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Sony Corporation (SNE)
Stringer's Blu-Ray Win May Fail to Spur Sony Growth
Stringer's Blu-Ray Win May Fail to Spur Sony Growth
Bloomberg - February 21, 2008
Submitted by ItachiItachi (463) at 4:01AM PST on February 21, 2008
Feb. 21 (Bloomberg) -- Sony Corp. Chairman Howard Stringer's triumph over Toshiba Corp. may not be enough to prevent earnings growth from slowing.
Morgan Stanley and Mitsubishi UFJ Securities Co. say they don't plan to raise forecasts for Sony after Toshiba, the leading promoter of the HD DVD format, on Feb. 19 said it will shut the business for high-definition video players, surrendering to Sony's Blu-ray.
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2Laoldar posted on Sony Corporation (SNE) at 9:33AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growth@ItachiItachi,
No. From what I saw (I didn't dig too deeply), it accounted for something like 20-25% of the company's profits before the PS3 development costs ate into the PS2 revenue. Sony still made quite a bit from Ericsson, Electronics and Pictures (among others).[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
2ItachiItachi posted on Sony Corporation (SNE) at 9:10AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growthbids
1Laoldar posted on Sony Corporation (SNE) at 8:30AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growth@ItachiItachi,
Of course not. Sony is an electronics giant that happens to have a gaming division. Sony's electronics divison has sales (fiscal 2006) that are SIX TIMES that of the gaming divison. Sony Pictures sales are about equal to the gaming division.
Nevermind affiliates like Sony Ericsson, which had sales 11 times that of Gaming.
In 2004 (so before the PS3), their gaming division only accounted for about 10% of total sales, though it was fairly profitable.
For fiscal 2007, Sony is projecting a profit of $3.86 billion.
[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
1ItachiItachi posted on Sony Corporation (SNE) at 7:21AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growthbids
4Laoldar posted on Sony Corporation (SNE) at 7:14AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growth@kspraydad,
The main point was that royalty rates are so low that it won't make a huge impact on Sony in a positive way. According to a spokesperson, Sony doesn't own the technology and royalties are shared among members so their take could end up being quite low (although, of course, better than if HDDVD won).
Sony's hardware business model is described as "not very profitable", meaning that they're not making mcuh on each player (or even still losing money), in which case Blu-Ray could cost them money for years to come unless movie sales drastically improve.
The JVC story has an important lesson. Yes, VHS won...but how many people bought a JVC player? Since Sony doesn't own the technology, it will be left out of most of the profits if other companies undercut their prices and steal sales.
Interesting stats that before the PS3, HDDVD sales were 64% of the market. Now Blu-Ray is 65%.[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
2kspraydad posted on Sony Corporation (SNE) at 5:43AM PST on February 21, 2008. RE: Stringer's Blu-Ray Win May Fail to Spur Sony Growth@ItachiItachi,
I find it odd that they compare the SONY 'win' to JVC winning VHS but then focus on 'the last 10 years' for VHS and how JVC has fallen 80%...um...those last 10 years would be the backend of VHS lifespan...
I'd like to know how JVC did in the first 5 - 10 years after VHS was the defacto winner...wouldn't that be a more reasonable comparison?
[ Oracle ] [ Level 21 ] [ Rank: 475 ]bids
12ItachiItachi posted on Sony Corporation (SNE) at 4:01AM PST on February 21, 2008. Article: Stringer's Blu-Ray Win May Fail to Spur Sony GrowthFeb. 21 (Bloomberg) -- Sony Corp. Chairman Howard Stringer's triumph over Toshiba Corp. may not be enough to prevent earnings growth from slowing. Morgan Stanley and Mitsubishi UFJ Securities Co. say they don't plan to raise forecasts for Sony after Toshiba, the leading promoter of the HD DVD format, on Feb. 19 said it will shut the business for high-definition video players, surrendering to Sony's Blu-ray.[ Oracle ] [ Level 19 ] [ Rank: 463 ]
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It is true that during certain period (IIRC, 2000 - 2005), before Stringer came aboard, the other division is losing money (electronics, Mobile, movie making), while only the game division get profit (don't confuse profit with revenue / sales). That is one of the reason Ken Kutaragi was "golden man" at SCE. However, PS3 and arrival of Stringer is the major turning point, in which all SCE division turn their situation around (game losing money, other divisions get profit).