CuteFaceJay
Member
Can someone make an edit to the green rat on life support and turn him blue then post it in this thread please, Thanks you.
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Sony’s stock value drop by about $10b after lowering PS5’s sales forecast for the fiscal year, analysts question near decade-low profit margin
- Thread starter ArtHands
- Start date
Ar¢tos
Member
Legendary Tales dev said their estimate is 1.3m.
I don't think they are taking any hit, BoM estimate is that it's not sold at a loss (Sony manufactures most of the components) and R&D wasn't that expensive (the first one had the expensive R&D, this is just an upgrade).
It's just lacking a must buy game, like Astro Bot.
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willothedog
Member
Well Sony pictures released Madame Web...
I think the major change was hardware costs not coming down anymore for the OEMs and for consumers.
Aces High
Member
The problem are the AAAA single player games with their 5+ years dev time and razor thin margins.
We know that from the Insomniac hack.
If anything, these numbers are proof that PlayStation must invest more into GAAS.
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ProtoByte
Member
As has been displayed with all of Sony's single player fare (and honestly, third party single player games too), PC releases aren't going to fix this problem. At best, they will slightly increase revenues. Most likely though, they will actually cut into margins because Sony will have to pay 30% of their revenue to Steam, and fewer people will buy PlayStations.
What needs to happen is the following:
What needs to happen is the following:
- Reasonable live service pipeline using 2nd party relations or 1st parties that are geared for it
- As traditional a console model as can be maintained (that includes returning to actual exclusives in the long run)
- General price increases and fewer and slower price drops
- More efficient dev pipeline. Cut out the fat in these studios. We all know what it is by now
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PendekarRajawali
Member
Xbox is right all along?
Roman Empire
Member
It's not surprising when set up unrealistic projections amidst a global crisis and one of the most dry periods of games from Playstation.
FunkMiller
Member
meanwhile at Nintendo
They make carefully curated single player games more than anything else.
This remains the way to be successful in the video games industry.
adamsapple
Or is it just one of Phil's balls in my throat?
Sony plunged $10 billion after its PS5 sales cut. But a bigger issue is its near decade low games margin
Around $10 billion of value was wiped off Sony's stock this week after it cut its sales forecast for its flagship PlayStation 5 console for the fiscal year.www.cnbc.com
Oof
Morbius 2 will fix this.
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P:axMagellanic
Member
Those shitty films actually have margin.
GHG
Member
It's simple, they need to get their costs under control and/or improve efficiency. It's literally what the COO said.
The rest takes care of itself. They have products that are selling, and selling well at that.
David Ricardo
Member
daclynk
Member
Cyberpunkd
Member
AV
We ain't outta here in ten minutes, we won't need no rocket to fly through space
... What point? They still released Helldivers released on PC to good success, to people who don't need to pay for a subscription. 400,000 of them on Steam at peak recently.
You think many of those people were really gonna buy it on a PS5 if forced too? Sony clearly doesn't.
Zathalus
Member
God of War Ragnarok, and Spider-Man 2 are some of the best selling games for Sony ever are they not? Doesn't seem like most PS gamers are waiting.
Edit: The issue is that BG3 cost 100 million to make while Spider-Man 2 cost over 300 million, that's really the problem. Spiraling dev costs at Playstation, not games selling less.
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Matt_Fox
Member
You're living in dreamland if you think PSVR2 has been a financial success for Sony, all those high salary people that worked to get it made, marketed and launched, and then a thin profit margin on the actual hardware which hasn't sold (and the software which doesn't exist). It's been a money pit.
Even Eric Lempel, tipped to succeed Jim Ryan, called it "a challenging category right now". Sony haven't released sales figures (I wonder why?) but you can see how dire its been on Amazon.
Even Eric Lempel, tipped to succeed Jim Ryan, called it "a challenging category right now". Sony haven't released sales figures (I wonder why?) but you can see how dire its been on Amazon.
GHG
Member
You're living in dreamland if you think PSVR2 has been a financial success for Sony, all those high salary people that worked to get it made, marketed and launched, and then a thin profit margin on the actual hardware which hasn't sold (and the software which doesn't exist). It's been a money pit.
Even Eric Lempel, tipped to succeed Jim Ryan, called it "a challenging category right now". Sony haven't released sales figures (I wonder why?) but you can see how dire its been on Amazon.
They are making it more challenging for themselves than it needs to be. The VR hardware that sells the best tends to be more open in nature.
It's still emerging tech, and those who are investing in it tend to not want to have to tie themselves down to one store/platform. It would do a lot better if they got official drivers out for the thing and partnered/cooperated with valve for SteamVR integration. Theres no other headset in that price category with OLED displays, eye tracking and foveated rendering.
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Spirit Icana
Member
The forecast and investments are not something to get too carried away with. Game investors suck at predicting the future. They hop on bandwagons, and drop off as soon as nobodies start saying other stuff on Social Media. Sony had a tough goal they set for themselves, and missed it, but that's not the real problem. The problem is the record low profit margins. That's the real story here with future implications. They are spending a ridiculous amount of money on development on these games, but the returns don't justify it.
Super Mario Bros. Wonder has now surpassed Spider-Man 2 worldwide in sales. Both have crossed the 10 million mark, but one was significantly cheaper to make than the other. Now I can talk about my problems with Insomnaic's Spider-Man all day, largely game-play related, but the costs are driven up by the cutscenes, mo-caps, endless voiced dialogue (in multiple languages), and the like, much of which don't impact the player experience one way or the other (except the dumb walking sections). Much wasted resources. I'm surprised they got away with some of the political commentary they have in the game too. Too many inside these studios think they are smarter than they really are, and feel the need to preach through their craft unchallenged. Bryan Intihar needs to reign himself in, and the choir inside the Insomniac church who validate each other, or higher powers will start doing it for him.
Of course, the issue goes well beyond Spider-Man (the biggest IP), as Horizon (fresh IP) was ridiculously expensive too, as was God of War, all of which share a template with a ton of expensive cinematic's, extended game-time lengths, but little replay value. Player engagement with these games probably bounce off pretty quick too. There is no compelling reason to justify these games to be as expensive to make as they are. The player-bases aren't big enough to support it. Now the company has suggested looking beyond their own PS5 to help expand the user bases of these games, so I guess we won't see much impact on this direction for a few more years yet.
Super Mario Bros. Wonder has now surpassed Spider-Man 2 worldwide in sales. Both have crossed the 10 million mark, but one was significantly cheaper to make than the other. Now I can talk about my problems with Insomnaic's Spider-Man all day, largely game-play related, but the costs are driven up by the cutscenes, mo-caps, endless voiced dialogue (in multiple languages), and the like, much of which don't impact the player experience one way or the other (except the dumb walking sections). Much wasted resources. I'm surprised they got away with some of the political commentary they have in the game too. Too many inside these studios think they are smarter than they really are, and feel the need to preach through their craft unchallenged. Bryan Intihar needs to reign himself in, and the choir inside the Insomniac church who validate each other, or higher powers will start doing it for him.
Of course, the issue goes well beyond Spider-Man (the biggest IP), as Horizon (fresh IP) was ridiculously expensive too, as was God of War, all of which share a template with a ton of expensive cinematic's, extended game-time lengths, but little replay value. Player engagement with these games probably bounce off pretty quick too. There is no compelling reason to justify these games to be as expensive to make as they are. The player-bases aren't big enough to support it. Now the company has suggested looking beyond their own PS5 to help expand the user bases of these games, so I guess we won't see much impact on this direction for a few more years yet.
skyfall
Member
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FunkMiller
Member
I wonder what the reason why PSVR2 isn't selling all that well could possibly be?
HINT: It's the same reason other games consoles don't sell well.
RGB'D
Member
Not if they can't afford to make them anymore. If they release games that sell 10 million but barely have a margin of profit, it just takes one thing going wrong to sink the whole thing
Kenpachii
Member
- Reduce development teams
- Relocate to country's where development cost a lot less
- Hard cap budgets on games can't get over 10-20 million a pop and make 15 games out of that one spiderman game.
- Introduce AI and start sharing assets throughout the company studio's entirely. No need to recreate a chair 30 times over.
- Everybody use the same engine mo-caps etc and everybody developes for said engine inside sony.
- Put aggressive time limits on games, 2 years max.
There u go i solved your problems.
- Relocate to country's where development cost a lot less
- Hard cap budgets on games can't get over 10-20 million a pop and make 15 games out of that one spiderman game.
- Introduce AI and start sharing assets throughout the company studio's entirely. No need to recreate a chair 30 times over.
- Everybody use the same engine mo-caps etc and everybody developes for said engine inside sony.
- Put aggressive time limits on games, 2 years max.
There u go i solved your problems.
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twilo99
Member
After seeing the sales in Spain and Portugal this is a complete shock..
Most major tech stocks have very similar price action post 2012/13
Most major tech stocks have very similar price action post 2012/13
Cyberpunkd
Member
Yes, they make great games and are very successful sales-wise, they problem is it costs too much to make these games.
balls of snow
Member
Sony shouldnt have let him go. Pay him what he wants and hold on for dear life. He would have a balance approach to gaas, smaller AA games and big blockbusters AAA throughout the years like what we had 2016-2020.Remember Shawn Layden?
He has been warning them for years.
kyussman
Member
I was just thinking back to the PS3 and games I played like,Singularity,Enslaved....Odyssey to the West,Binary Domain,Alice Madness Returns,Remember Me.....all polished interesting games that didn't need to be the next big thing and could just exist as good games well worth playing......feels like there is a giant hole in the industry that games like this once occupied,Sony should bring them back.
It's not just that, it's also the fact that they spent $300M on Spider-Man 2 but only made $75M from it.
It's EXTREMELY risky to spend that much and not make more profit.
Especially since the CEO of Sony said:
Even he's wondering where the money is going as a whole.
Also, funny titbit of info... Spider-Man 2 cost more to make than they spent on Insomniac.
Audiophile
Member
The sales adjustment is a fart in the wind in the grand scheme of the generation, yet the temporary value lost panicking over it is considerable.
People...
People...
twilo99
Member
Sony is way too dependent on PlayStation, they need to diversify their revenue stream..
That optimistic projection most likely drove the stock price up, so when the target is missed, you get a correction.
That optimistic projection most likely drove the stock price up, so when the target is missed, you get a correction.
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StereoVsn
Member
Yeah, costs on that are just puzzling. It is reusing assets, using a lot of other things like basically enhancing their dev pipeline from Spider-Man 1 and Miles, same but enhanced engine.
It’s not some 100 hour RPG either. Like what the hell generated that kind of spend. That Sony COO/CEO was right to start taking a hard look.
cash_longfellow
Member
It’s almost like stock prices fluctuate or something. This happens with literally every publicly traded company.
GHG
Member
There's no reason why they shouldn't be able to. It's not selling well regardless.
SplunkyMunkey
Member
Because playstation gaming division does better then all the divisions within sony. What sony should do is create good games that us consumers would love to see. I would love to see killzone as battlefield style. I would love to see sony buy Command & Conquer IP off EA and remake Red Alert 2 with yuris revenge I'm sure that was do well as a gaas title aswell as killzone battlefield
Cyberpunkd
Member
They lost almost 7% in the last 5 days, this is way too much to be a simple fluctuation and is directly related to their performance.
marjo
Member
Or, for a large number of players, they simply wouldn't play it, and Sony would get $0 from them.
Fabieter
Member
And future projections don't look better either even with some fanboys thinking that pc will be the solution.
Mibu no ookami
Member
That's mostly due to Kaz Hirai excellent leadership as Sony Group CEO. Someone more versed than me likeMibu no ookami or @thicc_girls_are_teh_best can probably provide way deeper insight into this topic.
Sony's recovery came from them getting out of categories they were just not succeeding in and refocused in areas that work more.
Don't love it, but it worked.
Sony sold Vaio in 2014. Which I think was short sighted given the state of the industry, but it allowed them to focus on areas with better ROI. You had the recovery of the the tail end of the PS3 footnoted by TLOU and you had the start of the PS4 being truly very success in a digital age where PSN hit full maturity as a retailer.
The PS4 store for example will probably never die like the PS3 and PSP store.
Sony also really hit big with the sensor business with the rise of smart phones.
Sony also hit it out of the park with deals with Marvel to really hit big again with Spider-Man. That combined with Jumanji, Venom, and the success of the Bond movies which they no longer have, really set them on a path towards profitability.
I think this 10 billion drop is largely an overreaction. Sony is such a small player in a lot of entertainment areas, but their planning has been largely successful. You could argue that they were overvalued, but I think given Microsoft's position in gaming and the impact that will have on Sony, SIE is a company that is going to see a lot of growth in the next 5 years. They can't get things wrong with their next CEO.
They need their own Kevin Feige and they need someone who can really usher in success at these studios in a way that Herman Hulst just isn't doing.
Take 2 lost 9% since last week or so, Nintendo 6%. Ultimately everything will be fine.
twilo99
Member
GaaS games are the answer here?
BennyBlanco
aka IMurRIVAL69
Media Molecule is cooked. Stick a fork in them. I just hope Housemarque remains unscathed.
Mibu no ookami
Member
You're living in dreamland if you think PSVR2 has been a financial success for Sony, all those high salary people that worked to get it made, marketed and launched, and then a thin profit margin on the actual hardware which hasn't sold (and the software which doesn't exist). It's been a money pit.
Even Eric Lempel, tipped to succeed Jim Ryan, called it "a challenging category right now". Sony haven't released sales figures (I wonder why?) but you can see how dire its been on Amazon.
I think you have to ask yourself some better questions here.
First Eric Lempel is definitely not tipped to be the next CEO. That Totoki has given himself a year to find Jim's replacement suggests a lack of confidence in Eric. This was propelled by Totoki saying SIE doesn't understand the role they play in growth.
Second, what was the R&D budget on PSVR2. Are the units sold at a profit or for loss? Has it made them their budget back? Is it trending to do so?
PSVR2 is a middle step for Sony. I've talked a lot about the form factor that PSVR3 probably needs to have.
- Wireless
- Improved lens
- Stand-Alone
- Support PS6 and PC
PSVR2 is about in my estimation building a new base of VR since PSVR1 was so heavily reliant on the move which is technology they aren't going to support moving forward.
That doesn't mean it can't sell well though. The biggest things to consider is that PSVR2 is still really expensive.
You're looking at a minimum of 1050 to get into PSVR2. That's a lot for RE4 and GT7 to carry on their own.
A couple of things can really help PSVR2 though before we get to PSVR3
- Price cuts to both the PS5 and PSVR2
- PS5 dropping to 400 and PSVR2 dropping to 400 bundled with RE4 or GT7
- Ace Combat 7 VR release
- Generally more promised AAA games in VR
- PS5 Pro that takes PSVR2 further than what we've seen on the market for VR gaming