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January 20, 2005
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When do you hit a break-even point with the cost of the console?
Stringer: Well, I think Kutaragi-san (PlayStation chief Ken Kutaragi) said that it would be break-even by the end of the year, at the end of '07. PS2 was not profitable in the first year. You make it up on the content as the content gathers momentum, the licensees from that and so forth. But the current understanding is that it will be break-even by the end of '07.
How do you achieve your financial goals with that in mind?
Wiesenthal: What we said to the analysts is that just like the PS2, in its second year PlayStation 3 will get profitability. Given the income that we're expecting from PS3, there are other things that we'll have to deal with in the corporate environment to achieve our margins, and we're evaluating those right now.
Stringer: We have two or three months of discussions to figure out how to achieve the target that we promised everybody.
Wiesenthal: Unlike PS2, there's a third leg of economic value which is not only the box and the software, but also the online service. In PS3, which is Wi-Fi enabled, people are buying games right now. We're very happy with what we've seen so far, and we're hoping in the future to have their own content television and music. There is a third revenue stream to help you achieve your economics.
Stringer: Yeah, there's also a lot of optimism about renewed momentum for the PSP. PS2 performed far better than expected for Christmas, and we don't know what profits will generate. The electronics company is feeling very bullish, but that's for me to assess, and to decide whether that alone will get me where I want to go. But we have to have a lot of contingency plans.
When will Blu-ray players drop in price to become a mainstream product?
Glasgow: If you go back to when DVDs came into play, it took about three years until they got into price points of $299 to $399. I suspect it's about the same thing here with Blu-ray. I think it's going to take up to three years to get down to those price points, possibly a little longer. But I would assume it's similar to DVD.
We have some control over (the cost of the) components. There are a lot of components in that product. Once you get volumes up, you get yields up, and you get efficiencies up; the prices go down on the components.
It sounds like you have a lot of questions in your mind over where the profit will come from to hit your financial goals. Are you going to try to decide where to do it over the next three months?
Stringer: No, I only say three months because announcements come in three months. Every decision doesn't take three months at Sony. It only seems like that. Actually, I know where I can get the money, and I have ideas where I can get the money. But we have to achieve a consensus in an organization about how to get to those numbers, and we need a review of where we stand.
The electronics company has had a very strong December. I haven't seen the rest of the organization's December yet. There are lots of different elements that enter into the equation before deciding how to get to that 5 percent. I go to Japan for a month starting next week. I made a promise to find a way to get to it.
How does the electronics company fit into the big picture?
Stringer: The whole company, it's Sony United these days--I don't want to think of Sony United as separate P&Ls (profit and loss statements) that ignore each other. That was part of the problem over the last three or four years. We are a shared environment today.
In the digital world one of the difficulties has been that one company can lose money so that another part of the company can make a lot of money. That's something that we've had to educate people about. That's the difference in the digital world. In the analog world, self-contained P&Ls made sense. In a horizontal digital world, they don't.
For example, we have $4,000 projectors for movie theaters. Those are short-term expenses, but it saves $160 million for the movie company across studios. So, how do you make a decision on whether to go forward with the $4,000 projector with all the cost implications of a more sophisticated product? If you make it in the narrow analog decision P&L, you probably make a decision not to do it. But when you're going to save $150 million in another part of the company? You have to get the company used to the idea that the left hand can make the right hand money and vice versa, and that's part of the cultural change that Sony United represents.
You've all had a hundred discussions and thoughts about integration and convergence, but there is a certain inevitability now about content driving hardware sales. Talladega Nights was released with PS3 before its normal window of release in the video department. That's one part of Sony working very hard to the advantage of another part of Sony. We didn't do that before. We lived in separate worlds.
What are some of the other cultural changes you've had to make?
Stringer: We still have software technology improvements that will make us competitive going forward in video players. We can't afford to let anyone else beat us in that market. So how we will use the PSP in the future is a huge opportunity.
We transformed the software technology development at Sony. We really do now have an integrated approach in the United States, Tokyo and Sony Online Entertainment. Tim Schaff and Shimada-san (Keiichiro Shimada, president of the technology development group) from Tokyo are now in constant communication about software technology. There are a number of people in their 40s instead of their 50s and 60s. I don't mean to downplay age, but we are pushing Sony first past the digital world and, for example, now we have software architects in every product lineup. We didn't used to. I don't think everybody really knew what a software architect was two years ago. So now we have a relationship between software engineering and product design from the beginning of products.
See more CNET content tagged:
Howard Stringer, Sony PS3, Sony Playstation, Blu-ray, Blu-ray disc
The Nintendo Wii, on the other hand, still cannot be found.
SONY BITES THE BIG ONE!
My HDTV will be any brand but sony, even if it doesn't have as a good of a picture. Tossed ALL of the sony audio/video gear. Didn't try to sell it, it's landfill fodder!
Once again Sony is taking credit for DVD's which were already well excepted before the PS2 came out. And they claim every PS3 owner is someone that supports Blu-Ray. However, when you actually listen to what PS3 consumers are saying, they could care less about Blu-Ray. I know a couple that have HD-DVD players and don't plan on buying any Blu-Ray movies.
But hey, whatever Sony has to do to make the numbers look good. I can't wait to see the huge PS3 pyramids the stock boys create at Target after Sony is done "shipping" the 6 mil. Should be a beautiful thing.
http://www.tvpredictions.com/debbie011207.htm
The adult industry will be going with the format that is best for their sales. The factors that have been discussed so far include: 1) the cost of the media, 2) the number of players, and 3) if the industry is allowed to use the media.
Here are my reasons for thinking that Blu-Ray can still win over the adult industry. 1. The media prices are constantly dropping. Within a year or two there will most likely be little to no difference in the prices HD-DVD and Blu-ray. 2. By including a Blu-ray player in every PS3, Sony has made sure that there are now far more Blu-ray players sold than HD-DVD players. 3. So far there is no official policy that Blu-ray media cannot be used by the adult industry. In fact, everything I have seen coming from Sony is saying that they are welcoming the industry.
Also, with the backing of several movie studios, and the makers of every game for the PS3, I think Blu-ray is strong enough to survive even without the adult industry.
factor in something like what media format "wins".
industry shows in Las Vegas, and it turns out that some of the
biggest adut companies are now going Blu Ray. Sony has
dropped the no XXX rule. I don't remember the names of most of
the companies he told me about, but Vivid (one of the biggest) is
now Blu Ray exclusively, and one other one as well. More are
saying they'll do Blu Ray as well. So HD-DVD no longer controls
the adult video industry.
I agree that it's sad that such crap is determining and has
determined technologies viability. But that's the world we livei
in.
It was a mistake for them to take this "winner take all" contest of incompatible formats to the consumer. The consumer wants a "rock solid" standard that everybody is behind. Too many have been and continue to be burned by new technology that the industries as a whole don't get behind.
I wouldn't call Sony's Sir Howard Brave but arrogant and ignorant. this is one of the reasons that Sony is failing to provide the consumer what they want at a pricepoint they can afford.
Fred Dunn
Josh Chandler
http://www.josh-chandler.blogspot.com
Blue-Ray also has more exclusive content. The content gap will grow over time.
With the advent of (broadband) internet -- plus Pay-Per-View streams on cable and satellite TV -- the importance of physical delivery of adult content is much less today.
And since the regular DVD format will still be with us for a long time, high-definition DVD is only one among many distribution channels available to consumers today. Big change from 20 years ago.
The net effect is the adult industry can no longer dictate which physical format the rest of the world uses.
So even if the industry standardizes on HD-DVD as the physical delivery method, it wont matter much because those with Blueray can still access the same content through one of the other channels. Most consumers might even prefer non-physical delivery for their porn.
I would suspect at the end the adult industry will produce Blueray content after all.
I purchased a PS-3 because I wanted a chance to play with the Cell processor (PS-3 running Linux is a very easy way to write Cell code).
PS-3 games and Blue-Ray movies look great. The sound is stunning. PS-2 games look very bad unless you drop resolution to 420P.
All Sony needs to do is Auto change to 420P when a PS-2 disk is played, or let the user set a different resolution for PS-2 games and users will have a much better experience.
Please Sony, it is a very easy fix.
But the problem has nothing to do with the PS3, its the games themselves.
If the game is written for say the 320 x 240 standard def resolution, if you play that game on even a 640x480 480P resolution you've either got to scale the picture to double its size (try doing that with a photo in a paint package to see the effect).
The alternative would have been to have the game appear in miniature on the screen (in the same way a background picture will appear to shrink if you increase you computer's resolution but don't stretch the image to re-fill the screen).
In my mind this would have been the better option, except that on smaller TVs games may have become unplayable.
Progressive scan games such as God of War should not have this problem as they are written for both 480i and 480p resolutions - and other games appear to have better scaling algorithms written by the coders that can mitigate the jaggie effect somewhat.
But generally there's not much you can do if, as Sony have done, you install the original PS2 graphics chipset on the motherboard instead of emulating the chipset as the 360 attempts to do.
In the case of the 360 you can write upscaling algorithms to smooth out the jaggies when you double the size of you bitmap images. The PS2 hardware won't do this, because on the original PS2 it was completely unnecessary.
So Sony could fix the problem by writing a PS2 emulator in a new firmware update - but this would probably lead to more compatibility issues.
Personally I have no particular desire to play PS2 games on my PS3 - yes I realise that you probably have a few you enjoy too much to wait for PS3 equivalents to be produced - but unless you use the composite cables and play the PS2 games on smaller SD tvs, there's no answer to this unless Sony change their minds and produce PS2 emulation for the PS3.
by a medieval singing troupe. Actually, I think I can better imagine
a Sony exec being followed around by some type of crappy pop
rock group singing in a whiny emo voice....
Bravely bold Sir Robin rode forth from Camelot.
He was not afraid to die, O brave Sir Robin!
He was not at all afraid to be killed in nasty ways,
Brave, brave, brave, brave Sir Robin!
Ten years ago my living room was all Sony: CRT, A/V Receiver, DVD Player, Cassette Deck, Turntable, several CD Changers, WebTV, and the fancy headphones. I've had problems interfacing them (changing Ctrl-A, S1, etc. standards), early obsolescence, etc. And now very little Sony product remains.
Personally I can't tell the difference between the formats and I don't care. An uncompressed 2hr digital movie is approx 1 terabyte in size - that's 1024 gigabytes. So whether the disk stores 25 or 50 gigs is irrelevant, as they're both hugely compressed. Both look great, although the XBox HD-DVD player does do a decent upscaling job on regular DVDs (as do stand-alone blu-ray and HD-DVD players), so it has the edge in that regard. However I already have a 1080p 5 disk upconverting DVD player, and my next TV will do the upscale/conversion itself, so all that will become irrelevant as well.
But what excites me the most is the use of either platform as a media PC. I can't speak for the Mac, a great computer to be sure, because I have owned one since the days of the Amiga. But the Windows PC is total garbage when it comes to using it as a everyman media center. It is too unreliable, too clunky and as with all media systems, too tied down with competing DRM software screwing up the potential of sharing media throughout the house or handheld players.
The PS3 itself excites me the same way the Amiga did when it first arrived. Sure it is primarily a game player, and so was the Amiga to start with. But some of the most innovative software and ideas were developed for that platform - it became the first affordable DTV system, the first affordable desktop 2D and 3D animation system, and a great development platform that kickstarted most of the major game studios of today. It was the only computer system that allowed real time visual affects to be applied to live TV feeds for more than a decade.
And sure you could set up a PS3 or 360 to run Linux, but that just scratches the surface of possibilities.
I realise there can never be another Amiga, Atari ST or Archimedes computer - such things belong in the past. But there does exist the possibility of using these consoles for heavy weight media purposes, such as a media server for the home, or an editing system for movies, photos and sound.
Bad QA, hidden Virus', hurting their own customers, etc... is something that is a normal business practice for Microsoft. It will slowly take them down.
For Sony it will rapidly take them down.
So that one million PS3s 'shipped' in the USA is exactly that - units shipped - most of them are still sitting on store shelves
No one want to pay such a high price when the Xbox 360 provide superior graphics and better looking games at a much lower price point.
I note that the price on the Xbox 360 is steadily moving downwards and / or being discounted, with bigger bundles added for the same money - as Microsoft are close to break even on the current hardware pricing.
Sony simply cant compete with that as they are already massively subsidising the PS3 hardware costs.
know about the PS3 deal in any other stores, I saw 6 60 GB PS3s for
sale when I went to Toys R Us looking for a Wii. The guy I asked to
see if they had any in stock (In case I simply couldn't see them) said
basically that. They were out of Wiis but has PS3s for sale.
I was probably only able to get my Wii by chance, as I went in to a
different store the next morning and they had JUST gotten a
shipment in.
So that one million PS3s 'shipped' in the USA is exactly that - units shipped - most of them are still sitting on store shelves
No one want to pay such a high price when the Xbox 360 provide superior graphics and better looking games at a much lower price point.
I note that the price on the Xbox 360 is steadily moving downwards and / or being discounted, with bigger bundles added for the same money - as Microsoft are close to break even on the current hardware pricing.
Sony simply cant compete with that as they are already massively subsidising the PS3 hardware costs.
I definitely thought that the PS3 would kill it's competition and that Blu-Ray would win because of it, but I know realize that people care more about gameplay that graphics. Always have in fact. For this reason, and the fact that it's half the cost, the Nintendo Wii will most likely beat out the PS3 and Sony is in a lot of trouble.
Some call it arrogance or ignorance, but the simple truth is Sony has lost sight of what consumers want. They've always done business based on their brand name. General consumers always thought Sony represented a top of the line product - because it always cost more. Now, the only technology Sony has a good handle on is LCoS displays.
I was really impressed when Microsoft said something to the effect of, "you should get a 360 and a Wii, that way you have the best of both worlds". I truly agree with that approach and intend to do just that when the Wii comes back in stock. Microsoft isn't taking an arrogant approach about it, they're just doing everything they can to give everything to the consumer. Their only problem is the whole "3 rings of doom" issue - to which I was glad they decided to increase the warranty.
Overall I've been very impressed with Microsoft's handling of things.
As far as HD, he lied...Universal isn't the only studio. Let's not forget the "adult" corner...which basically is ALL ending up on HD. He may be too blind to realize it but that's huge.
"When will Blu-ray players drop in price to become a mainstream product?
Glasgow: If you go back to when DVDs came into play, it took about three years until they got into price points of $299 to $399. I suspect it's about the same thing here with Blu-ray. I think it's going to take up to three years to get down to those price points, possibly a little longer. But I would assume it's similar to DVD."
...until the entertainment divisions started calling the shots. More worried about protecting their precious content rather innovating with technology, they were slow to adopt digital anything and are still playing catch up.
Sir Howard is from the same group that brought us these issues, so I don't expect any significant improvements to the situation.
- keep your millions
- by theprof00 February 28, 2007 9:03 AM PST
- why dont yall just stay away and stop talking smack about a company that brought you the discman, and the walkman. Pioneers of the blue ray, the transistor radio, Betamax (a piece of hardware that was superior and is STILL used in the movie industries, it was the public that killed Beta,...for porn) The trinitron monitor(still produced today), with philips, they introduced the CD to the world...the CD and later the DVD. The brought SDDS and many other great products.
- Like this Reply to this comment
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(49 Comments)The problem, is that Sony always spends all this money inventing superior formats, and a lot of people are just too damn lazy to pick up the newer technology until it is practically being given away.
The millions that you speak of sir, is a minority. Much more people love Sony because they are always trying to create better hardware and this is a world where porn can hurt an industry, a world where companies can create pirating software (Bleem), and generally there are a million ways to take pot shots and take out lawsuits against a company that deserves better.
IMO Sony is not failing right now, but if many of you took your own advice and looked at the historical aspect of Sony, you would realize that the populace, being tight with money and greedy, in one way or another, is what hurts Sony the most.