PS3 Fanboy

Sony stock fell 5.9 percent in Japan today as two analysts downgraded their investment rating of the company, "citing a loss of competitiveness." Credit Suisse reduced its rating of Sony from "neutral" to "underperform," believing "fundamental changes" are needed to get Sony back on track. The Credit Suisse analyst cut its share-price estimate of the company by 59 percent, to 1000 yen. He predicts Sony's net loss for this fiscal year will be 150 billion yen ($1.66 billion).

Deutsche Bank AG also cut its recommendation from "buy" to "hold," as it lowered its share-price estimate by 49 percent, blaming Sony's "high level of operating costs." It appears drastic measures, and further layoffs, will be necessary to restore investors' faith in Sony Corporation.

[Via GI.biz]

Nikko Citigroup upgraded its rating on Sony's stock this morning, predicting it will break even on PS3 costs much earlier than expected. With a Blu-ray drive, Cell chip and RSX graphics technology, the PS3 is an incredibly expensive system to manufacture: one that Sony currently sells at a loss to customers.

Analysts are now predicting August will be when the smaller chips will be used in the PS3. There are no details as to why August has been chosen as the date, but switching over to a smaller Cell processor and RSX graphics chip will undoubtedly lower costs for the Japanese electronics giant.

[Via Engadget]

Sony's stock has dropped 26% in the past year, for a number of reasons. Undoubtedly, the high costs of PS3 manufacturing and its sluggish performance hasn't helped Sony's corporate image.

However, the Wall Street Journal is suggesting that this is actually a good thing for investors. Sony's stock has always been "undervalued" according to their analysis. However, in recent time the stock has "become even more attractive."

The video game unit's quarterly profit and increasing demand for the PS3 is making Sony a much more desirable company to invest in. Analysts have been quick to call Sony the ultimate "winner" of this generation of consoles, and the recent victory of Blu-ray in the format war is a huge help for the company. After such troubled performance, it's only a matter of time before Sony's stock goes back on the rise. Perhaps now is the time to invest.

[Via Joystiq]

Sony shares obviously performed well after Blu-ray was declared victorious in the HD movie war. According to Reuters, "U.S. shares of Sony Corp rose as much as 5 percent on Tuesday on optimism about sales of its PlayStation 3 video game consoles and Blu-ray DVD players." While many are quick to note that game consoles should be about games, investors are seeing things a different way. They see Sony's all-encompassing approach to media as one that will really drive their business forward.

"We believe Blu-ray's victory could drive market share gains for the PS3, as we believe consumers will now be more willing to pay up (versus 360) for the standard Blu-ray player," William Blair analyst Ralph Shackart wrote in a note to clients. The stocks managed to reach a high of $47.07 (although it fell down to $46.30 later on).

The Japanese electronics company has been struggling financially due to the high production costs of the PS3. However, with a Blu-ray victory secured, things are certainly looking forward for the company. Will you invest in their stock now, too?

[Via Joystiq]

The Nintendo DS and Wii continue to print money, and the stock prices have demonstrated Nintendo's incredible success. Both systems continue to be top-sellers this holiday season, so why has the stock stagnated? The PS3, according to some financial analysts. "People's perception of the PS3 is improving from an underdog to something better, and part of the money that used to flow into Nintendo shares is now going to the Sony stock," said Yoshihisa Okamoto, fund manager at Mizuho Asset Management.

"The PS3 has been doing better recently. But that's partly because there are not enough Wii machines to go around in the United States and Europe," noted Rakuten Securities analyst Yasuo Imanaka in a report by Reuters.

It's interesting to see analysts finally turn around in their assessment of the PS3, no longer thinking it the underdog it appeared to be at the beginning of the year. With a strong lineup of games coming in 2008, PS3 has a strong chance to start chipping away at the lead that Microsoft and Nintendo have earned. Fanboy flame wars are going to get a lot more interesting next year.

[Via GameDaily]

Sony will sell about $2.9 billion worth of shares in a new IPO for its insurance unit, Japan's biggest IPO this year. 34.5 percent of Sony Financial Holding Inc. will go on sale in the Tokyo Stock Exchange on October 11th. It's expected that the money generated from the IPO will raise funds for the consumer electronics and games divisions.

"Sony could use the funds for various options to strengthen its electronics and game businesses,'' said Mitsuhiro Osawa, a Tokyo-based analyst at Mizuho Investors Securities Co. "A cut in the price of the PlayStation 3 is one option,'' said Osawa.

Analysts are predicting that another PS3 price cut may happen in the coming months. Certainly, the gain of nearly $3 billion in funds will certainly help subsidizing any losses that Sony would incur from such a move.

[Via GI.biz]