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The Ten Year Decline of Sony

NES looks into Sony's downward trend over the past 10 years and looks into the management problems that have been ailing the tech giant over the past decade.

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Hatsune-Miku1419d ago

Now I can't wait for the article about Microsoft one of the richest company ever is on the decline

MacDonagh1419d ago (Edited 1419d ago )

Quote from the article: "Total Liabilities as of June 2012:

Total liabilities are the total amount of all financial obligations (short term and long term) of a company. This includes all creditor claims on company assets.

Electronic Arts Total Liabilities: $2.27 Billion
Google’s Total Liabilities: $21.33 Billion
Apple’s Total Liabilities: $51.15 Billion
Microsoft’s Total Liabilities: $54.91 Billion
Sony’s Total Liabilities: $135.61 Billion

Sony has more total liabilities than Microsoft, Apple, Google, and Electronic Arts combined."

Don't make this into a fanboy thing. Sony is in a financial meltdown here and the writer has provided sources, charts, facts and figures to back up her argument. How about openly discussing the article?

Hatsune-Miku1419d ago (Edited 1419d ago )

Sony is on the decline but they make the highest rated and best exclusive IPs.

Let's not dwell on the negatives when they've taken drastic measures to fix their problems.

Might as well make an article about the decline of Sony walkman while your at it on " NEWS 4 GAMERS"

LOGICWINS1419d ago

"Let's not dwell on the negatives when they've taken drastic measures to fix their problems."

But this article is specifically about the negatives.

"The Ten Year DECLINE of Sony"

If your not willing to dwell on/examine the negatives...why are you here to begin with?

Freakazoid20121419d ago

"Sony is on the decline but they make the highest rated and best exclusive IPs. " Actually Nintendo has the highest rated exclusive game this gen but I think what you fail to take into account is that awards do not pay off debts.

Nobody can deny that Sony makes good games but an award for GOTY does not translate into a paycheck.

I hate agreeing with Macdonagh because of his heterosexual phobias and his need to personally attack anyone who doesnt think gays should be treated better than anyone else but he is right in this care.

LOGICWINS1419d ago

"Nobody can deny that Sony makes good games but an award for GOTY does not translate into a paycheck."

Beautifully stated.

Qrphe1419d ago

@Freakturd

Well, your last paragraph was very unnecessary wasn't it?

voodoo3411419d ago

You're comparing mainly software companies against a manufacturing company. Plus anything those companies do manufacture is outsourced. Not really a fair comparison. Samsung have total liabilities of over $200 billion. They must be truly shafted then. Sony have difficult times ahead. So do lots of other manufacturing companies. But lets not pick one line from a balance sheet and look silly.

morganfell1419d ago

Kaz Hirai was only recently promoted by the board and events up until June do not reflect the beginning of the changes he has instituted. He has taken enormous steps to reorganize Sony and solve it's major issues. Figures show he has already cut the operating losses. It will take time. Operating in the red doesn't mean continued decline as Sony isn't going to recover overnight.

No one it seems, wants to consider Hirai's actions taken in the few months since he fully assumed charge (which actually wasn't passed by the board until June this year) and the One Sony Recovery Plan. They want to look at all of the issues that piled up, and they did, prior to his taking the helm. But then again, there is no news like bad news.

MacDonagh1419d ago (Edited 1419d ago )

@Hatsune-Miku "Sony is on the decline but they make the highest rated and best exclusive IPs."

Cognitive dissonance is such a terrible thing. If you believe that the female Assassin's Creed cosplayer is far better front-page news than this article, that's just your opinion man.

@Freakazoid2012 "I hate agreeing with Macdonagh because of his heterosexual phobias and his need to personally attack anyone who doesnt think gays should be treated better than anyone else but he is right in this care."

I'm an egalitarian Freakazoid2012. I'm not exactly sure what has rustled your jimmies so much, but it wouldn't be outside the realms of possibility that you're using a duplicate account to aim a shot at me, would it? If you disagree with my views on EQUALITY, then that's your business not mine.

@Voodoo341 "You're comparing mainly software companies against a manufacturing company. Plus anything those companies do manufacture is outsourced. Not really a fair comparison."

I was merely picking out a part of a rather interesting article that has many facts and figures with sources and charts. Tbh, I don't think it to be particularly unfair, especially since they are all involved in video gaming in one way or the other. *Google owning Youtube which have found residence in both PS3 and 360 and youtube being used for game media etc* The article further expanded on the problems that they've had when it came to R&D and engineers actively hiding the true costs of their systems before launch from the directors of Sony. Absolute bonkers to run a business in such a way.

@Voodoo341 "Samsung have total liabilities of over $200 billion. They must be truly shafted then. Sony have difficult times ahead. So do lots of other manufacturing companies. But lets not pick one line from a balance sheet and look silly."

Samsung are not involved in the videogame industry and they are probably in a way better position than Sony's current predicament. The article paints a very bleak picture of Sony's future and where they might be heading in the near future. I've only picked out ONE piece of information out of that article. It's quite a good read and there is plenty of data to scope through and ponder on.

humbleopinion1419d ago

"Sony is on the decline but they make the highest rated and best exclusive IPs"

Actually you're wrong about the highest rated part. In 2011 Microsoft was first, and in 2010 it was Nintendo (coming after Take2, but they're multiplatform):
http://www.metacritic.com/f...
http://www.metacritic.com/f...

However, while this article is probably the most informed and detailed financial article I've seen in a long while on N4G and provides some good points to Sony's decline (proprietary tools, arrogance, lagging behind competitors in their technology) - it's still misinterpreting some technical data such as the concept of liabilities, and why they keep going up even for healthy companies (employee benefits for examples are liabilities, so if you're company is on the right track of growing and recruiting more people you're liabilities are bound to go up).

However, this article just demonstrates how Sony's stock is under-performing compared to the actual company health. If for example Sony closes down shop tomorrow, they still have 166B$ assets vs 135B$ liabilities, so after cashing out and paying all their debt they'll be left with an enormous amount of 30 billion dollars in the bank to pay the shareholders.
30B$ is 3 times their current market cap at the current share price! This just shows how undervalued they are right now. With this amount of money they can buy 51% of Nintendo, Activision and EA - which just shows how much bigger general electronic companies are

ALLWRONG1419d ago

How is "highest rated and best exclusive IPs" (debatable) going to help Sony?

Sony does more than games. How is that supposed to help declining electronics sales?

joeorc1419d ago

"you want to talk about it ok lets talk about it"

notice you point out companies that make mainly just Software!, while their Overhead is way smaller than companies that make and produce part's and product that , when factories cannot be in production also hurts your bottom line along with the High yen, combined by fierce competition in razor thin margin's if that's if you sell enough product to offset your payout's "IE: operating expenses" lets not forget flood's in the regions that hurts your company to build such product that miss's their shipping date to the companies worker's that build such devices for your company on the production line's, it sure is super easy to just up and close plant's like that and just fire people and kick them to the curb, right?

anything else you want to bring up there sparky?

LOL...lmao software companies over head vs' mainly a manufacturing companies overhead expenses..LOL yupper's

Straightupbeastly1419d ago

Gran Turismo and Last of Uncharted are Sony's only good exclusives left. The rest they've ruined or abandoned.

Time to jump on the Microsoft bandwagon at your own doing or else you'll be forced to once Sony goes bankrupt.

Hisiru1418d ago (Edited 1418d ago )

"Sony would have to sell over 80 percent of their total assets (Total Assets = Every single thing Sony owns including cash) just to pay off their total liabilities."

"Sony’s Market Cap Value on September 2000: $100 billion
Sony’s Market Cap Value on September 7th, 2012: $11.69 billion"

Woow... this part is VERY bad... I hope Sony can recover.

morkendo231418d ago

not to you mac donagh

but damn!!! could this mean gamers are FU'KING TIRED OF FPS AND MULTIPLAYER GAMES??? want more variety!!!

theXfactor1418d ago

@MacDonagh- The fact that all of the companies are involved in gaming is irrelevant. EA, Google, and Microsoft are all mainly software companies so it is only natural that they're liabilities are smaller than Sony's. Apple is the only one on the list that has some pull in the hardware business with their iPhones, iPads, and Mac computers. With that said, Sony has a hand in a lot more markets than Apple. They make TVs, radios, speakers, surround sound systems, gaming consoles, PCs, phones, and too many other things to post here. Samsung is a fairer comparison than any of these companies. Btw, if you consider Google a player in gaming because of its YouTube app coming to consoles, then you have to consider Samsung a player in gaming as well. It makes tablets and PCs that run lots of games. I'm not saying Sony is not suffering through financial hardships because it is, but comparing it to companies like Google and EA is ridiculous.

Clarence1418d ago

I agree totally with what you said, but remember when Apple was on the decline until Steve Jobs came back. Remember how Marvel was before Disney to over.

Every company has its down time. I think Sony will be fine. Kaz in charge now. He help the Playstation get back on track. Which is why he was appointed as the new head of Sony. There will be a turn around for Sony.

MacDonagh1418d ago (Edited 1418d ago )

Wow. There's a lot of comments here, so I'll tackle this one if I can.

@Joeorc "notice you point out companies that make mainly just Software!"

I am not sure why the writer decided to compare companies which are primarily software based. Perhaps it's to show how well-run those businesses are compared to Sony at this point? I am unsure of the writer's motives but I am guessing that comparing companies that have a stake in the game industry is a good barometer to measure how a company is doing, considering how out of control Sony's spending is at this point.

"while their Overhead is way smaller than companies that make and produce part's and product that , when factories cannot be in production also hurts your bottom line along with the High yen, combined by fierce competition in razor thin margin's if that's if you sell enough product to offset your payout's"

The reasons why Sony is in such a state have already been mentioned in the article. How about the power struggle between engineers and executives with engineers actively hiding the costs of the products that they are making before it's too late for the executives to stop them?

Quote from the article: "According to iSuppli (in November 2006), the combined materials and manufacturing costs for PlayStation 3 came to about $806 for the model with a 20GB hard drive. This excluded the cost of the controller, cables, and packaging. For the $499 20 GB PS3, Sony took a loss of about $307 on each console they sold. For the $599 60GB model, they lost an estimated $241. By June 2009, GameSpot reported that manufacturing costs for the PlayStation 3 were down 70 percent. In a 2010 article from CNet/Wall Street Journal, Sony was losing 6 cents for every dollar of PS3 sales. At the time, the PS3 was selling at a retail price of $300 which means they were losing about $18 for every console sold."

That's simply bad business. End of.

""IE: operating expenses" lets not forget flood's in the regions that hurts your company to build such product that miss's their shipping date to the companies worker's that build such devices for your company on the production line's, it sure is super easy to just up and close plant's like that and just fire people and kick them to the curb, right?"

Quote from the article: "On June 27th, 2012, Sony held an annual meeting with over 9,303 shareholders in Tokyo, Japan. After years of multiple disappointing quarters, some of Sony’s shareholders began to release their anger on Howard Stringer. At the meeting, a heckler shouted: “What a job, Mr. Stringer! Can someone tell me why we need to appoint this man―who built Sony’s debt to nearly a trillion yen―to chairman of the board? Is Sony that starved for personnel?” Another heckler proclaimed: “I am against reappointing Ryoji Chubachi and Howard Stringer as directors. Mr. Stringer tried to blame the company’s poor results on the 2011 Japan earthquake and flooding in Thailand, or anything else he could find in the business environment. He’s been giving excuses from the outset. The slow actions of those two have slaughtered the value of Sony.” The room of shareholders exploded into applause around the auditorium."

Some shareholders believe the reasons you give to be excuses. I'm inclined to agree.

"anything else you want to bring up there sparky?"

Nope. I've covered your points and I've used the article to provide a different POV.

+ Show (14) more repliesLast reply 1418d ago
MacDonagh1419d ago (Edited 1419d ago )

Damn. A double post? Okay. I might as well add another point. This warrants some serious discussion, as the numbers that are provided in the article make for grim reading. These are some seriously bad numbers and Sony are in a great deal of trouble.

AngelicIceDiamond1419d ago (Edited 1419d ago )

Did you realize what you just said bro....

"Microsoft One of the richest company ever is on the decline."

Ooohh my god.. the ignorance. The stupidity is ASTOUNDING. I'm beginning to think you fanboys aren't smart at all, intelligence is not your strong point. Well, congrats @Hatsune-Miku you have conjured the most dumbest comment ever to grace N4G how do you feel?

Anyway, if you were a true fanboy you'll admit there's something wrong with your company. And as a fan, find a way to support and help your company. Not making excuses.

MaxXAttaxX1419d ago

Interesting how you said "your company". Sounds like more fanboy talk to me. Always taking sides.

kwyjibo1419d ago

What do you mean you can't wait for the Microsoft decline article?

http://m.vanityfair.com/bus...

It came out a month ago in Vanity Fair, generated a load of attention on social channels and the mainstream pres.

Anon19741418d ago (Edited 1418d ago )

Interesting article. Overall, I thought it was a worthwhile read. A couple of things I noticed though.
Market Cap was posted at $100 billion in 2000. You look at that number and it's "OMG, wtf happened?"

Bear in mind, market cap is a useful tool for comparing companies, but at the end of the day it's outstanding shares times share price as set by the market. Of course, we all know the market is never wrong, correct? :) The number from 2000 is a prime example. In 2000, the tech bubble was at it's height, anything tech related was seeing it's stock price sore, companies with next to zero profit were seeing crazily inflated market caps as everyone wanted aboard the tech train. Then the bubble burst.

Then, OMG! The market cap of Sony was $54 billion in 2007 and only a few years later it was lower! Well, what happened during THAT period? Oh, that's right. The markets were hitting the highest levels they had ever seen before suffering another huge crash. Another market bubble. Is taking snapshots of a company's market cap during periods of soaring markets and then contrasting that with lower periods really a true reflection on the performance of that company as a whole? Of course not.

As for the focus on Sony's liabilities, something is being left out of this discussion as well. You do realize that Sony operates a financial division, don't you? That includes Sony Bank, Sony Life, Sony Assurance, Sony Bank Securities.

How is it you think financial institutions make money? Through ATM transactions? Banks make loans. Lots of them. Then they charge interest on those loans. A bank like Bank of America has almost 2 trillion dollars in liabilities on their books but we don't look at them like they're drowning in debt because it's their business to issue debt. So when looking at a company like Sony, of course it's liabilities are going to look staggering when compared to a company like EA or Apple merely due to the impact of the debt taken on by their financial division. Neither of those companies are in the financial business, are they? So how can you draw a meaningful comparison based on liabilities? Unfortunately, that's a huge chunk of this article and a point that's completely overlooked.

All in all I found this article interesting, albeit overly negative. Of course it's not that hard to find negative quotes regarding any company when you look back over a 10 year period. Certainly putting them all in one place makes it seem dramatic, but is it painting an accurate picture of the company's future? Currently, S&P, who hold a neutral outlook on the electronics market in the near term are predicting a stabilization of currency exchange rates which have been a huge contributing factor to Sony's revenue stream woes as the bulk of their products are sold to western countries. Even so, S&P's predicts an increase in earnings per share of 2067% for fiscal 2014.

Just a couple of thoughts. This article hasn't presented any new information, and certainly the doom and gloom tone of this article isn't currently being mirrored by companies like Standard and Poors who's job it is to examine and comment on the financial well being of organizations like Sony. Of course, S&P wouldn't be ignorant of the impact Sony's Financial division has on liabilities either. Sony's not out of the woods by a long shot, but certainly I don't agree with the overall negative tone of this article given the information and research presented. As a former financial advisor, I never let articles like these influence my decisions. That's why equity research exists, to strip out emotion and expertly look at all factors. This article does not but offers opinion just the same.

+ Show (2) more repliesLast reply 1418d ago
Malice-Flare1419d ago

well, this is Kaz's first year. even investors know that's too short a time to implement changes...

now's a good time to invest in Sony...

smashcrashbash1419d ago (Edited 1419d ago )

Slow news day.Sony is in financial trouble. About the hundredth article to point it out.Thanks for confirming what has already been said.....again. And as usual LOGICWINS jumps to defend another negative Sony article. Another shocker.And the usual 'We should take this seriously, Sony is in a lot of trouble' for people who always act as if they are so much more concerned then the whole gaming community.We all know Sony is having financial troubles. We have heard the figures, heard from the doomsayers and the financial geniuses and every single article. That is what Kaz is trying to fix and why they are trying to reorganize the company. Or haven't you heard? But as soon as another article pops up saying 'Sony is in financial trouble we will be hearing 'We have to take this seriously' from the overly concerned gamers who always think they are more concerned then even the people who actually own the company are.

yewles11419d ago

Ahh, let it go, haters need SOMETHING to make themselves feel better with. It's their happy place... XD

torchic1419d ago

so if people voice their concern, they are haters.

cool.

JoeFixit1419d ago

Or maybe some people just find these facts and figures interesting? You're right that it's common knowledge that Sony is in a rut, but does that mean we can't take a closer look at what's going wrong within the company? There might be no other purpose in that outside of reading about it for curiosity's sake.

And then there are people like Hatsune-Miku who apparently think Sony's financial struggles don't matter at all.

amaguli1419d ago

I don't get how anyone can argue against the facts the author provided. I mean I am a huge Sony fan myself, and I would be devastated if they went under. I'm just not going to let my inner fanboy ignore the hardcore facts that are presented and proclaim her as a hater.

joeorc1419d ago

"I don't get how anyone can argue against the facts the author provided. I mean I am a huge Sony fan myself, and I would be devastated if they went under. I'm just not going to let my inner fanboy ignore the hardcore facts that are presented and proclaim her as a hater."

on the same token , the current trouble Sony is facing , would be a problem is if Sony was not doing anything about it, which they are.

the current CEO, stated what the three core business areas of Sony is now, that the

a) Image sensors
b) Mobile
C) gaming

their TV's are no longer a core part of their business over at Sony. and for good reason, it's lost money for 11 straight year's over at Sony. 11 YEAR'S! which is way more money loss'es than the Playstation part of their company has Lost and as a matter of fact Playstation,mobile, and image sensor's of their companies business is already profitable.

where do you think Sony's going to mainly have cut's go?

this and other post's keep trying to bring up the fact's as though there is no way for Sony to get back into the black, which is not true at all, they are cutting down their debt. anf getting the parts of their company that are not into profit , back to profit. it takes time, it does not happen over night. but atleast they are doing just that and turning it back to black ahead of schedule.

and i notice he's using data from june, here it is in Sept. IFA conference was just recently and Kaz already stated the turn around was ahead of schedule for the back to black.

Outside_ofthe_Box1418d ago

***"And as usual LOGICWINS jumps to defend another negative Sony article."***

I love that you pointed that out. If this was a negative MS or Nintendo article he'd be jumping on comments that supports the negative article, BUT since this is a negative SONY article he jumps to defend said article and any other commenter that supports the negative Sony article as well.

+ Show (1) more replyLast reply 1418d ago
GenericNameHere1419d ago

Yeah, i'm pretty sure EVERYONE knows Sony is in deep financial troubles, but that doesn't mean we should be getting news like this more than twice a week. Why do people want other companies to fail? People need their jobs, and more competition is good for business as it makes companies learn from their mistakes and improve on them. Heck, I may not like the Xbox 360 much, but I still don't want it to fail, as Xbox Live Gold inspired PS+, and it and PSN are going to make the Wii U's online better (well, at least I hope Nintendo does so)

Plus, some the best and memorable games and new IPs in the last 15 years started on Playstation. MGS (not a new IP, but Solid series started on PS1), Tomb Raider, Devil May Cry, Okami, ICO and SOTC, God of War, Uncharted, GT, GTA, RE, and many more. With a console that that has a 15+ years of history, a giant list of games that started on this console and are now classics, and still choosing to create new IPs despite this gen seemingly ending soon AND under financial problems, you'd have to be a giant blind and ignorant fanboy to WANT Sony to go bankrupt and close down.

MaximusPrime1419d ago

A bubble for you. Good explanation

dubt721419d ago (Edited 1419d ago )

Hello, did somebody call for me??? Perhaps my favorite article ever. Fanboy status confirmed.
Go Xbox, Go America! Woooooo!

Redgehammer1419d ago

As much as I truly loathe Sony, I would not want it to fail. Competition, when fair, is always a good thing for the consumer.

Brettman20081419d ago (Edited 1419d ago )

Wow, what an article and it does a lengthy but very good job of explaining Sony's woes. I agree that Sony does seem to have an identity crisis in that they sell a lot of different products but there doesn't seem to be real focus or direction to the company. Unlike say Apple or Amazon who have a limited number of products but they are generally high quality and are razor focused in leveraging them to sell a lot of software/consumables through their formadable ecosystem of books, music, movies etc. I think that Microsoft are also at a turning point with the move from PC's to Tablets gradually reducing their income from operating systems. Their Xbox divison is strong but there is a lot of question marks on how they are going to keep producing high profits. If their new Surface tablets fail then their market position will be heavily scrutinised.