Sony raising money for PlayStation division with insurance unit IPO

Microsoft doesn't have any debt that they carry from year to year. The company as a whole is profitable and offers a nice return on investment. Their only unprofitable division is the one that includes the Xbox and handheld devices. I think Microsoft views the division as a long term strategic investment, and it will eventually return a profit.

Sony usually has one profitable division that carries the entire company, while the other divisions fluctuate wildly. Sony's return on investment is usually minimal. Their strategy consists of hardware innovation and strong branding.

Both Microsoft and Sony have had issues featuring recalls, costing each company billions.

Considering it will take Microsoft at least 2 more years for their gaming division to reach a profit, I don't see what the big deal is all about. Sony has a long term plan mapped out and it'll take a few extra billion to make sure they don't risk going off-course.

This is an incredibly dangerous move by Sony. It is never a good idea to leverage a healthy division to prop up a failing one. The end result usually involves both divisions going down the tubes. Sony has already wiped out the entire lifetime profits the PlayStation division has generated with the PS3 and now they're tapping into their Insurance division.

Furthermore, when raising funds with one type of stock, investors tend to expect their money go to fund what they bought shares in. I'd be unhappy to buy stock in Microsoft that would be used to fund the Office division just to find out they decided to stuff it into Games.

Besides, it is unlikely Sony will be able to sell the stock for their asking price, especially since it is out in the open that this will be used to keep the Playstation division from rupturing itself. A move like this shows that Sony is expecting to run into major cashflow problems, meaning investors are going to expect a larger return for the increased risk, thus drive down the stock price.

That finance talk is hot.

So on one extreme we have M$ throwing away billions trying buy market share just so they can say they have windows running in every home in America.

In the middle we have Sony who is using their game console to jump start their home movie division, their consumer electronics division, and bail the company out of it's incresingly dire finiancial straits, store your photos, clean your house, etc.

Finally on the other extreme we have Nintendo who took the seemingly insane step of using their game console primarily as a game console.

One of these companies is succeeding the other two not so much.

I love how people are so quick to pass judgment, companies do this all the time, no the game devision isn't doing "teh horriblez", in fact, the PS3 outsold the 360 last month worldwide, not to mention it's rate is about the same as the 360's in it's first year. All this with a console that costs $600/$500, I wouldn't say it's too bad. Now I'm not even mentioning the fact that both the PSP and the PS2 have been outselling the 360 for the past two years now. I'm not saying they are on top right now and aren't suffering but they are far from doomed. From my perspective the top position of the next generation consoles right now defiantly belongs to the 360. While the Wii might be selling the best the effects of it, at least for me since I don't own stock, are minimal. While the 360 defiantly has an interesting library of games coming this year, and it will increase due to amazing software sales. Which is another thing, Madden 2008 has sold phenomenal on that console, the PS3 version, which seemed to get criticized big time has sold almost double the units of the Wii version. I don't know, the Wii is an interesting console but games that I'm into don't sell on it, which means we wont be seeing a lot of them, a good example of this would be the Nintendo booth at LGC. Anyway I seemed to have wondered off the topic for some reason there...

As I was saying, the PS3 is a great console that's highly underrated, anyone that enjoys the 360 should also enjoy the PS3. I'm mean it's doing far from horrible, it's getting at least 10 good games for the holiday season: Guitar Hero 3, UT3, Haze, Heavenly Sword, Uncharted, Ratchet and Clank, Rock Band, COD4, Assassins Creed and Stranglehold. Don't know about you but for me it's more then enough over a couple of months.

Don't know why it's popular to criticize Sony on the internet, seems like anything they do, even if it's positive, gets turned into worthless uneducated flames.

I like cake.

I think they should just lose money in the gaming section and if that goes under oh well. Now they seem if the gaming part falls the whole company will.

Uncharted, MGS4, and FFXIII....

The Holy Trinity. The Savior of the psTRIPLE. It was prophesied long in advance that you would save mankind from the blight of evil known as the Wii60. Thy enemies shall taste the Wrath of the Lord.

Lo and Behold! They are coming like thieves in the night...slightly. The chosen ones who will lift the yoke off the backs of the slaves. And there will be no more despair in the Land of Playstation!

Let those who have ears listen. Rejoice and be glad!

Don't fool yourselves, Sony's only plan was to sell a hell lot of ps3's and to see everyone of us rushing to stores asking for one. I believe it is true that it's too soon to tell if Sony will recover from everything that's happening this first year at some level, but their plan can already be called a complete failure. All the opposite can be said for Nintendo, whom maybe are having too much success for my liking, but at least they've come up with something new and that's something i like to see succeeding.
As for Microsoft, i'd just really like for them to make a console that doesn't break that easily. I'm not buying an xbox until i don't see any real evidence that new xbox's are free from RROD.

I also hate Sony. Neither will I buy PS3/PSP.

But saying that Sony is going down is silly. Sony is behemoth with vast resources. By selling its numerous CE design/production units it can keep afloat a dozen of failures like PS3s (*).

(*) assert( FAILURE == (priceof("PS3") >= $500) );
PS3 @ $300 would be an awesome product. Easily wiping out competition (except for Wii of course). Even at $350. But at 500/600... it is just another expensive/luxury toy and it would be (dis)regarded as such. (Reminds me of DVD movies for $35. That was failure too. Until prices dove under $20.)

The PS3 is past the "crappy launch games" phase. It's been almost a year and still NOTHING that will convince me to spend $500 or $600.
The only future games I look forward to on the PS3 is FF13 and MGS4. That's it. Everything else is, or will be, on the 360.
Get it together Sony or devs will start dropping like flies. Wasn't it just last month that the PS3 broke the 1 Mil mark?

Sony just pumped too much new tech into the ps3. We're talking about a machine that sells for $500 *MINIMUM*. And even then they're taking a $100 loss per machine?

The ps3 didn't need the cell BE. The damn thing was made for blade servers and supercomputers for goodness sake, not gaming--its a number cruncher, not an AI engine. The ps3 would have performed just as well, if not better, with a traditional x86 based dual core CPU (better thread prediction, larger cache, etc).

The ps3 didn't need blu-ray. Granted, in the long term supporting blu-ray will probably help Sony overall, since they have a vested interest in blu-ray movies succeeding. But the gaming machine would have performed just fine without blu-ray support. Now before the fanbois come out in droves and tell me how next gen games need 50 gigs of space or whatever, just consider that there have been some breath-taking entries on the 360--gears of war and bioshock, just to name 2. If these titles can kick butt on a dual layer DVD, I'm sure Resistance:Fall of Man and Ratchet and Clank could have been fit in 9 gigs if they needed to.

I have a ton of respect Sony for trying to make their next gen system really rock the house. But they made the same mistake as the Neo-Geo--people will only pay so much for a toy.

Oh, and I'm no fanboi. I don't care which system is 'teh bestest,' especially since more and more titles are going cross-platform. But seriously, $500 for a video game console? It's just too damn much. Sony should have cut some features, and they're paying for it now with lackluster sales.

Oh, and before anyone gives me the whole "PS2 didn't sell this well this early" garbage, you couldn't find a damn PS2 for 6 months after it came out. There were PS3s sitting on the shelves at my local gamestop two weeks after it came out.

To my knowledge, Sony has never outsold the Xbox 360 with the PS3 worldwide. You may be thinking of the speculation piece a few weeks ago, when an analyst thought Sony finally outsold Microsoft in the US after they dropped the price of the PS3, but that turned out to be false.

A true statement would be that the Sony PS3 is outselling Microsoft's Xbox 360 in Japan.

I think I see the flaw in these worldwide numbers. Microsoft is selling the Xbox 360 in more countries than Sony is selling the PS3.

The US + Canada + Japan + Germany does not equal worldwide.