Kaz Hirai Ascends To President And CEO Of Sony On April 1

An interesting date for an interesting appointment. Congratulations to Kaz Hirai, and many thanks to Mr Stringer for navigating through one of Sony's most challenging times.

This puts a PlayStation man at the top, and in no small way demonstrates that to Sony, PlayStation is *the* brand after Sony itself.

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Ha, I was thinking about that too.
But we know Sony wouldn't do a cruel joke like that.

Now M$ on the other hand.......


"Congrats to Hirai"

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Last edited by BikerSaint on 2/1/2012 10:32:12 AM

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Not all of Sony's divisions are doing all that well at the moment. But the gaming division is performing admirably and continues to show promise. The Playstation brand is one of Sony's greatest assets and they would do well not to forget that.

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I would say Kaz's appointment would be recognition of that very point Looking Glass. It is one of the few divisions seeing positive growth and in the black.

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@lookingglass & smokeypsd:

by performing admirably do you mean just not as poorly as the other divisions? Are these numbers to be applauded for the Sony division that includes Playstation since the relase of the PS2?

2000 lost 409 million
2001 made 623 million
2002 made 939 million
2003 made 650 million
3004 made 404 million
2005 made 75 million
2006 lost 1.97 billion
2007 lost 1.25 billion
2008 lost 597 million
2009 lost 893 million
2010 made 429 million
1/2 of 2011 lost 449 million

So far since the release of the PS2, Sony's division that included the playstation has lost over 2.4 billion dollars. All of the profits from the PS2 years have been eaten up by the PS3 losses.

I'm hopeful that Sony can turn it around and start doing better. Holding off the PS4 launch for as long as possible may be necessary to recoup as much money from the PS3 as possible. I worry that the PS3 will go down in history as a technical marvel but a financial disiaster. Great for gamers, not so great for Sony.

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@Casual Friday
Those are the hardware numbers and not the software numbers included.

The overall gaming division of Sony is not in the red when you take into account accessories and software along with digital revenue. They have said from the beginning they are selling at a loss, but supplement that loss with software sales. So that shouldn't be any surprise.

Note 2010 is the first time the were making a profit. That is the same year we all know the hardware began retaining a profit. With the new slims and price reductions, they lost money again on the PS3 itself.

Bear in mind, however, that the supplemented software and accessory sales contribute towards an overall profit.

Microsoft is in an even worse situation spending more money on marketing alone than they made on hardware sales and a good chunk of the software sales. And when you factor in their 30% failure rate of the original xbox's, the engineering costs to make a new model, and the huge number of replacements needed within the original warranty, Microsoft has had to supplement all XBOX income with Live accounts and PC-division revenue. (They transferred a lot of cost) In regards to overall divisions, Sony pummeled Microsoft in net revenue.

Wii, of course, is made with old and inexpensive technology, so financially speaking, they had a dynamite generation. Unfortunately, they contributed little to the growth of technology. (Then it's a debate on what's "really" important, but that's not the issue here)

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Last edited by Underdog15 on 2/1/2012 2:04:58 PM

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I know Sony hasn't posted a profit for 3 years. I have read that their losses in their HDTV division have been considerable. The quality of their competition in that sector has increased and it's difficult for Sony to compete in terms of price. Unfortunately, I don't see an easy way for Sony to address their problems in their HDTV division. A lot of cheaper HDTVs have literally flooded the market.

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@Underdog

I am pretty sure that you are mistaken. Those numbers come directly from Sony. You can check them out for yourself...

http://www.sony.net/SonyInfo/IR/financial/fr/index.html

They encoupass the entire Playstation brand (hardware, software, accessories, etc.). Sony does not break out the money they lost on hardware and the profit from software in their financial reports. They only add both together and give the total.

To be completely accurate these numbers are from the Sony division that mainly includes the Playstation however there are other products included in this division that may also have affected these losses.

I don't have any idea how that compares to Microsoft. I agree that they probably lost money also but where do you come up with the numbers to say they are doing worse.

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Pending the post of Casual Friday's that is awaiting approval, Underdog is most likely on the numbers here. PS3 has indeed sold at a loss for the majority of it's life, as was part of the plan. The extent of that loss was not as planned however. The point is though that royalties from games and licensing fees from accessories and other revenue streams - including the various PSN endeavors - do offset the hardware losses. That is in fact the way that the console business has always worked. What you lose upfront on the console hardware you reap on the software licensing fees.

Excelsior, the same thing happened with Sony's color TV business when Trinitron was no longer *the* thing when it came to color TVs. Sony stopped attempting to compete in the mass market, because it knew there was no point. The margins in that market are razor thin . So, just as they did with the Trinitron color TVs, they'll focus on high end HDTV products and innovate something else.

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Last edited by Highlander on 2/1/2012 3:57:20 PM

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Those are depressing numbers.
I guess the PS4 won't be an ultra high tech-ultra expensive machine.

Some months ago I read that SONY was giving up on HDTV's and sold it's stake in a TV joint venture to SAMSUNG. I think SONY is regrouping and should come out stronger after this. I hope Hirai can do it.

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Unfortunately, Casual Friday, that link does nothing to prove your point, and in my end, there is a glimmer of support, but it is not specific. Those overall sales are all-encompassing and do not focus on the Playstation division in the slightest. Not even remotely. It's all tied in with the company. Not only that, but it seems most of the losses you claim are there are reported in a year-over-year loss, and not so much net losses.

The numbers that decreased, are indeed, hardware manufacturing and include many other devices besides the PS3. So the HDTV losses could be factored in. (I'm capable of analyzing budgetary reports, I'm afraid)

If you look lower on these reports, there are a few sections referring to "supplemental income" or income through other revenues not related to direct sales. That section includes shares, market moves, as well as things like licensing which would affect publishing and games (as well as music, etc.)

That division posts an increase (it's actually a tough section to get a loss as most of it refers to content they already own and can manufacture for next to nothing). So unfortunately, the number you look at only see hardware and not licensing of games or DLC. (Since it is strictly material goods it refers to, hense hardware)

To make matters worse, those reports do not indicate in any detail the Playstation division. There are occasional mentions of the PS3 or PSP, but only as supplemental reasons to help explain the overall numbers. Not as direct causes or even as the direct topics!!

For these reasons, in the meantime, I will have to retain my original opinion until some more specifics are shown. As is right now, logical analysis indicates things may not be so dire when you take into consideration the licensing and other supplemental incomes. Since the losses were part of the original plan, one can only assume they are on track. Their market value as a company has dipped (along with most of the world), but that does not necessarily mean they've posted losses in all divisions. It doesn't even mean they've posted losses! If a company ONLY breaks even, their value decreases since they do not make investors any money. So you can't even go by market value to determine where or if there are losses.

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@Underdog,

How many of the yearly reports did you read? The profit/loss numbers I posted from the years 2000 through 2008 are exact numbers from the division that Sony called "GAME". These numbers are pretty much ONLY the playstation products and include the good years of the PS2. They also show exaxtly how large the initail losses were for the release of the PS3.

It is only the last two and a half years in which Sony combined the Playstation with some other things and renamed that division.

My original post was in response to a couple of comments that Sony is "performing admirably" with the Playstation division in comparison to the others. In the three reports since they merged the Playstation with other things that division has finished worst, second to worst, and worst. I'm not saying that it is all the fault of the Playstation but it is pretty obvious that overall the PS3 has not been kind to Sony financially.

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I only read a couple intermittently, but that still doesn't detract from the supplemental activity. There are plenty of ways of transferring income.

Based on your way of looking at the numbers, Sony hasn't been profitable overall in over a decade, because most hardware divisions have been in the red many times over.

Additionally, if you look at the PS2 numbers over the years while the hardware was profitable, the numbers should look MUCH MUCH higher, had they included licensing (which, consequently, includes software including games and music... which again... as I said... makes it difficult to analyze properly. It's why most of the releases the public sees related to gaming are based on units shipped, etc. It's because the company releases are not specific enough to give a full picture of gaming)

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A lot of the red ink written down for the PS3 came from the R&D costs which were consolidated in the reported numbers for the appropriate division. R&D costs for the PS2 were not handled the same way - as far as I can tell. So a significant portion of the red ink was incurred developing BluRay players and technologies. The red ink created by selling the PS3 at a monstrous loss initially is purely on the gaming division and Playstation however.

If you look back through the numbers you can see how the quarter by quarter picture for the PS2 was not entirely rosey for the first two years of it's life, and unlike the PS3 it did not sell for $300+ less than it cost to make. But the hardware continues to make a loss for more than the first 2 years of the PS2's lifespan. There are quarters in the reports in year 3 of PS2's life, where the game business made a loss because game sales were insufficient to mask the losses on the hardware.

The recent numbers that show large losses in the division that includes PlayStation are not due to the PlayStation 3. That division includes Sony's LCD TV business which has run aground in the face of commodity pricing of what was once a premium item. In fact the Playstation business is the bright spot in that division. The suggestion made by the OP is that the losses are attributable to the PS3. Certainly the losses accounted for by the R&D costs and loos leader expenses of selling the PS3 below the cost of manufacture are down to the PS3, but those losses are in the past now. It's simply incorrect to lay the losses the CPS division is experiencing at the feet of the PlayStation brand.

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Yay!

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Thats good for him! I hope he continues to do well with the company.

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Good luck to both men and the company.

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This can only be good news for gamers.

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what is the main guy for E3's position? whats his name Jack?

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Jack's the president and CEO of SCEA. Every region has a president. Kaz Hirai will be CEO and president of all things Sony Electronics, so if I'm not mistaken, the boss of all bosses?

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@frylock

Jack Tretton is CEO of SCEA and daus you are correct Kaz will be #1 man in charge. He's replacing Howard Stringer who I believe happened to be the first and only non Japanese #1 CEO of Sony after Ken Kutargi(Mr. go get two jobs if you want a PS3 and "father of the Playstation") stepped down/retired after the PS3's early problems.

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I have always liked Kaz so congats to him and Sony. :)

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I don't know, but he just looks the part. With that history, he certainly deserves it. Right on.

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april 1.... I hope is not a huge practical joke on him...

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Way to go Kaz. Do the Playstation fans right while you're up there.

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only 2 words can be said to celebrate this.
RIIIIIIIIIIIIIGE RACER!!!!!!!!!!!!!!!!!!!!!!!!!!!!
poor kaz, he will never live that day down!
;)

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