PS4 won’t solve Sony’s wider problem, say analysts

The city remains largely unimpressed by Sony’s prospects as an investment after this week’s PS4 announcements.

Seeking Alpha advised its readers against buying Sony shares, saying: “What investors really need to consider is what they are getting when they purchase a share of Sony. A very poor balance sheet, and a chain of losses reveal that not even the PS4 can stop Sony’s slow decline.“

[majiebeast]

Again with the mobile and tablet bullshit taking over the market dont make me laugh. If that does happen i quit being a gamer cause i dont see shit like temple run 2 and angry birds as games, and neither do a lot of pc/console gamers.

Analyst=Crazy homeless person who gets put in a office to make up bullshit for Crack and Meth.

[CyberCam]

Are these the same "ANALysts" that have been helping Wall Street rape the US & the world of all it's wealth? Yeah, like I'm going to listen to these idiots!

They're the same ones that tell you to put your money here and six months later your investment capital has magically vanished, and they have bought a new Ferrari!

[nukeitall]

That is because people are ignorant enough to listen to the wrong advice. Do you listen to everything the sales agent tell you in the store?

That said, I think it is pretty much universal that Sony is in deep sh!t and PS4 will only bring them closer to that with even more ongoing losses while they make it a loss leader as an investment into the future.

Same type of investment will happen to MS, but they have a very profitable gaming division and plenty of cash in their coffers.

@majiebeast:
"Again with the mobile and tablet bullshit taking over the market dont make me laugh."

The article if you would have read would have known they don't talk about tablet/mobile at all. The analyst didn't specify, but their point was that Sony narrowly marketed their console towards core gamers, while the industry has moved forward.

My guess is they are talking about broader strategy encompassing casuals, core and hardcore, as well as other forms of entertainment than gaming.

Basically, they are saying hardcore gamers are a niche market relatively speaking.

[dcbronco]

These are the same analyst that trick people into losing their life savings in the market. But that doesn't mean you have to ignore the information you are getting. There is some truth to what they say about Sony's problems. Short-term. But long-term the PS4 goes a long way toward making things right again.

Analyst usually rip a company in the press to chase the Average Joe away from it so that their insider friends can buy it cheaper in a couple of months. Then they tell the truth, the stock price goes up and they sell the stock back to the Average Joe at a higher price.

Sony still may need to sell off some things. Maybe even a division. But the PS4 should bring in a billion plus a year profit in a couple of years. There's no way they can say that's not a plus.

[Cupid_Viper_3]

But Sony also makes tablets and Smarts phones, plus the PS4 is specifically made to interact with Tablets and smart phones. So I'm not sure I get where those so called analyst are coming from.

[miyamoto]

fud

[kwyjibo]

No, the drug of choice for the analyst is cocaine, snorted off a stripper's body.

None of that downmarket crank nonsense.

[fluffydelusions]

I'd hate to live in a world where the only games to play are toilet games on a touchscreen.

[MikeMyers]

They won't be but it's evident that you can no longer release a system that only caters to the hardcore crowd and expect huge financial returns. The console business used to be a very lucrative deal but now it seems they have to support all kinds of applications and other social revenue sources. Why do you think bluray was such a big deal on the PS3? It was to make sure bluray was the new format which could have trickle down effects for Sony. They also have their hand in the movies, they also sell TV's and so on. Trouble is other companies like Samsung came in and took over the TV department while Sony lost lots of money.

So it's true, the PS4 may not solve all their financial troubles but Kaz is taking the right steps in making sure Sony doesn't go under. He knows that Gaikai has to be a key partnership that has the potential to have a great reveue stream. He also knows having Playstation on more devices ups the chances of returns. That's why they partnered with Android too. They are looking to expand gaming.

[user3915800]

People dont get it and most of them never will, if you dont have stocks and have a healthy portfolio into the upfront future, than its all failure.

Its what happened to sony, they invest on competition market that has too much entry and therefore, the market become saturated.

Sony has products that many companies are building up with better products, Trademark of sony its no longer a most have and the reason their shares are garbage.

I see sony loosing ground every year for the past 7 years, and they are correct even with the so call gaming division been healthy or not, they will loose revenues.

Out of the major gaming divisions, MS, Nintendo and sony, Sony has the most potential for chapter 11.

[dcbronco]

I think Nintendo would be the most likely to file for Chapter 11 if we're talking gamin only. Microsoft is making a ton on gaming. Sony should be fine over the long run with the PS4. But the Wii U doesn't look like a good option. Not only will it look outdated almost immediately by the PS4 and 720. But as the years go on the others will distance themselves even more. The pad doesn't really offer anything the others don't have, but the others have power that can't be overcome.

[cleverusername]

Yeah best they just quit now and declare themselves bankrupt huh? Sony stock went up after the show!!

[Gimmemorebubblez]

No it didnt, it sled nearly 2 percent because as, majiebeast said, those stupid analysts kept bringing up mobile games as the future.

Why do you guys disagree with fact!
http://www.tradingroom.com....

[cleverusername]

Up 2.42% I read , also up 26% over last year!

[Zefros]

if you had done a bit research you would know that it was a false article. It was reported a increase not a decline.

[Anon1974]

I knew it was only a matter of time before some analyst popped up to take swipe at the PS4.

And you know what, it's all true and should surprise no one. Just like Microsoft, Sony's game's division generates such a small portion of each company's overall revenue, the entire division could disappear overnight and investors would hardly blink. While new tech is sexy to focus on for articles because it attracts public attention, a new console cycle doesn't amount to squat in the face of Sony's larger problems. The truth is the game division contributes something like 5-7% of Sony's overall revenues. The camera division generates more.

Sony's doing what they need to do in terms of restructuring but they're still only halfway through this process and it'll take years before we will see the end results.

A win for one division isn't going to turn the company around, and no one said it was going to. That's why I'm surprised to see analysts pissing on the PS4 announcement like this. "The PS4 won't save the company!" Who said it would, jackasses? Of course it's not going to single handedly reverse Sony's fortunes.

If Sony announced a new stereo receiver line or camcorder series, really any new, single product line you'd never see analysts weighing in on that one product by saying "That camcorder won't save the company!" The difference is the PS4 has people's attention and has people excited, and where there's a party, there's always a pooper.

[d0nT wOrrY]

Here we go again. It's the doom days again. I don't get it, why we have to listen to those "ANALysts" all the time?

[clintagious650]

I hope the ps4 sells well like the ps2 so these guys can regret it.

Edit: Could u imagine if angry birds was the kind of games the gaming industry turned into. Id quit gaming.

[contradictory]

now we have Wii U, PS Vita, AND PS4 doom articles.
i really hate these...

[ooquis]

Duuuuuu.....someone give this guy an ice cream toaster.

[Skynetone]

gamers will always be willing to update to the latest tech, so no worrys there

on the other hand, how many phone upgrades can the world handle after the next set of phones roll out i phone 6 /galaxy 4 i see a massive decline in sales for i phone 7 / galaxy 5

i think the ps4/ps5 are still in a great position to take over the living room

[Apex13]

I believe they have a potential hit on their hands like the Vita should be but Sony dont do mass market friendly prices so I dont expect it to fly of shelves.

I think minimum look at the tech etc we are looking at £400 and that's with them making a loss on each machine.

Great business model back then but maybe not now.

[stuna1]

I don't think the loss on the PS4 will be as significant as the loss on the PS3, due to the fact that sony had two forms of expensive tech in the PS3, the Cell which was so new that they had to launch up to 1 1/2 years later than Microsoft in some areas!

Then the Blu Ray drives that were $1000 on the market at the time. Even now with the unknowns about the PS4, it's highly unlike that it will ring in anywhere near the cost it took to make the PS3!

The fact that Sony went with PC based components, should only be viewed as a good thing.

[EditorAtGNG]

The social integration into the hard core console market will NEVER work. It is from the same reason why gamers don't play casual crap from Zynga and other companies that are focused on social media platforms. This merging will not happen just because people want to play with their friends. This is just wishful thinking on their part.

If Sony wants the PS4 to work they should focus on providing more games and ways to improve the gameplay experience, not making a huge fuss about how "social" we can get by using their new console.

[andibandit]

Noone is trying to cram casual games down your throat, surely you can co-exist with non hard core gamers. It's just good business to appeal to a wider audience.

Focusing on more games alone isn't gonna help Sony a whole lot....it's not like the population of hardcore gamers suddenly multiply just because they release more games.

To the others in this thread, this isn't a doom & gloom article, it's simply stock analysts telling buyers to beware, which is always good advice.

[EditorAtGNG]

I have no problem with casuals and non-gamers. Everyone is entitled to their own preference and I see no point in denying the opportunity to try out new technology and sources of entertainment. The problem, however, lies in Sony's intention to make their console "social" in all terms. Yes, you can choose to avoid all those, erm, "perks" but don't expect to be left alone. This isn't beneficial to the player in any way. It is only there to make PS4 owners want to "distribute" more Sony-related news and generate more "buzz" for their console. Oh, and to be fair, didn't this whole "social" trend already kinda fail when exposed to the gaming public (Facebook, Tweeter apps in games are largely avoided, making Youtube videos is entirely separated).

In the end, this is my own 2 cents on the matter. Keep in mind that it is posted in an opinion piece ;)

PS: Since when did the addition of MORE games fail as a marketing strategy? I remember PS2 having a shitload of titles (and having been sold in the tens of millions) and it didn't have ANYTHING labeled "social" apart from multyplayer.

[Dno]

wont solve sonys problems ... but it sure as hell will solve mine!

bring it on!!!

[Animal Mutha 76]

Whilst I think the PS4 will be a successful product for Sony I don't think it's going to dominate the market in the same way as the PS2. Games consoles are not known for high returns until mid to late cycle.

It's a market being eroded by completion of other consoles and mobile devices which again doesn't present a great hope of reversing Sonys financial issues.

A lot of the comments here are negative towards the markets because they happen to appear anti Sony and anti PS which is silly and immature.

An educated assessment will demonstrate that's it's quite right for investors to be nervous. Sony needs to get its act together across all of its business areas and generate consistent revenue and market penetration. Samsung, LG and Apple (amongst others) have all kicked Sony where it hurts in the last few years.

They need a substantial refocus to their business in ALL areas otherwise they risk being swamped from all angles.

And before anyone mentions MS, they are in a similar position. Android and IOS are eating into their market. Surface isn't that great and Windows 8 and phone are not getting the love.

Sonys position however, is more precarious currently. To deny that is to be ignorant of economic reality.

[Jamaicangmr]

These analysts need to have foresight and not see the PS4 as the same as the PS3 because it's designed to reach way farther. So this mean PS4 can be used as an avenue to enhance other areas of Sony

[DigitalSmoke]

These money talkers are wankers, they did the excact same thing when the PS3 was comming out, bringing doubt and dark fairytales into ppl's minds hoping they see the Playstation as being in bad shape.

Listen, the playstation 3 did incredibly well, it served its fanbase with a huge ammount of amazing content not seen on any other system.
To this game still its spitting out tripple A greatness, after 7 years of twisted made up constructive negative math, its in the greatest shape of its life time...

So now I'll serve every single one of you so called financial annalysts, a phat dik sandwitch, and a desert Slap with the 5...

[Inception]

Are this ANALyst just took an arrow in the ass? :P

[SpinalRemains138]

They will magically be singing a different tune once the user base reaches 20 million within 18 months and the PS4 and its features are burning hot like Tobasco.

Speculation is always debatable.
Nothing in the financial world is concrete except for the fact that no Wall St exec will ever be criminally prosecuted.

Gaming demographics arent changing at all. Is Angry Birds fun? Yeah, for an hour. The games that PS4 will focus on will be groundbreaking in terms of what a console can do. It's win for gamers.

[givemeshelter]

How about we wait and see what happens? Your head hurts sometimes with their nonsense these analysts spew.
Now saying that, Sony does have to cut back on many of it's other products and be more focused. They have been in financial restructure more than 5 times since the late 1990's.
I trust in Sony and know they will pull through.

[lifesanrpg]

Taken directly from this "analyst"'s profile:

"Currently, I attend the University of Connecticut pursuing a dual-degree in Finance and Actuarial Science."

So Undergraduates writing an article for a website are now considered professional analysts? He's no more qualified to say this than any of us

[DigitalSmoke]

Excactly, and these are the ppl who get a platform to promote negativity.
Its a joke.

[TheGamerDood]

Says ANALysts. Nuff said.