Sony Or Microsoft to Bow Out of Next-Gen Console Race, Predicts Gaikai

[admartian]

lol in almost predicatble fashion, 'so and so' predict Sony failures. Come on guy, gotta throw us a curve-ball once in a while.

[claud3]

Gaikai got what he wanted us and others talking and putting the attention on him or them

[Jo-san]

I agree with a lot of what you're saying. But SCE has become and will always be a massive, massive part of Sony Corp. If they went out of the video game business, it would be because the entire ship is sinking. There are definitely other Sony divisions that would get the axe before SCE, that's for sure.

According to Sony's latest figures, Sony's gaming products accounts for around 11.1% of Sony Group revenue, which is around the same as Sony Financial Services, but less than the revenue generated by the Television business (16.7%). Yet despite this, there has been speculation in investment circles and the media of the TV business being sold off. No business division small or large in any international conglomerate is immune because money is a finite resource.

A key predicament going into next generation is that Sony lacks the dominant platform that it held with the PS2. More disconcerting is that this generation has seen a transfer of market share and cash-generating potential away from Sony towards Nintendo and Microsoft; i.e. Sony?s competitors have gained momentum and confidence at the expense of Sony.

It also comes back to a couple of my posts from last year questioning the quantity of titles released, acquisition of supplementary studios, free online, price drops, etc.. When all these actions lead to a drain of cash reserves, add operating costs and lower margins.

It is thus critical that Sony concentrates on profitability; Sony is no longer in a position to stomach another botched high-priced, loss-making hardware launch which would undoubtedly lead to a retrenchment of future gaming capital expenditure.




AaronSOLDIER - The Financial Services, Music and Pictures divisions comprise the core areas which have consistently generated profits for Sony over the last few years.

[Soldier 95B]

Well, we already know that MS is literally swimming in profits from the Xbox 360 and the games/movies software as well as the DLC. They LOVE that, as it is one of their few profitable business areas. With so much focus on core and casual gamers, and such a spectacular library of games (and the phenomenal sales), it is a no brainer. They have focus now, and it is paying off...though it's draining my wallet . Being a core gamer has never been so much fun for me.

As for a PS in the next gen, FOR SURE they will have one. It's Playstation, and everyone wants it. The current consoles are so old and dated in hardware that developers are going to be the ones that push them to release them sooner than later.

[TGO]

Soz Playstation is Sony's bread & butter at the moment, and despite their financial problems Sony is still gonna make The Amazing Spider-Man, MiB3 sign new record deals with new artists, continue pushing their Xperia brand & eventually release a new console.

What you gotta look at is who benefits from what, I don't see any of them dropping out....but I expect MS to have a more layed back approach, they've failed to dominant twice, but has got a cash cow & a base now, so pointless wasting anymore millions trying to be number 1 & just go with the flow
Sony on the other hand needs Playstation & needs to step up to get things rolling high again.

[sainraja]

People have been saying that Sony's is doomed every since the PS3 came out. Now that the X360 is successful, they've added Microsoft to the list as well.

If another company enters, say Apple....and makes the same kind of mark in the gaming industry as they did the others with the iPOD and iPAD, then something may happen.

[Sub-stance1]

Sony isn't doomed but they are in some serious financial trouble. Those heavy losses may or may not affect the Playstation division. If i had to guess, I would say that it does affect Playstation. One thing for sure is that they need to turn things around as soon as possible. Overall,they aren't nearly as profitable as they once were and that is a big problem. Things just may get worse for them before they get better. I see some big cuts coming. As for next gen, MS seems to be in the drivers seat in getting to the market first. Sony really need to get back to profitability before they go into next gen. If they let MS force their hand it could really put them in a even worse position.

[Inzane2050]

Releasing side-by-side with the new Xbox is extremely essential. The PS3 becoming profitable will be of little concern in comparison to the financial woes to be endured if they release after the Xbox. The PS3 was not a good success; all they can do is focus on a successful console next gen. If they miss out on launching with the Xbox, then they might as well cut off the Playstation division and milk off of the PS3 what they can to the end.

But the PS3 has indeed turned profit, I want to add.

[Sub-stance1]

Releasing side-by-side with the new Xbox is extremely essential. The PS3 becoming profitable will be of little concern in comparison to the financial woes to be endured if they release after the Xbox. The PS3 was not a good success; all they can do is focus on a successful console next gen. If they miss out on launching with the Xbox, then they might as well cut off the Playstation division and milk off of the PS3 what they can to the end.

But the PS3 has indeed turned profit, I want to add.

They are really in a bad situation. If they release too early, they could hurt the PS3. If they wait too late, the next xbox will saturate more of the market again. It doesn't matter if PS3 turned a profit. Those billion dollar losses hurt. Sony just can't continue to sustain losses that way. I don't care how rich a corp is, losing billions of dollars will hurt. Now they have been downgraded by S&P. Not only them , Panasonic is having some serious issues too.

TEXT-S&P:Japan's Sony downgraded to 'BBB+'; outlook negative

http://www.reuters.com/article/2012/...LA260120120208

[Ghost-Rhayne]

Releasing side-by-side with the new Xbox is extremely essential. The PS3 becoming profitable will be of little concern in comparison to the financial woes to be endured if they release after the Xbox. The PS3 was not a good success; all they can do is focus on a successful console next gen. If they miss out on launching with the Xbox, then they might as well cut off the Playstation division and milk off of the PS3 what they can to the end.

But the PS3 has indeed turned profit, I want to add.

I agree that Sony shouldn't wait too long to release their next console this time around, and I remember seeing in some article a rep said that it would be undesirable for Sony. However, with both consoles selling around the 60 million mark, I think it's fair to say that both consoles were a success (maybe not financially but both sides are turning a profit now). With Playstation being profitable now, I don't see it being on the chopping block in order to get Sony back on track,ESPECIALLY now that Kaz is at the helm, it's not gonna happen.

[radgamer420]

I agree that Sony shouldn't wait too long to release their next console this time around, and I remember seeing in some article a rep said that it would be undesirable for Sony. However, with both consoles selling around the 60 million mark, I think it's fair to say that both consoles were a success (maybe not financially but both sides are turning a profit now). With Playstation being profitable now, I don't see it being on the chopping block in order to get Sony back on track,ESPECIALLY now that Kaz is at the helm, it's not gonna happen.

I agree. If anything it will most likely be Sony's TV line that end up on the chopping block. Theyre not going to cut a division thats profitable.

[Inzane2050]

It's not really getting back on track if Sony lets MS get another head start. I am willing to bet my lifesavings on Sony releasing their new console along side of Xbox. There is no other way it can happen, imo. If Sony does not abide by this, then the Playstation will without a doubt be dreamcasted. Sony survived this generation bcuz the Xbox was still a weak brand coming into the current generation. All the Xbox 360 really did this generation was thrive due to Sony's poorly played hand. In the technology realm, being first is the top priority for success.

[Ghost-Rhayne]

It's not really getting back on track if Sony lets MS get another head start. I am willing to bet my lifesavings on Sony releasing their new console along side of Xbox. There is no other way it can happen, imo. If Sony does not abide by this, then the Playstation will without a doubt be dreamcasted. Sony survived this generation bcuz the Xbox was still a weak brand coming into the current generation. All the Xbox 360 really did this generation was thrive due to Sony's poorly played hand. In the technology realm, being first is the top priority for success.

There is like what, 4 million consoles difference? MS doesn't have the market saturation that is often implied here. As I said earlier, when you are at the 60 million-ish mark, a few million indicates nothing and probably comes down to what audiences are being targeted rather than who launches first.

[Sub-stance1]

There is like what, 4 million consoles difference? MS doesn't have the market saturation that is often implied here. As I said earlier, when you are at the 60 million-ish mark, a few million indicates nothing and probably comes down to what audiences are being targeted rather than who launches first.

That MS market share is something that sony should be worried about. Especially since that market share keeps growing for xbox. You have to realize that the xbox brand went from having almost no market share last gen to stealing a huge chunk away from sony. There isn't much they can do about that though because MS is so cash rich they can afford to take more risks than sony right now. Like I said before, the smart thing for sony is to not to let MS force their hands too early. They can't afford to make the same mistakes they did last time or they will price themselves right out of the market. They have to be more prepared.

[TEJ2025]

That MS market share is something that sony should be worried about. Especially since that market share keeps growing for xbox. You have to realize that the xbox brand went from having almost no market share last gen to stealing a huge chunk away from sony. There isn't much they can do about that though because MS is so cash rich they can afford to take more risks than sony right now. Like I said before, the smart thing for sony is to not to let MS force their hands too early. They can't afford to make the same mistakes they did last time or they will price themselves right out of the market. They have to be more prepared.

Didn't the original Xbox release AFTER the PS2? That has a lot of reason why it was pushed out of the market. Sony released first last gen and took over the market. Microsoft released first this gen and they took part of that market away from Sony. You release first and you will have success no matter what your competition brings in.

[Inzane2050]

There is like what, 4 million consoles difference? MS doesn't have the market saturation that is often implied here. As I said earlier, when you are at the 60 million-ish mark, a few million indicates nothing and probably comes down to what audiences are being targeted rather than who launches first.

Microsoft went from dead last place to surpassing Sony in hardware sales and crushing them in software sales. And that is due to the early release. Now that the two are neck-and-neck, Sony can't make any big mistakes. That being said, they absolutely cannot release late again.

[radgamer420]

There is like what, 4 million consoles difference? MS doesn't have the market saturation that is often implied here. As I said earlier, when you are at the 60 million-ish mark, a few million indicates nothing and probably comes down to what audiences are being targeted rather than who launches first.

Yeah, its amazing how much Sony closed that gap despite MS releasing first and having the market to themselves for an entire year. Just that alone is a much bigger advantage than alot of people realize. Kinect was the only thing that saved the 360 from being overtaken by the PS3. Just before Kinect launched the gap was only about 2 million or less with Sony closing fast.

[The Black Wolf]

I agree with what's been said in this thread, that none of the main three will bow out. Microsoft may take a more casual approach focusing on Kinect and motion gaming, but not leave completely. It wouldn't surprise me if someone jumped into console making along with the three and we'd have four new consoles.

[Sub-stance1]

Didn't the original Xbox release AFTER the PS2? That has a lot of reason why it was pushed out of the market. Sony released first last gen and took over the market. Microsoft released first this gen and they took part of that market away from Sony. You release first and you will have success no matter what your competition brings in.

Last gen MS was just entering the market. They killed off the xbox early because they wanted to get the jump on sony next gen. It was a good strategy because the ps2 had all the market share and third party devs were choosing ps2 over xbox. Now the tables have turned a bit and xbox has stronger 3rd party support. Releasing first has its advantages but it doesn't really guarantee success. You have to have the software and a good launch price. Sony had neither starting this gen.

[Inzane2050]

When the Playstation entered the market, they didn't have any problems. Xbox floundered bcuz of the late release among other things. But being the new guy in town is not an excuse for them, imo.

[F34R]

It's definitely a reasonable justification for the Xbox not doing so well. They hadn't established a foot hold or proper brand recognition in the console arena.

[radgamer420]

Last gen MS was just entering the market. They killed off the xbox early because they wanted to get the jump on sony next gen. It was a good strategy because the ps2 had all the market share and third party devs were choosing ps2 over xbox. Now the tables have turned a bit and xbox has stronger 3rd party support. Releasing first has its advantages but it doesn't really guarantee success. You have to have the software and a good launch price. Sony had neither starting this gen.

Sony had some good launch games like Resistance and Motorstorm but their launch price was outlandish. They priced themselves out of the market and eventually had to do price drops that they weren't ready to make as this generation got under way. As for MS the reason they cut off the xbox early was because Nvidia was gouging them with licensing royalties and because of that the xbox was never going to make any money. In fact MS and Nvidia even went to court over it. With the 360 MS purchased the license for the tech so all the money they make from the 360 would be theirs.

[RaY_210]

Here's how I see it. First, no they aren't going to not make a console for the next gen. MS was more successful this generation because they had the one year head start. Nintendo dominated hardware sales because they made it affordable. As weak as it was compared to the 360 and PS3, the price, with the gimmick of motion controls, is what lured in all those sales. Back to MS and Sony, I don't know if it's just me, but I think it says something that despite the PS3's slow start, coupled with the 360's head start, that the PS3 was able to catch up and nearly surpass MS. It seems to me that even though all these companies are in competition with each other, it seems they're going their own separate ways. Nintendo is a games only company, and broke away from going head to head with the other two with the wii. Whether the Wii U is just "catching up" tech wise or surpassing the PS3/360, remains to be seen. But it's obvious they're on their own schedule. MS doesn't have that first party presence that Nintendo and Sony have, so third parties are the key to their success. So MS has to keep them happy. I think they will release next year to get another head start on Sony. But the thing is, I don't think Sony is racing to keep up with MS. As it was already stated, the PS3 is being profitable right now. They wanted a 10 year cycle this gen. And another thing to consider, if the next xbox is going to be that much more powerful, one can only assume that development costs will rise with the new tech. MS is the only new console, would you rather develop for the new and exciting console with a small base? Or for the PS3/Wii U with an established base that will keep dev costs down? Unless the new xbox really blows this gen's graphics away, I don't think it's going to have as big an impact as they think if they release early.

[Inzane2050]

Sony made two big mistakes this generation. That being releasing a console late on top of the huge price tag. From what I have seen from Sony's handling of PS Vita launch, I am a bit worried that maybe Sony did not learn from their mistakes. And as people have stated above, this new chairman or whatever doesn't sound too promising.

[Ghost-Rhayne]

Sony made two big mistakes this generation. That being releasing a console late on top of the huge price tag. From what I have seen from Sony's handling of PS Vita launch, I am a bit worried that maybe Sony did not learn from their mistakes. And as people have stated above, this new chairman or whatever doesn't sound too promising.

How did Sony not learn from their mistakes?

Built tech to reasonable budget
Solid release line up and shit loads in release window
Improved connectivity and communication (XGC etc)
Tech built with constant 1st and 3rd party input and wishes

If anything the Vita proves that Sony learnt many lessons.