This early in the next-gen consoles' respective lifespan, it's pretty difficult to make accurate predictions, but that won't stop people from trying. Case in point, we now have two distinct and wildly different predictions. One has Sony laying waste to the competition, while another claims Sony will be in serious jeopardy in the next two years.
First, one of the most outspoken and quoted analysts today, Michael Pachter of Wedbush Securities has been fairly pro-Sony lately, thanks especially to the PlayStation 4's lower cost than Microsoft's Xbox One. Now, a e-mail from the analyst points to Sony staying on top through to 2016, with increased sales coming courtesy of console price drops. Here's some excerpts:
- "We expect Sony's and Microsoft's new consoles to thrive over the next three years, with cumulative worldwide sales of 37.7 million PS4 and 29 million Xbox One consoles by year-end 2016. We do not expect Nintendo's Wii U to fare as well, with cumulative sales of under 20 million by 2016."
The expected poor performance of Nintendo's Wii U is a point Pachter's harped on before, previously calling the Wii U's performance "underwhelming."
- "Our overall forecast is based upon several assumptions: first, we expect console prices to decline only modestly over the next three years, with PS4 pricing in the U.S. dropping from $399.99 at launch to $299.99 by 2016 and with Xbox One pricing in the U.S. dropping from $499.99 at launch to $349.99 by 2016; second, we expect new release software pricing to remain at $59.99 in the U.S. for the next three years; finally, we expect Nintendo to continue producing the Wii U. Should any of these assumptions prove to be incorrect, hardware and software sales will be affected, and it is highly likely that the ultimate results will differ significantly from our forecast."
It's unclear exactly what the assumptions are based on. While Sony has said it expects PS4 price drops to come at a slower pace than they did with the PS3, there's no guarantee of that happening. Looking at the company's recent history with regards to price drops, the PlayStation 3's cost at launch was a hefty $599. Nine months later, a new model was out that only cost $499, but at the cost of losing backward compatibility.
Despite Pachter's predictions for Sony's success over Microsoft and Nintendo, there's been talk that the company as a whole is in trouble.
The "personalized investment management service" Macroaxis currently has Sony marked as having a 78 percent chance of going bankrupt in two years time.
According to the site, "Based on latest financial disclosure Sony Corporation has Probability Of Bankruptcy of 78%. This is 181.83% higher than that of Consumer Goods sector, and 165.53% higher than that of Electronic Equipment industry, The Probability Of Bankruptcy for all stocks is 121.85% lower than the firm." It's important to consider that Pachter is speaking only of Sony with regards to consoles, while Macroaxis is looking as the company as a whole. With the PlayStation 4 and Xbox One the talk of the town, keep in mind that the business Microsoft and Sony are involved in is considerably larger than selling video game systems.
Given the tendency for subjects to be sensationalized, I was admittedly a bit suspicious about the metrics that engineered such a ballsy prediction of a company as big as Sony heading down the tubes. I tried to look around Macroaxis a bit more to see how other companies fare, but that's a bit difficult as the site enforces a "daily limit," and I had apparently reached mine. I was asked to upgrade my account in order to "remove usage restrictions." Looking at the Macroaxis About Us page, you'll see this phrase:
"The bottom line is that we are not trying to sell you anything, which allows us to provide objective, comprehensive investment information to use as you want."
True, they're not trying to sell you stocks, but if you want to go beyond a "daily limit," that's when you'll have to pay, with "portfolio packages" ranging in cost from $19.99, $79.95 and a wallet busting $595.95, per MONTH. This, coupled with the site's encouragement of investors to get behind the highly volatile virtual currency Bitcoin have me feeling more than skeptical of the reports that come rolling out of this site.
While I know some of the basic lingo, I'm not an economist. The minute I hear someone talking about bear or bull markets, dividend re-allotment, hedge funds or anything else of the sort, my brain shuts off. I also know that you can play around with numbers a bit, and you can come up with varying reports based on what trends or numbers are cited.
The most recent (publicly available) numbers given by Sony were from October 2013, long before the major shopping holidays Black Friday and Christmas, and the release of the PS4. If this is the "latest financial disclosure" that Macroaxis's report is based on, it'll be interesting to see how this changes once the November and December numbers are out.
