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

[ethomaz]

Not really. If your revenue is higher than the year before and you still make profits. Therebis absolutely no way less revenue with higher profit is better. That extra cash needs to go somewhere than devaluate

Less revenue with higher profit will be always better than higher revenue and less profit.
Business 101.

If a company had 1B revenue and 200m profit last quarter but this quarter they had 2B revenue and 100m profit then something really bad happened.
You can't grow your revenue using your profit margins.

What you saw in last quarter on Sony was...

+ Revenue rise
- Costs rise
- Profits killed
- Margins killed

A company is not a clarity business... they needs margins... drop in margins like happened with Sony is really bad if you don't take action to fix it the next quarters.

 

[JAHGamer]

This person also called him out for his hypocrisy. Just like you did. Lol

The argument that "these people were never going to buy ps5s anyway" is so dumb....Who cares about those people? Those aren't customers you should be interested in. There are millions of people who might've bought a ps5, but now see they have no reason to and will forego one in favor of a PC or steam deck. And there goes every 3rd party game, dlc, and microtransaction sale for the next 5+ years ....

The games have not been amazing. Sequels mostly.

I see you've been sipping the Colteastwood kool-aid more than usual lately

 

[ForzaJuve]

That's incredible, only 6% margins?! With so much of the distribution being digital, I wonder why they are so inefficient. They mentioned production costs rising, are they related to DEI? Their chasing after games as a service is definitely felt because there's barely anything releasing, and whatever is actually released, it doesn't look much different than what came before with massively less investment (Spiderman 1 vs 2).

 

[JAHGamer]

That's incredible, only 6% margins?! With so much of the distribution being digital, I wonder why they are so inefficient. They mentioned production costs rising, are they related to DEI? Their chasing after games as a service is definitely felt because there's barely anything releasing, and whatever is actually released, it doesn't look much different than what came before with massively less investment (Spiderman 1 vs 2).

It's definitely the DEI junk, that stuff needs to go. They did a whole sensitivity training/inclusivity studies and STILL got the Puerto Rican flag wrong. I'm not even one of the super anti-woke people, but it's gotten ridiculous. This stuff has no place in any work environment, common sense and human decency is something your parents should teach you, not your employers. It's nothing but virtue signaling and pandering that wastes precious time and money. No one actually learns anything useful, it just makes them feel better, and gives otherwise useless people a job they shouldn't have. Companies spends millions on this crap annually.

 

[Gods&Monsters]

Not sure if addressed, why the low profit margin? Re-investment? Amortising capital purchases like studios??

People are saying it's because they are still paying for Bungie, the Playstation division.

Sony HQ sabotaged themselves and made the numbers look bad. It's like they hate Playstation.

Activision was not paid by the Xbox division.

 

[Darth Vader]

never stopped being relevant

"Spoiler alert: don't update" - TheFloW sets the PS4/PS5 scene on fire once again - Wololo.net

Famous PlayStation hacker TheFloW has come to twitter with those simple words today: “Spoiler alert: don’t update”. It is extremely likely he has yet-undisclosed exploits for the PS4 and/or PS5 coming our way. There...

wololo.net

You cannot play pirated games on a PS5. Cut the bullshit, you know you're wrong. Even proper homebrew is impossible at the moment.

It's definitely the DEI junk, that stuff needs to go. They did a whole sensitivity training/inclusivity studies and STILL got the Puerto Rican flag wrong. I'm not even one of the super anti-woke people, but it's gotten ridiculous. This stuff has no place in any work environment, common sense and human decency is something your parents should teach you, not your employers. It's nothing but virtue signaling and pandering that wastes precious time and money. No one actually learns anything useful, it just makes them feel better, and gives otherwise useless people a job they shouldn't have. Companies spends millions on this crap annually.

Agree 100%.

 

[Darth Vader]

Less revenue with higher profit will be always better than higher revenue and less profit.

Disagree. It's all contextual.

If you have an increase in revenue with a decrease in profit because you've made a substantial investment, being on a new product line, new market, acquisition, etc, that's ok.

However, if you have an increase in revenue with decrease in profitability without a substantial material change in investments, you have a problem.

Same way that a decrease in revenue with an increase in profitability can be either good or bad.

 

[nongkris]

Has this thread really devolved into using the DEI buzzword onto why the largest super hero license in the world costs so much? "Gamers" have really lost the plot. Just admit that Marvel and the Disney license costs an arm and a leg and stop trying to drag your alt right politics into it.

 

[Zzero]

like, the AUDACITY to charge us 70 for a game, then sell a better version of the game for 60 on PC, not putting any type of protection on the release leading to the game being easily cracked just MINUTES after its release on PC, and i'm not even going to mention the fact we have to pay PS Plus to play a game like Helldivers 2 and PC players don't need to spend a cent on it to be able to play online on the *shockingly* SAME servers

Meanwhile in the red square Nintendo has to deal with leakers putting out pirated PC versions of their games prior to their official release and is still kicking Sony's ass. Somehow I don't think thats what is making the difference.

 

[nongkris]

Meanwhile in the red square Nintendo has to deal with leakers putting out pirated PC versions of their games prior to their official release and is still kicking Sony's ass. Somehow I don't think thats what is making the difference.

Lol Nintendo dealing with hard to install emulators and roms is not the same as Sony giving all of their exclusives over to the biggest PC storefront and pirates willingly.

The amount of people that pirate Nintendo games on PC is insignificant. Nintendo's profits comes from their games being AA in costs while selling a fuckton and for high prices.

 

[JAHGamer]

Has this thread really devolved into using the DEI buzzword onto why the largest super hero license in the world costs so much? "Gamers" have really lost the plot. Just admit that Marvel and the Disney license costs an arm and a leg and stop trying to drag your alt right politics into it.

I'm not alt right, not even close. I was accused of being woke a while ago on this forum.... The DEI stuff has a lot to do with it, Spider-Man 2 costing 3x more than Spider-Man 2018 has nothing to do with anything actually technical related....

 

[ethomaz]

Disagree. It's all contextual.

If you have an increase in revenue with a decrease in profit because you've made a substantial investment, being on a new product line, new market, acquisition, etc, that's ok.

However, if you have an increase in revenue with decrease in profitability without a substantial material change in investments, you have a problem.

Same way that a decrease in revenue with an increase in profitability can be either good or bad.

Investments are posted as costs?
Maybe are you talking about R&D?

But if Sony had any big R&D posted they should talk about it in docs.

 

[Snes nes]

Has this thread really devolved into using the DEI buzzword onto why the largest super hero license in the world costs so much? "Gamers" have really lost the plot. Just admit that Marvel and the Disney license sucks and stop trying to drag your alt right politics into it.

DEI hires are what will crash these companies. They do this to raise the value of the company by just hiring people to create a simple html button that links to a specific site. What happens is that their products will falter and become unusable. Facebook twitch etc may as well be unprofitable and their massively overvalued due to this market manipulation. It'll result in sony crashing their company due to overspending. Personally I don't see how tech can sustain itself if it follows this route. Subscription services and AI aren't going to fix any of this. Ai's been around for decades its a minor reason and as of now cannot replace a real worker. Tech has to fix this by properly spending on things that mean something to their consumers. Disney has also felt the burn of doing this as well their stock is crashing and if it continues a replacement will be in order. The market can very easily fix itself by making better decisions and finding ways to bring down cost.

 

[ethomaz]

I'm not alt right, not even close. I was accused of being woke a while ago on this forum.... The DEI stuff has a lot to do with it, Spider-Man 2 costing 3x more than Spider-Man 2018 has nothing to do with anything actually technical related....

Well…
This forum told me ERA is woke sometime ago.
I was like “what”?

People mistake what woke really means… I couldn’t find a proper definition either… I’m still trying to understand it.

BTW ERA is mostly liberals / right wing imo.
They are just weird enough to take some causes as left wing like the Hogwarts boycott

 

[JAHGamer]

Well…
This forum told me ERA is woke sometime ago.
I was like “what”?

People mistake what woke really means… I couldn’t find a proper definition either… I’m still trying to understand it.

BTW ERA is mostly liberals / right wing imo.

resetEra is a joke, calling that site liberal is an understatement. And I think you mean left wing, not right. The average liberal would be seen as a right wing extremist to them. But I don't wanna make the thread political.

 

[Darth Vader]

Investments are posted as costs?
Maybe are you talking about R&D?

But if Sony had any big R&D posted they should talk about it in docs.

Oh, I agree Sony's results are not healthy! I was just mentioning that it's all contextual. Investments are not necessarily R&D, and would not show in the same item in a quarterly or yearly report.

 

[ForzaJuve]

Has this thread really devolved into using the DEI buzzword onto why the largest super hero license in the world costs so much? "Gamers" have really lost the plot. Just admit that Marvel and the Disney license costs an arm and a leg and stop trying to drag your alt right politics into it.

Accusations of political leanings are useless. I'm looking at both GAAS and also DEI as drivers for increased cost.

Why GAAS? Well, it's obvious that a huge production pipeline that doesn't release anything amongst multiple studios is going to result into enormous costs.

DEI adds useless cost, in terms of trainings, enormous increase in production costs, salaries, loss of productivity and hiring of external useless third parties like Sweet Baby or internal sensitivity readers. It's hiring useless people that do nothing except add cost and make production more difficult.

Other reasons could be that they are still leveraged from acquisitions. I don't know who thought that paying that much for Bungie was a good idea.

Anyway, it is absolutely INSANE that Sony has such a tiny profit margin and something has to be done about it.

 

[Gamernyc78]

resetEra is a joke, calling that site liberal is an understatement. And I think you mean left wing, not right. The average liberal would be seen as a right wing extremist to them. But I don't wanna make the thread political.

Thnks, please let's don't.

 

[Systemshock2023]

Eventually all companies will have to dial down on the graphics arms race and follow Nintendo's approach. I could have gotten 2 college degrees in the timeframe between Arkham knight and suicide squad.

A kid born when GTAV released will be 12 by the time VI is out. 12 years is also the time between SNES release and GTA Vice City to give you an idea.

 

[Gamernyc78]

Eventually all companies will have to dial down on the graphics arms race and follow Nintendo's approach. I could have gotten 2 college degrees in the timeframe between Arkham knight and suicide squad.

A kid born when GTAV released will be 12 by the time VI is out.

Of there is no distinction and no variety in tht sense gaming industry will suffer either way. There's a reason "I" hardly buy Nintendo software.