#1 Posted by playastation (213 posts) -

Do you guys perceive how well MS or Sony are doing based on the perceived success of the consoles? Or do you guys separate how well the company's are doing outside of these ventures.

There is perception that Microsoft is doing really poorly and moving in a bad direction and is going to fail while Sony is doing all things right and is coming out on the opposite end. But if you look at the companies as a whole, this couldn't be further from the truth. Sony is doing TERRIBLE financially (I say terrible) while Microsoft is still making money hand over fist. If you look at their stock prices in the last 10-years, Sony was as high as 46 dollars per share in 06, to 16 dollars now, while Microsoft has gone from 20ish dollars, to 40ish dollars now.

While I don't have either of the new consoles at this point, I just thought I'd comment to what I've been seeing and wanted to ask about the general perception of the companies.

#2 Posted by Oldirtybearon (4816 posts) -

Yeah the problem is that the Microsoft we're talking about (the Xbox division) is a different animal than Microsoft (the overall software/computer giant). Same goes for Sony. While Sony as a whole is in terrible shape, the Playstation division is actually their most profitable venture right now, while the Xbox division hasn't, to my knowledge, made any money yet* and there are constant rumours about Microsoft (software/computer giant) wanting to sell it off or spin it off into its own company.

*from my understanding, the Xbox Division hasn't made a profit yet. They would have with the launch of the Xbox 360, but that whole RROD thing set them back by a couple billion.

#3 Posted by playastation (213 posts) -

@oldirtybearon: I actually thought it's interesting to note. But if you look at their financial statements from 2013, they made 57 billion in revenue, and roughly 10 billion of that was the 'Entertainment Division'. Which includes Xbox, Skype, Windows phone. It'll in there together.

In total, their PROFIT, was 21 billion. While the entertainment division made around 800 million of it. Xbox is actually small change to them. Let alone the fact that 9 billion of their entertainment revenue is lost as expenses. It makes sense that analysts always spin it into saying they should sell it off.

#4 Edited by Splodge (1626 posts) -

Not sure how accurate this is, but I think I heard someone say on a bombcast that Nintendo makes as much money off selling insurance / something else through their other ventures as they do from the consoles. Or did I get that completely wrong?

#5 Edited by xyzygy (9999 posts) -

As far as the actual companies go, Microsoft is a much more profitable company than Sony. As far as the gaming divisions go, I'm pretty sure they're both profiting. Sony is selling more consoles but that has a lot to do with Microsoft's fumbles, which they are totally getting back on track with. Sales of the console apparently doubled in June, the first month after they started offering the Kinect-less option. That's pretty impressive.

#6 Edited by Brodehouse (9953 posts) -

@splodge said:

Not sure how accurate this is, but I think I heard someone say on a bombcast that Nintendo makes as much money off selling insurance / something else through their other ventures as they do from the consoles. Or did I get that completely wrong?

I'm sure at this point Konami makes more off their spa resorts.

#7 Edited by MB (12438 posts) -

*from my understanding, the Xbox Division hasn't made a profit yet. They would have with the launch of the Xbox 360, but that whole RROD thing set them back by a couple billion.

The Microsoft Entertainment Division has been profitable for a long time, just not hugely so. They've also been making a profit on every Xbox One sold since the first one, unlike 360 where it took a few years for that to start happening.

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#8 Posted by Brodehouse (9953 posts) -

Seems like Bing would qualify as a catastrofuck.

#9 Edited by xyzygy (9999 posts) -

@brodehouse said:

Seems like Bing would qualify as a catastrofuck.

I don't know what they did in 2013 but it seems to be working. That change is kind of drastic.

#10 Edited by playastation (213 posts) -

@mb: wow. all that to make bing look like google

#11 Posted by MB (12438 posts) -

@xyzygy said:

@brodehouse said:

Seems like Bing would qualify as a catastrofuck.

I don't know what they did in 2013 but it seems to be working. That change is kind of drastic.

Windows 8 with built in Bing search started becoming common? Plus Surface tablets with default Bing.

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#12 Posted by BlackLagoon (1436 posts) -

@mb: There's been a lot of claims that the Entertainment (and Devices) division's real losses are being hidden by Microsoft's Android patent licensing deals though. They're apparently getting several dollars from each Android phone sold by most of the major manufactures (including Samsung), which is basically pure profit.

#13 Posted by Pezen (1607 posts) -

@playastation said:

Do you guys perceive how well MS or Sony are doing based on the perceived success of the consoles? Or do you guys separate how well the company's are doing outside of these ventures.

There is perception that Microsoft is doing really poorly and moving in a bad direction and is going to fail while Sony is doing all things right and is coming out on the opposite end.

I separate them out and look more at how the products are looking side by side, because I find that more interesting.

I think that specific perception isn't so much a matter of Sony vs Microsoft, but Playstation 4 vs Xbox One. At least, I haven't read much talk about the companies as a whole mirroring your example. But looking at their consoles, the concept of Sony doing better than Microsoft is certainly out there.

#14 Posted by Splodge (1626 posts) -

@mb said:

@xyzygy said:

@brodehouse said:

Seems like Bing would qualify as a catastrofuck.

I don't know what they did in 2013 but it seems to be working. That change is kind of drastic.

Windows 8 with built in Bing search started becoming common? Plus Surface tablets with default Bing.

Yup, I use a surface tab, and the bing search is actually decent. It's similar enough to google that I don't really notice the difference. Plus, I find Bing better for video searches.

#15 Posted by playastation (213 posts) -

@pezen: Some of the more interesting thing to think about during early adoption is what if Sony had some sort of catastrophic hardware failure like the red ring. I'm not sure they could honor the recalls and fixes like Microsoft can. That being said. Sony NEEDS this to work, or they're hooped. So they're doing everything in their power to make sure it does.

#16 Posted by Oldirtybearon (4816 posts) -

@mb: I stand corrected.

#17 Edited by playastation (213 posts) -

@splodge: It looks like 15% of Sony's revenues are from financial services.

Also based off of Sony's 2013 Annual Report: http://www.sony.net/SonyInfo/IR/financial/ar/2013/shr/pdf/AnnualReport_E.pdf

Sony's Profit from its game division was 1.7 billion yen in 2013. Which is...$16,748,536. Unless I'm reading that wrong. That's not very much money.

#18 Edited by EXTomar (4745 posts) -

As one analyst put it: Everyone in the market knows that Microsoft used to point and laugh at IBM saying how the only innovative thing that dinosaur could do is buy companies and collect their patents and customers. Everyone in the market knows now that best thing Microsoft does today is buy up companies and collecting their patents and customers.

For more than a decade now, high profile product after high profile product has failed sometimes specularly. Microsoft does okay because of their corporate support and business lines rake in so much money. For all of his issues, the big thing Balmer did right is build business units to maximize any revenue they had access too. This does no favors for the individual consumer nor does much of the tech actually translate easily into consumer products. The most innovative thing Microsoft has created in the last decade was the entire XBox line and a lot of that was bought out and re-purposed and it still has issues. Now it is a sunk cost situation where to abandon it now is too costly but to keep it going isn't that profitable either.

Sony has been a shell of its former self due to multiple issue where a major one is that it is a Japanese company that easily gets into situations where it ends up heavily leveraged. On the one hand that means they are fairly secure because they are "too big to fail" but that also means the poor practices management makes stay around because they are not failing.

In either event, if you want to see innovative companies you should look towards Samsung and Google because although they are huge corporations they are build in such a way to be much more agile than Sony who is hamstrung and Microsoft who is a plodding dinosaur.

#19 Edited by playastation (213 posts) -

@extomar: The thing about Sony is that I think if it did get REALLY bad, their government would bail them out American recession style due to their name and size. That being said,

2013

Microsoft Entertainment (This is Xbox, Skype, and Phones... so take this with a grain of salt)

$10.1 Billion Revenue

$848 Million Profit

Sony Games Division (Hardware and Software)

$6.9 Billion Revenue

$16 Million Profit

Just based on cost vs profit in general. You can see why Nintendo probably steers clear of the hardware war. And why analyst keep saying they aren't gonna make boxes anymore. That profit can go REAL deep into a loss really fast.

#20 Posted by MonkeyKing1969 (2777 posts) -

In the US we say GM, Ford, and Chrysler are too big to fail; and I sort of wonder if in Japan Sharp, Panasonic and Sony are too big to fail. Because they would fail really, they would get sold for their names and properties & patents, so unless their buyers are in Japan - they WON'T get sold. Thus, no matter how you slice it Sony might get smaller but it will never fold, declare bankruptcy, or be sold to outside control.

Sony isn't really losing its lunch to Canon, Casio, Citizen, Fujifilm, Fujitsu, Hitachi, JVC Kenwood, Mitsubishi Electric, NEC, Nikon, Olympus, Panasonic, Pioneer, Ricoh, Seiko Group, Sharp, TDK and Toshiba. Sony and all the rest above collectively are losing to China, Korea, and to a lesser extent United States and India. But, while some might fall, I rather doubt Japan will let Sharp, Panasonic, JVC, Sony, Mitsubishi Electric, NEC or Toshiba go under. Hey that's just my theory, but I think it pretty solid logic.

So do I worry about Sony? Nope. I wouldn't really worry anyway, but I think Japan would string out a safety net that would save the post-war industrial giants of Japan.

#21 Posted by CornBREDX (5323 posts) -

No, I look at companies as a whole. Their console branches are (both sides) only part of a larger whole.

Sony makes other things than video games and while they may dominate this console generation (at least for now) their company as a whole is struggling. The stock prices you quoted are representative of that.

I suppose a younger reader, or someone that prefers to stay ignorant of what all a company that makes consoles does other than making consoles, may look at it differently, though.

If the console companies listed were solely focused on consoles it may be a different story. That isn't realistically feasible for a lot of reasons, though.

#22 Posted by Sergio (2131 posts) -
@xyzygy said:

Sales of the console apparently doubled in June, the first month after they started offering the Kinect-less option. That's pretty impressive.

I'm not sure if it is that impressive. Some people have questioned doubled in what respects, without receiving any clarification from Microsoft. Even with the "doubling", they still were outperformed by the Playstation 4, with the increased sales possibly being temporary, as some potential sales in May shifted to June in anticipation for the new SKU. We would need to see how their sales are in July to really determine how impressive this is.

I will add, that regardless of this, the Xbox One is a success based on its sales alone compared to the Xbox 360. The difference between it and the PS4 factors more into which console third parties may consider as a lead platform in the future based on their respective install base, and possibly Microsoft's eagerness to money hat developers and publishers for an advantage to make up ground - hasn't worked yet.

Regarding the OP's questions, I separate between the companies as a whole and their divisions. While Sony is weaker financially compared to Microsoft, I find that the ones who tend to like to speak all doom and gloom about them and how it relates to the PS4 tend to come off as Xbox fan boys. The company isn't going any where any time soon, and neither is the console. Likewise, even though the Xbox One is the weaker console of the two, it is successful and profitable enough that it isn't going anywhere, even if Microsoft were to spin it off into its own company. Those that think the Xbox One is doomed because the PS4 has outsold it every month except one where supply was limited look like Playstation fan boys.

#23 Posted by Blu3V3nom07 (4213 posts) -

@xyzygy said:

As far as the actual companies go, Microsoft is a much more profitable company than Sony. As far as the gaming divisions go, I'm pretty sure they're both profiting. Sony is selling more consoles but that has a lot to do with Microsoft's fumbles, which they are totally getting back on track with. Sales of the console apparently doubled in June, the first month after they started offering the Kinect-less option. That's pretty impressive.

#24 Edited by EXTomar (4745 posts) -

There is weak collusions across the entire Japanese economy between private and public sections. This works great for the 80s. Not so much in the 90s when the economy stagnates while the rest of the world grew. That is the famous "Lost Decade" where so many private businesses where too fat and spending way to much money in operation relative to what they were taking in but none of them were allowed to fail due to those CEOs knowing the right people in the banking system and in government. The entire "circle jerk" kept things locked for a decade where business supported politicians who kept banks at bay and the politicians got the support they needed from the businesses while damaging the economy on the whole for the regular main street Japanese family (maybe a cautionary tale for the US?).

Sony is in that same system but in today's modern banking governance it is a little better where they aren't allowed to perpetually loan and finance whatever Sony wants but they also won't put pressure on Sony either. This allows them to march up to "the line" and although they haven't gone over "the line" that isn't exactly the best place to be to adapt or react.

Back to Microsoft, it should be noted one of the things killed along with 18,000 jobs is a bunch of periphery XBox stuff which I think is a good idea. This is time, money, and energy they should waste right at this moment where if it isn't going into making a game better then they probably shouldn't fund it. And just like it was pointed out in the Jimquisition thread, it is fine to correct things but acting like everything is according to plan is an outright lie and it is a message no one believes which is the real issue when it comes to the question of perception. No one is going to believe the 18,000 they are getting rid of will really fix anything if they pulled the same fire/rehire crap they pulled in 2008. No one is going to believe anything has changed unless the new CEO brings in new management across the top of the board including Entertaining and Consumer Products. The emperor has no clothes where saying things like "our growth potential is huge" makes people roll their eyes because in some areas they are so far behind any minuscule growth is technically "huge".

#25 Posted by Hailinel (24882 posts) -

@sergio said:
@xyzygy said:

Sales of the console apparently doubled in June, the first month after they started offering the Kinect-less option. That's pretty impressive.

I'm not sure if it is that impressive. Some people have questioned doubled in what respects, without receiving any clarification from Microsoft. Even with the "doubling", they still were outperformed by the Playstation 4, with the increased sales possibly being temporary, as some potential sales in May shifted to June in anticipation for the new SKU. We would need to see how their sales are in July to really determine how impressive this is.

I will add, that regardless of this, the Xbox One is a success based on its sales alone compared to the Xbox 360. The difference between it and the PS4 factors more into which console third parties may consider as a lead platform in the future based on their respective install base, and possibly Microsoft's eagerness to money hat developers and publishers for an advantage to make up ground - hasn't worked yet.

Regarding the OP's questions, I separate between the companies as a whole and their divisions. While Sony is weaker financially compared to Microsoft, I find that the ones who tend to like to speak all doom and gloom about them and how it relates to the PS4 tend to come off as Xbox fan boys. The company isn't going any where any time soon, and neither is the console. Likewise, even though the Xbox One is the weaker console of the two, it is successful and profitable enough that it isn't going anywhere, even if Microsoft were to spin it off into its own company. Those that think the Xbox One is doomed because the PS4 has outsold it every month except one where supply was limited look like Playstation fan boys.

According to Microsoft's quarterly earnings report, they shipped 1.1 million X1/X360s worldwide combined in the past quarter (that's shipped, not sold), and they did not state how many units sold. If sales "doubled" in June as Microsoft claims, then they doubled from a number that was pitiful to something apparently less pitiful but still not great.

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#26 Posted by spraynardtatum (2977 posts) -

The hivemind's perception of both companies is constantly changing.