Microsoft launched the Xbox 360 in 2005 because they knew that Sony would be in a poor position with the Blu Ray drive.

If Microsoft could take over Sony, they should. Microsoft doesn't really have anywhere to expand in software, they need to find new products if they want to have growth. Consumer electronics would be a very good area to get into for Microsoft. It is a low profit industry, but Microsoft would be in a position to sell services and software on the products. Many of Sony's failing products could be attractive to various Microsoft strategies. Think Sony with better management, it is really hard to get worse management.

This situation will most likely happen if the Wii is the dominant console this generation. If the PS3 doesn't do well, Sony will be in a position ripe for acquistion. If the Xbox 360 doesn't do well even though they had a year head start, Microsoft will either drop out of the console market or buy Sony and combine the Xbox and PS3 brands. If the Wii is the dominant console, then the anti-trust people will look more favourably on the merger of two failed brands.

Not MS But... (3, Interesting)

skribble (98873) | more than 7 years ago | (#16185199)

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.

Appalling article, poor logic, anti-Sony wet dream (0)

Anonymous Coward | more than 7 years ago | (#16185249)

Sony are rightfully vilified in the tech community for their actions, but the PS3 will still do well.

The price of BluRay hardware will drop massively quite quickly once the blue laser issues are worked out. It could turn a $300 drive into a $50 drive within 18 months. Sony probably will not be making a loss on the PS3 come 2008, and it will cost $299. Microsoft are also making a $100+ loss on each XBox360, but they don't have a boutique component that will drop in price rapidly to enable them to make similar price drops.

I think that Sony were stupid in going with BluRay, or any next-generation media for the PS3. It's a massive risk to try and win the HD media war this way. They could have tried a custom DVD format (tri-layer DVDs for 13GB of storage for games, + natural copy protection) or even used standard DVDs. So instead of proven DVD technology we have new technology that may have high drive failure rates or so on. All to win a pissy media format war.

Sony will go down in history as the company that had an obsession with media formats and owning them. Weirdos.

Merger of Evil (0)

Schraegstrichpunkt (931443) | more than 7 years ago | (#16185265)

Analyst Evermore believes that selling 6 million PS3 consoles will make Sony a ripe target for takeover -- perhaps even by Microsoft.

Is it good or bad to consolidate evil in this way?

Re:Merger of Evil (1)

Schraegstrichpunkt (931443) | more than 7 years ago | (#16185295)

I should have hit 'Preview'. The first paragraph is supposed to be a quote, but apparently I can't spell <blockquote>.

Perhaps not (3, Insightful)

Dark Paladin (116525) | more than 7 years ago | (#16185285)

If you look at the upcoming November console elections - I mean, launches, there's an interesting thing going on:

1. The Wii is launching with more games than the PS3, and in greater numbers
2. Therefore, developers who develop games for the Wii or the PS2/360 will have greater sales than PS3 sales, simply by available units.
3. If a publishing company wants to make more money, make a PS2/Wii/360 game first.

I've even heard some publishers moving to shift their games to the Wii just because the PS3 will be launching in such low numbers. Eventually this will change, but if you're looking at your angry stockholders wondering why "Murder Death Kill 2000" sold only 100,000 copies on the PS3 while the Wii version of "Shoot Him In The Head III" sold 300,000 copies.

If the PS3, however, sells 6 million units within six months, you bet those same developers will want to be heading to the big lake since they expect bigger fish there. Personally, I'm holding off on the PS3 until about 2008/2009 (depending on certain game launches), and I'm actually considering getting a 360 next year with Mr. Tax Return or some such (once they get "Shenmue 2" and "Panzer Dragoon Orta" backwards compatibility up).

I'm getting a Wii this Christmas, if for no other reason than a) it looks sweet, and b) My Lovely Wife (MLW), Mrs. Non-gamer herself who got hooked on "Brain Age" is curious to try out that "Cute tennis game you showed me".

Just because any chance I get to have MLW jumping around the TV set in a cute little tennis outfit is a good day for me :).
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