Why Sony needs to stop drinking its own Kool-Aid

Sony is in deep trouble. The company has been forced to slash its earnings forecast by 57 percent amid deteriorating economic conditions and its inability to compete more effectively in markets throughout the world.

Of course, Sony will still post a profit--most analysts claim that it'll be about $500 million--but the downturn speaks to Sony's issues and the fact that this once-dominant company has been downgraded to an also-ran in the industry.

[godoftime]

O YEA!!!!!!!!!!!!!
lol...

....oh, and good story.

[Montrealien]

and the fantarts act like hey have won anothe stupid battle. The minute one console is the one to rule them all, we all loose, as gamers. You guys would undestand that, if you where gamers, which you are not.

[Sir_Ken_Kutaragi]

;-D
Welcome to 'Negative News 4 SONY Gamers.com'!!!

"deteriorating economic conditions" Er YEAH!!! FOR EVERYONE!!!

[NegativeCreep427]

OH NO!

OH NO!

OH NO!

OH NO!

OHHH YEAHHH!!!!!

[dukadork]

could we spare some ridicule and forever declare cnet as SPAM?

i know it gives xbots giggles in their pu$$ies but it also gives them premature ejaculations

[GiantEnemyLobster]

More fail from you is predicted for the future? Dang. Things NEVER look good for you and your precious little ps3.

[enjoi187]

OOOOO YEAHHHHHHHH lol

they could borrow some money from Microsoft LOL

[ReBurn]

I guess that it's tough to escape the effects of this global economy.

[fishd]

http://www.forbes.com/2001/...

and we all know how that turned around...

[ReBurn]

I hope it does turn around. The difference is that it isn't the gaming division alone that is causing the most recent problems. At that time the PS2 had just been released two months earlier and Sony was still suffering from the hit of the R&D costs. The PS3 has been out for two years and has already gone through two price reductions.

What's happening now is that the broader economy has been slashing revenues across the whole company. If people have to choose between buying food and paying rent or consumer electronics then they are going to choose food and rent.

Also, this article was written before the severe economic downturn later in 2001. I'm afraid you're comparing apples to oranges.

[sajj316]

great find fishd! Bubbles up for research! Its like PS2 all over again! Remember how that turned out?

[PimpHandStrong]

things will turn around

the world economy will rebound

within the next 5-10 years!

2009 is going to be very hard on the poor and the middle class! Im middle class...own my own home and stuff! I didnt want a bailout! I wanted to see what happens when it hits rock bottom!

Let those ppl on Wall street die! Let them go from making 500,000 a year to making 150,000! How hard life must be for those ppl huh! FUKN thiefs! Everyone FUKN one of them

[LastDance]

wow.....maybe we should all be adult and just brush past this.......piece of..um........"journalism "..........Do the funboy's at Cnet know how lame they are?..

I dont even think 360 enthusists buy this crap.

[GrandTheftZamboni]

From fishd's link:

"Microsoft has proclaimed that it has learned from Sony's PlayStation 2 glitches (for one thing, it is going to let outside companies make most of the components)"

You learned well, M$. That worked out great for 360!

[SL1M DADDY]

Very similar. In fact, I remember that time so much it feels like it was yesterday. Kids like to look at all the FUD and cry fanboy when in all actuality, this will once again just show us that Sony is being run by perfectly capable leaders and in this time they know what needs to be done to make it through a global recession. Only reason it gets any press here is so that those that do not know anything about the market can shout - "Oh Sony is going down like Sega"!

Yeah, sorry but Sony is as strong today as they were then and they will be around for longer than say... Chrysler?

[Montrealien]

when did the PS2 launch again? In NA, 2 months prior to that forbes arcticle. How long ago has the PS3 been available wold wide with these kinds of losses?

I want all of the big consoles to be contenders and make for a competitive market so we can have great poducts from all of them, but some people here need to stop drinking Sony`s Kool-aid also. The reality is they are loosing lots of money, and unless they start outselling he competition by leaps and bounds and sell like the PS2 did in the next year or so, they will have to rethink the way their gaming division works.

GrandTheftStreetcar said..

( Microsoft has proclaimed that it has learned from Sony's PlayStation 2 glitches (for one thing, it is going to let outside companies make most of the components)"

You learned well, M$. That worked out great for 360! )

It worked great for the Xbox, the 360 was a whole other pile of sh*t mistakes though. the oiginal Xbox was a great piece of hardware, to think otherwise it simply lack of knowledge.

[SQWERCH]

The author of this article is a JACK A$$, every single article talks about the bad points of Sony. He does not understand that Sony made the market to what it is today simple as that.

[moparful99]

Mont I think you need to quit drinking your own damn kool-aid... This sudden earnings downsize isnt because of the ps3.. This is prime example of a story being spun out of control and turned to fill the agendas of sony hater... It was stated that sony's earnings forecast was reduced because japan depends on export to run their economy and with americas being the largest consumer its hurting the economy so every major company in japan is hurting.. I like how this and other articles are blaming the ps3 solely for these problems....

[Montrealien]

Youre right Moparful99 the PS3 is recuperating its cost, 2 years in...

The PS2 was making money 2 years in, if not, feel free to prove me wrong. The PS3 and the playstation brand as a whole is a big part of sony now, has been for a while. I wan t it to succeed, and honestly, I believe that in the long run it will, but I won t turn a blind eye to the fact that it is not selling 200k more in NA a month over is competitors like the PS2 was doing.

[ultimolu]

...Not this f*cking site again...
*facepalm*

CNET should drink their own Koolaid, take a backseat and kindly shut the hell up.

[RemmM]

Nothing is going wrong with the economy. Its just that there IS evil out there, and that evil is those rich bankers. They are the ones who control the money and want to collapse all economies of the world so that they can draw us into THEIR new economic system which is a microchip implant. The illuminati are the ones who are destroying the economy. More Americans will be losing their homes from now and so on. Its because our OWN fear will make us slaves. We keep believing these stupid leaders. Its OUR fault for letting this happen. WE are ALL screwed unless we stand up and do not comply with the system. The illuminati control everything. Tv is only a mind control box. SNAP out of it people! And don't go saying that I'm paranoid because you're only going to become a slave if you deny the truth. Companies are going bankrupt. EVEN Microsoft will go bankrupt and people will have NO choice but to accept the new world economy of slavery and mind control. SO STAND UP!

[ravinash]

It covers a lot on industries from electronics, entertainment and even finance.
I think if any company can come out the other side, its sony.
It did have a bit of a hard time in recent years in its general trade but it had been turning things round.
And with its new technologies like the Cell and Blue ray, the electronics part of Sony have positioned them selves as best a possible going into the current climate.

[DARKKNIGHT]

gamer journalists are retarded.....everyone knows you must spend some money to make money.

1st ps same thing happened.
ps2 same thing happened.
its not a surprise that its happening now.

[Mr_Potato_]

CNET is owned by Microsoft. Next article, please.

[navyguy21]

CBS owns CNET!! NOT Microsoft!! Why does everyone think MS does??

http://www.g4tv.com/thefeed...

[La Chance]

Here you go

This article is from a site not owned by MSFT.

http://www.n4g.com/gaming/N...

[ruibing]

I don't care about who owns CNET, but I am sick of this Don Reisinger guy. A good majority of his articles are either biased against Apple or Sony.

[kevnb]

except nintendo and sony

[HowarthsNJ]

"Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET."

[SL1M DADDY]

He is just a blogger so take his word with a grain of salt and nothing more. I would have to say that his more positive review of the Flowbee Haircut System slightly tarnished his reputation as anything credible... lol

[Electricear]

Cnet owns ZDnet as of 2000:
http://news.cnet.com/2100-1...

Microsoft formed a, "Online and Print Media Alliance" with ZDnet in 2006:
http://www.ziffdavis.com/pr...

That means Cnet formed at least a partial alliance with Microsoft. So it doesn't matter if CBS owns Cnet. As long as Microsoft has an online alliance with Cnet, Cnets agenda has to be called into question. This also creates a problem with Gamespot and Metacritic as they are also owned by Cnet. Again as long as Microsoft has a, "Online and Print Media Alliance" with them none of these sites can be wholly trusted to be unbiased.

here is a Quote:
"'We believe Ziff Davis Game Group is the ideal industry partner for Microsoft as we advance the Windows platform and Games for Windows initiative,' said Rich Wickham "

[Silogon]

Yup, yup and yup... Can't argue with logic and intelligence when you're in a sea of stupidity. Why, cause it's so radically different it's gotta be right.

[No FanS Land]

they could sell their exclusives!

[FailStation3]

TOO LATE! AHAAHHHHHHHHHHHAHAHAahaAHAHAAH HAahhahAHAhhaha

[Mr_Potato_]

LBP > everything on 360, so if any of them is in trouble, it's clearly MS. It's been outsold worldwide since the PS3 launch, by the way, so yeah, nice fanboy article from a MS owned website (CNET).

[NaiNaiNai]

thats funny the NPD says different.
http://www.gamasutra.com/ph...
Nintendo DS - 8.5 million
Wii - 6.29 million
Xbox 360 - 4.62 million
PlayStation 2 - 3.97 million
PSP - 3.82 million
PlayStation 3 - 2.56 million
(2007 year)
and acording to the NPD numbers for the 2008 year so far
sony on has a 200,000 unit lead. which in no way makes up for the 1+ million gap in the 07 year.
http://qsf5.com/2008/10/16/...
so based on the facts that i have found (NPD Numbers are lagit.)
even without the 1 year advantage, the xbox360 still has a lead in sells.
-nai-
i still dont see why people insinst on calling me a fanboy T_T makes no sense.

(for anyone who wants total world wide numbers here the wiki sites.)
http://en.wikipedia.org/wik...
xbox 360 had 20 million sold as of july 17 2008

ps3 had 14.41 million as of june 30 2008
http://en.wikipedia.org/wik...

so i still dont see how adding this years numbers to those would still make the ps3 the better selling system.

reality check the only system if any thats winning this time is the wii.
-nai-

[enjoi187]

what does LBP....didnt you hear stock holders are jumping ship because sony is sinking

[iMarcus]

Oh please, get off the LBP pipe.

I don't know whats in it, but every PS3 owner seems oblivious to everything else

[McErono]

57% ist japan only... am I the only one sick of these nonsense articles?

[ReBurn]

How is it Japan only?

[rhood022]

Hmm..global market downturn and Sony cuts earning forecast. The result, shareholders sell their stock because they expect dividends to be low.

When the economies balance out, which it looks like Europe and Asia will before the US, the value of the stock will increase since there is less being traded.

Welcome to economics 101 360 fanboys. You see, SONY encompasses a more diverse portfolio than MS--gaming, movies, music, electronics. While cutting forecasts by 57% seems like a bad thing, that's across the board and is standard for a company like Sony, especially during financial troubles.

Or it could just be a case of undervaluing performance. That way, if their expected profit, which this article states is $500 million, is more.. then the stock goes back up and NEW shareholders will buy into it.

Leave it to a tech website to completely ignore the nuances of economics and focus completely on the insular notion of "Sony = Electronics; Therefore if the electronics side fails so does Sony."

[GWAVE]

@ Sony Defense Farce

So, you're basically saying "You're right rhood. I have no grasp of economics. Excuse me why I make me default slam on Sony's current state of affairs".

It breaks my heart when I realize you represent the cream of the crop amongst the 360 fanbase.

[Agent VX]

I really think that Sony makes great Monitors (T.V.'s) and great camera's. Their home audio is "O.K", more for the people who want decent quality, but not pay much. Their speakers are poor. There recent gaming console the PS3 has turned out to be a huge failure, and the sales of the PS3 are speaking volumes. Though, I do like some of the things on the console. Their portable audio is just a fraction of what it used to be.

Like the author has stated, Sony has really lost their brand, and people just don't find the value or willing to pay a "premium" for their products anymore. I still think they make great monitors, it is just that I can get equal quality and a bigger screen size for the same money.

I use my PS3 more for a bluray player, renting them at blockbuster buy not buying them as they are too expensive. Most of the games I buy on the PC or 360.

Sony isn't a premium product anymore, they lost that years ago.

[Nineball2112]

Just the fact that you (and others) can post a comment like this: "There recent gaming console the PS3 has turned out to be a huge failure, and the sales of the PS3 are speaking volumes." makes me amazed at how people can make themselves believe what they want to regardless of the facts.

That comment alone nullifies any other point you may have.

You could say that Sony has not lived up to promises... you could say that Sony has disappointed you as a gamer... you could even say that you just dislike the Sony brand...

But to spout such blatant fanboyisms such as PS3 = teh failurz.

It just makes my head hurt from the stupidity of it...

[thebudgetgamer]

16 or so million consoles in two years = epic fail

btw news for gamers or
news for economy majors
:)

[Nicolator]

we can read the article.. u dont need to cut and past.. dumbass

[I_LOVE_MYSELF]

"people just don't find the value or willing to pay a "premium" for their products anymore."

does the same apply for xbox live? if so MS must be really shafted

[ionize]

It is funny that so many people seem to be so concerned for the Sony brand when they are clearly doing extremely in spite of M$'s attempts to bring them down...You now have a renown website (Metacritic) which has been recently proven to be biased against the PS3 (making up rating scores/using different sources for reviews even though the same source may review games on both the 360 and PS3)...You have Cnet who is constantly bashing the PS3 and praising the 360, Gamestop employees lying to customers in order to sway them into a 360 purchase and you have Television shows like Xplay who openly admit they don't like the Japenese.

These are all very popular businesses who have a lot of influence and yet the PS3 is still around...It managed to put HD DVD down in record time and now has some of the best gaming experiences that are available today.

It has been an uphill battle for Sony and with every obstacle overcome, there seem to be haters adding more obstacles...so I applaud Sony for not giving up as they clearly know that they have a winning console.

[La Chance]

the gaming industry youre talking about is the very same one that was declaring early 2008 "360 is dead" , "2008 is the year of the ps3" , "the 360 cant survive in 2008" etc.

Moreover theyre just stating hardcore facts.Dont see any conspiracy in that.

[iiraymoii]

I agree with you 100%! Every one wants to forget that SONY brought us the PS1 and PS2 which were monsters,and were the dominant force. You want another choice for a console go right ahead..but dont bash and act like you never laid a finger on a SONY console and not enjoy it.

The internet, and the world need to get off their pedestal of shYt and stop acting like the 360 is a godsend. I like some games on it but, the hardware is the biggest piece of shyt in the market today and probably ever! Yet ZOMG SONY SUXORZ BLAHZ WE LEETZ!!..i wish the internet could cimmit suicide..that would be a good day lol.

[Pennywise]

ahh poor LaChance... I dont know what media you are talking about that has been saying that. That was sony fans stating all of that. Thats why here at N4G, it gets very confusing for people. You guys think that blog posts filled with opinions and predictions are news.

Sony has been fighting a uphill battle with the media. You have a bunch of site affiliated with MS is some way writing negative storys about Sony on a weekly basis. Most of it is uncalled for... but you are okay with that.

Then you have sites writing legit storys about xbox downfalls and you go up in arms, screaming to let the RROD articles die because it isnt true. If it wasnt true MS wouldnt have spent 1billion on warranties.

The PS3 is fine. These stupid articles are old. This console war is old. The bashing people who prefer one system over another is old. Its getting very trite... the whole situation.

MS strongholds companies with their shady business tactics instead of owning the competition with quality products. They are a monopoly... they are force fed people pointless, yearly software upgrades and made using a PC without windows a big hassle. So, people buy their crap and profits stay up. I cant wrap my head around why xbox is so popular... Me personally, I like to buy quality over quantity and Sony provides that.

[ionize]

It is amusing how you throw the term "fact" around seeing as I have shown "facts" at how the gaming industry is insanely biased towards Sony and you throw up a couple of generic terms regarding someone said something some time ago...I hope you are getting payed well from M$, because if you are doing this for free, you should seek help!

Edit: @iiray...

I completely agree...the 360 is one of the biggest engineering disasters (that hasn't been proven to kill anyone).

[La Chance]

euh...I think youre the one who needs help , youre the one who's paranoid not me.

Its pretty clear the media flips "sides" often.

In 2007 everybody was saying the PS3 was dead , a couple of months later the very same people were predicting the death of the 360 end 2008.

And yeah MSFT sure are paying me alot for what I do :)

I feel sorry for you because Im sure Sony cant afford to pay you for all your blind support.

[ionize]

Who are "they"...it would appear that I am at a disadvantage, just like Sony as I am limited to using something called "Logic" where you seem to have more freedom in this area. Some of the most popular media (which I have already mentioned) have been outed as "professional liars" so nothing can be taken seriously from any of them any more...ie., Gamestop/Metacritic/Cnet/Games pot etc.

[PimpHandStrong]

SUPER

im not sure if you are the one that gave us this already...i know for a fact we seen Sony slashed 57% a few days ago

this is why this site is a bit sick

We can hear about this from 20 different websites when its all the same story!

and BTW

Cnet is not owned by MS but they are partners!

[aftrdark21]

why is this posted in the 360 section?

Flamebait?

[Pennywise]

This site IS flamebait.

Just little kids constantly reinforcing their parents purchase for them. One interview = 20 articles. One financial report = 5-10 articles on N4G.

I come here to find out about game news. What games are coming... dev progress, reviews here and there, new features and what to expect... not this constant company bashing. I want to hear about games... not the BS.

[Pennywise]

aww double post.

[ionize]

It is posted here in order in hopes that it reaches a high temp so the 360 fanboys can see it on the front page when they get out of school.

[cherrypie]

"Cnet is not owned by MS but they are partners"

What are you talking about? In ever CNet article, someone comes in and says this ridiculous garbage.

CNET IS OWNED BY CBS.

Only the most naive, ill prepared, poorly adjusted child attacks the messenger and not the message.

Perhaps the SDF needs a lesson in literacy and media. Sheesh.

Oh, btw, did I mention CNET IS OWNED BY CBS.

[ionize]

The only one that claimed M$ owns Cnet was at post number 2...so why are you replying here? Also, you could argue that "owns" on paper and "owns" by accepting money can be different things

[Sharpshell]

Sony is a huge company... I wish people would stop acting like Playstation = Sony... thats like saying 360 = MS, they aren't like nintendo. Meanwhile anybody paying attention will realize that MS is in fincial trouble too. Why? Becuase of the FINACIAL CRISIS! This is terrible journalism, as is typical from CNET, it doesn't matter who owns CNET, its a giant POS. Has anybody ever found their crap useful? All their "reviews" consit of some fat moron holding item in question and explaining the very basics of the item "bluetooth headsets are for talking and listening, which this one does, heres the grade, also its blue... I like blue!"

[cherrypie]

You're being dishonest.

Yes, the financial crisis isnt helping, but Sony as a company is in very big trouble. It bet heavily on PS3 -- and no matter how much you wish otherwise, it is not going well for the PS3.

But, overall, this Sony collapse has to do with big issues within Sony. They are loosing serious marketshare in many places, not just consoles.

This isnt "bad journalism" - its you refusing to acknowledge that Sony *is* doing very poorly.

[Qfragger]

No company is immune to whats happening in the World, Wonder what MS forecast for the last quarter will be.

I'm looking to get a ps3 in a few months, lets hope a decent bundle comes to North America.

[Pennywise]

LBP bundle, KZ2 bundle, R2 bundle(one would think)

All good!

[The Lazy One]

M$ is doing pretty solid through all this compared to the rest of the market.

http://finance.yahoo.com/ec...

see?

[shawnsl65]

solid my ass, then why am i losing money? zZzz.. recession needs to die!

[The Lazy One]

if you want to make money in the short term, you shouldn't make long term investments.

Almost everything is losing money, Microsoft is losing a lot less than the market as a whole.

[shawnsl65]

dumb for investing in MS. at least my profits from Sony ps2 era can cover my loss.

[The Lazy One]

don't even pretend you're any kind of decent investor with logic like that. Sony's gaming division profits are minimal compared to the rest of the company, and Sony's d