Will Sony's woes effect SOE & SWG?

MX13 · October 2006

Sony's luck seems to be spiraling down the drain.

Recently, several major tech publications reported that the PS3 has major technical flaws. It seems that durring the Tokyo Game Show the PS3's that were available to play had to be repeatedly reset due to lockups & crashes. Sony blamed this on the heat of the show, however one writer noted the enclosures for the PS3's was cooled & no other hardware manufacturers seemed to have similar issues.

This occurs only about 30 days before the consoles launch. One writer reported that one Sony PS3 Rep at the show hinted the Console Launch may be delayed passed the new year due to technical issues.

Add to these major woes:

SWG's continued bad press, and SOE's drop to the 3rd largest MMO maker, even though it offers almost over double the games as the #2 (NC Soft).
A resulting stock drop of about 3% due to PS3 issues.
278 million dollar profit last year erased (and then some) by 270 million dollars of Taxes owed, 7 million batteries recalled (estimated at 180 mil+, plus litigation) & an estimated loss of about 70 million dollars annually due to the SWG NGE.
The slow sales & high costs of the launch of Blue-Ray, and the comparitive success of HD DVD over it so far.
Sony said last month it was delaying the Japanese release of its new digital Walkman by a week because of a malfunction of an unspecified part. Rumors are flying around that it's a bigger issue than that.
Huge drops in Sony Flat Pannel / Plasma sales this year, due to competitive pricing in a diverse market.
A total share drop of about 25% over the last 6 months, with SWG being listed by some analysts as a loss-leader concern.
EDIT: This morning, it was annouced that another 1.2 million battieries will be recalled by another 3 manufacturers. Sony is also facing pressure to recall all betteries of that type, even if laptop makers do not.

The Question: What, if anything, will this mean to SWG? Will pressure be put on Smed to improve profits, and if so, would they consider / push for classic servers?

Minimum · October 2006

They will just continue to suck every penny they can out of the game.

Beyond that, I doubt it will mean much.

Obraik · October 2006

There's probably many other departments they'll worry about first before they look at SOE. In the grand scheme of things, SOE is a minor part of the company.

Bissrok · October 2006

With low subs and one of the most expensive IPs on the market, I don't see how they could last much longer. Or why they would want to. They can't afford to keep wasting money like this.

MX13 · October 2006

Originally posted by Obraik
There's probably many other departments they'll worry about first before they look at SOE. In the grand scheme of things, SOE is a minor part of the company.

SOE is one of 5 divisions, accounts for about 10% of total sales, and is the most profitable division. They are not a small problem.

Over the last year SOE has slipped from 2nd to 3rd, and over the last 3 years, 1st to 3rd. Blizzard makes over 800 million a year in sales, and over 700 million in profits. SOE could add a minimum of an additional 50 mil in profit with classic servers.

bigfoots · October 2006

I strongly doubt that it would have any knock on effects for SWG.

bigfoots · October 2006

Originally posted by parrotpholk

While I agree with your initial point, your closing comments are really not necessary on a 'SWG Veteran Refuge' forum and would just seem intended to annoy and generate flaming.

Rekrul · October 2006

This is like asking if great depression will affect Titanic's cruise experience.

royalpenalty · October 2006

in the 80's and 90's i wouldnt buy electronics from any company but Sony.

but im a launch veteran of SWG, so i dont need to explain here why SONY products are no longer allowed in my home. period.

Shayde · October 2006

I think SWG's woes effected Sony. Took $OE from being an "Industry leader" to a #3.

Just another bad sign for Sony. That, and when you look how many "exclusive PS" games are now heading to Xbox2 as well... I think they really bit off more than they can chew.

MrArchy · October 2006

$ony's woes will mean little to $OE and SWG, aside from the fact that the people in charge of both aren't as aware of reality as they should be.

$OE is an independent subsidiary company and has it's own revenue stream, and with games like EQ and others doing fairly well (and let's not forget that SWG is still probably making a profit - not much of one, but it's in the black) hence they are insulated to a significant degree from the financial woes plaguing $ony ATM.

$ony is doing on thing well of late - they are getting very, very good at shooting themselves in the foot. It even appears they are using large caliber rounds to do it with, too.

Wildcat84 · October 2006

Will Sony's other problems affect SOE? Sure they will, and they have. SOE probably still makes a profit overall because of EQ/EQ2 which still have at least 300-400K subs between them and it's all their own IP (ie: Sony keeps all the money). But what happens is that as the parent corporation spirals out of control is they clamp down even on profitable divisions, they need to suck out whatever cash they can get to pad the books.

Which causes SOE to cut support, cut developers, etc. SWG is a fine example of this. Even if, for sake of argument, the NGE was the "correct" thing to do, SOE's not giving it enough resources to get done in a timely manner doomed it to fail anyway.

Rabia · October 2006

Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

Wildcat84 · October 2006

Originally posted by Rabia
Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

About the only thing SOE has that's worth buying is EQ/EQ2. And that is getting to be worth less and less...

Bogdawson · October 2006

i personal think it would be great if sony sold soe to ea and then the soe curse could lead to ea being bankrupted and a come back of indenpent studios again. that would be a hoot and a half.

Shayde · October 2006

Originally posted by Wildcat84

Originally posted by Rabia
Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

About the only thing SOE has that's worth buying is EQ/EQ2. And that is getting to be worth less and less...

Blizzard could buy them with the change from their couch.

JestorRodo · October 2006

Originally posted by Wildcat84

Originally posted by Rabia
Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

About the only thing SOE has that's worth buying is EQ/EQ2. And that is getting to be worth less and less...

If SWG is in that deal and immediate precu servers are made available ( and some Csr , MOD and GM errors are corrected

.) and the DC universe project would be a sweet deal for Bioware or anyone else (/callingotherfriendswith$).

Distopia · October 2006

Originally posted by Bogdawson
i personal think it would be great if sony sold soe to ea and then the soe curse could lead to ea being bankrupted and a come back of indenpent studios again. that would be a hoot and a half.

The only way for independant studios to make it , Is for customers to support them . Take dark and light , Roma victor and Seed for example . All 3 had really rough releases , All 3 are in an unfinished state and all 3 studios receive as much flak as sony .But yet all 3 are trying to offer very engaging games . These studios have no chance if customers are not willing to help them evolve into something great . EVE had the same type of early going from what I understand , Yet had the support of their fans . Which over a few years gave them the chance to make a trully unique and engaging game . This again is the only way these studios (with very little financial backing ) make it in a world owned and dominated by the all mighty dollar.

BaronJuJu · October 2006

Originally posted by Malickiebloo

Originally posted by Bogdawson
i personal think it would be great if sony sold soe to ea and then the soe curse could lead to ea being bankrupted and a come back of indenpent studios again. that would be a hoot and a half.

The only way for independant studios to make it , Is for customers to support them . Take dark and light , Roma victor and Seed for example . All 3 had really rough releases , All 3 are in an unfinished state and all 3 studios receive as much flak as sony .But yet all 3 are trying to offer very engaging games . These studios have no chance if customers are not willing to help them evolve into something great . EVE had the same type of early going form what I understand , Yet had the support of their fans . Which over a few years gave them the chance to make a trully unique and engaging game . This again is the only way these studios (with very little financial backing ) make it in a world owned and dominated by the all mighty dollar.

Seed is no more

Distopia · October 2006

Originally posted by BaronJuJu

Originally posted by Malickiebloo

Originally posted by Bogdawson
i personal think it would be great if sony sold soe to ea and then the soe curse could lead to ea being bankrupted and a come back of indenpent studios again. that would be a hoot and a half.

The only way for independant studios to make it , Is for customers to support them . Take dark and light , Roma victor and Seed for example . All 3 had really rough releases , All 3 are in an unfinished state and all 3 studios receive as much flak as sony .But yet all 3 are trying to offer very engaging games . These studios have no chance if customers are not willing to help them evolve into something great . EVE had the same type of early going form what I understand , Yet had the support of their fans . Which over a few years gave them the chance to make a trully unique and engaging game . This again is the only way these studios (with very little financial backing ) make it in a world owned and dominated by the all mighty dollar.

Seed is no more

I Rest my case :P

Ransom73 · October 2006

In the grand scheme of things, SOE is a very *small* cog in the machine that is Sony. Think about it...Sony is, but not limited to, involved in movies/television shows, music, electronics (home audio/video, alarm clocks, telephones, mobile phones, car audio, consoles, computers (and all peripherals, laptops, desktops, etc)
games, cameras...The list goes on and on...

SOE is *part* of Sony, but is viewed internally as an independant entity. If / when SOE stops being profitable, then you'll start seeing shakeups at the top, then work its way down. Most likely, you'd see Smedley removed, and someone else take his place before any games are shutdown.

SW:G is still making money, even at 50,000 subs, they are looking at 750,000 in revenue per month, not counting residuals from Station Pass. Lets say they have 25 devs working on SW:G (from TH to Helios, and all in between) making an average of 50,000 per year, or 4,166 per month. You're looking at just over 100K per month in salary, leaving about 650K to pay other expenses (Lucas Arts, for example). Expenses for utitlities (building rent if they don't own, utilities) are *NOT* considered part of the SOE SW:G cost structure, since it is shared by SOE EQ/EQ2, and other parts of SOE Austin.

Hell, if they just had 25,000 subs, the game would still be making money. Barely, but it would still at least break even.

Darkstryder · October 2006

As Nelson from The Simpsons would say - "HAAA HAAA"

It cheers me up to see $ony in trouble. Maybe this is Karma finally catching up with them due to $OE's mis-treatment of loyal customers. I hope so. Only a rollback and a full apology will appease karma.

MX13 · October 2006

Originally posted by Wildcat84
Will Sony's other problems affect SOE? Sure they will, and they have. SOE probably still makes a profit overall because of EQ/EQ2 which still have at least 300-400K subs between them and it's all their own IP (ie: Sony keeps all the money). But what happens is that as the parent corporation spirals out of control is they clamp down even on profitable divisions, they need to suck out whatever cash they can get to pad the books.

Which causes SOE to cut support, cut developers, etc. SWG is a fine example of this. Even if, for sake of argument, the NGE was the "correct" thing to do, SOE's not giving it enough resources to get done in a timely manner doomed it to fail anyway.

SOE is definatly making a profit. They have no new MMO's launched, and only one in Dev. All of thier titles are merely raking in cash now. The point I was trying to make was this: Will Sony extend pressure on SOE to make more Profits to offset total losses? I think they will, they need too much cash not to. So, will that pressure encourage Classic Servers?

MX13 · October 2006

Originally posted by Rabia
Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

Bioware couldn't come close to affording them, and not many would want to enherit the problems even if the could. If anything, they would sell off titles and fold SOE, but it won't happen. There too much pure profit in SOE....

The only company that could offer enough cash would be Microsoft, and they don't like taking on others problems.

Uberman · October 2006

Originally posted by Obraik
There's probably many other departments they'll worry about first before they look at SOE. In the grand scheme of things, SOE is a minor part of the company.

According to the OP, "an estimated loss of about 70 million dollars annually due to the SWG NGE." Assuming the numbers are correct, then (70 million / 270 million) = 25.6% of the company's profits last year. To me, 26% of the profits from one endeavor is hardly "a minor part of the company."

haxxjoo · October 2006

Originally posted by Shayde

Originally posted by Wildcat84

Originally posted by Rabia
Yes, they will want to sell SOE as a business unit. Prehaps Bioware will buyt them.

About the only thing SOE has that's worth buying is EQ/EQ2. And that is getting to be worth less and less...

Blizzard could buy them with the change from their couch.

what does soe have you'd want to buy?

Developers of talent? Have you seen Helios body of work?

Game Engine? They just licensed an engine they dont have one worth stealing

IP? Sorry but WoW > EQ. SWG is dealing with LA and a license so ah no. Other titles?

Management? ROTFLMAO at the thought.

As far as buying a developer why would anyone target soe?

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