Sony Stock Drops After PS4 Event

[Steven Bogos]

Sony Stock Drops After PS4 Event

A pledge to re-invest in the Vita, not showing the console itself, or a "scary number" could all be the cause of Sony's 24 point stock drop.

Sony's Japanese stock dropped 24 points, or around 1.7% (at time of writing), following the company's "PlayStation 4 announcement" event. It looks like Japanese investors were not as impressed with Sony's new console as many others were. While it initially seems a little strange to have the stock drop after a big announcement, it makes a lot more sense when we look at the big picture.

First let's look at what happened at the actual event. The company pledged to re-invest in the "supercharged PC architecture" [http://www.escapistmagazine.com/news/view/115334-Vita-Sales-Get-Even-Worse] but gave no indication of what the thing will cost, and the physical console itself wasn't actually shown. These are all things that could be worrying.

These problems are then exacerbated when we remember that Japan is actually in a junk status. [http://www.guardian.co.uk/world/2012/dec/10/japan-recession] You could see how an extremely ambitious new console with dozens of new (and expensive) features could cause investors who were expecting a more modest system to reconsider their investment.

Lastly, there is one more possible reason that may seem a bit... strange. Many Japanese people are incredibly superstitious, and 4 is a bad number. In Japanese, "death" and "four" can both be pronounced as "shi," so they try to avoid it in all circumstances. It's not uncommon to have level 4 on apartment buildings renamed to level 3A, or skipped entirely. Perhaps Sony could have eased some stockholders' minds by naming their new console the PlayStation 3A?

Source: Yahoo Finance [http://stocks.finance.yahoo.co.jp/stocks/chart/?code=6758.T&ct=b]

Note: The original article mistakenly stated that the Kanji (Japanese character) for "death" and "four" were the same, but it turns out that this is not the case. Rather, the similarity is in pronunciation only.

Permalink

 

[Eleuthera]

So, it's really the Play Station Death? I'm suddenly a lot more interested

 

[Daystar Clarion]

Japanese people are incredibly superstitious

Ouch, nice generalisation

Joking aside, I can see how pouring millions of pounds into a new console, when your new handheld isn't exactly doing very well, could worry some people.

Hell, if the PS4 doesn't succeed, and I mean really succeed, then Sony might end up going under.

 

[Mr.Mattress]

This is terrible news for Sony. I thought the PS4 announcement would at least temporarily raise their stocks; Instead, it drops even further! And it's gonna just keep dropping! If they can't pull off a Successful E3, then Sony might not even be around to launch a PS4!

 

[Adam Jensen_v1legacy]

Damn. That's bad. I wonder now if M$ will be dumb enough to announce mandatory Kinect with their console.

 

[Tisiphone1]

This doesn't surprise me really. I thought the event was very western focused, nothing RPG or Strategy for Japan to get excited about. Sony's heavy hitter in Japan, Square-Enix, showed us a non-gameplay tech demo which has been shown before and a guy who effectively got on stage, waved his hands, said "Final Fantasy" and left.

 

[dragongit]

I'm still very excited for the PS4. Especially titles like Knack and Destiny. I can see why investors may be hesitant, but I think there is still a lot of potential for the console.

The simple reason we haven't "seen" the PS4 yet is because they haven't finalized it's design. They may have the basic layout and specs, but not actual box design and perhaps optimal cooling. It could all be in a big nonsecript box right now as they demo it.

Almost no console is ever seen when it's first offically announced. The Wii U took a year and a half before we saw the box itself.

 

[Dead Seerius]

Wow, I'm actually pretty surprised it dropped at all, let alone as low as it did. The reasons for people being sceptical are fair, but it still seems a bit early to judge how the console will perform.
Then again, this was supposed to be Sony's big reveal, and we weren't left with as much as we'd hoped concerning the console itself.

Hope they can impress down the road at E3.

 

[Adam Jensen_v1legacy]

I'm still very excited for the PS4. Especially titles like Knack and Destiny. I can see why investors may be hesitant, but I think there is still a lot of potential for the console.

I can see why the investors may be hesitant too. They're idiots. They don't understand gaming market, they don't understand technology and they're not future oriented thinkers. Short term instant profit is all they care about. Most PC gamers (never mind the actual developers) were able to see what the console will be capable of in the not so distant future when they revealed the specs.

 

[spartandude]

Wow, I'm actually pretty surprised it dropped at all, let alone as low as it did. The reasons for people being sceptical are fair, but it still seems a bit early to judge how the console will perform.
Then again, this was supposed to be Sony's big reveal, and we weren't left with as much as we'd hoped concerning the console itself.

Hope they can impress down the road at E3.

it also puts them in a very awkward position in terms of pricing, investors arnt going to be happy if its low however while people are excited, there doesnt seem to be much of it which means if the price is high then it wont sell well at all

we can only hope E3 is good because right now it isnt looking all sunshine and rainbows

 

[Scribblesense]

Stock always drops when a company announces a risky new investment, so it's really nothing to worry about.

What I do find interesting is that, apparently, Nintendo's stock jumped 2.4% last night, while Microsoft's fell 1.4%.
Nintendo [http://finance.yahoo.com/echarts?s=NTDOY+Interactive#symbol=ntdoy;range=5d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;]
Microsoft [http://finance.yahoo.com/echarts?s=MSFT+Interactive#symbol=msft;range=5d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;]

I'm guessing investors saw that Nintendo was doing what Sony wants to do, but cheaper and with a more solid install base (simply due to their effective launch). Very, very, interesting.

 

[shial]

They basically announced and even said they are putting out a PC as a Playstation so people are not going to be all that impressed especially since it makes it really easy to compare systems. A cutting edge GFX does more than 2 teraflops (My 670 is rated as doing 2.4 teraflops, a 680 can do 3) so its not impressing me at all. Also Sony is in dire straits so they can't afford to subsidize it like they did with the PS3. Sony is going to bleed red ink with the hope it will take off before they bleed to death from it.

 

[Proverbial Jon]

I completely forgot about Tetraphobia! I'm surprised that Sony, a Japanese company, would actually use the 4 in their product when this sort of superstition is, allegedly, so prevalent in their culture.

I hate to have to navigate this apartment block!

 

[devilmore]

I'm glad they called it PS4. Skipping the 4 out of superstition would've been ridiculous and pathetic for an international company.


Also interesting that there's a 24th floor...the japanese numbergins system is extremely systematic, the 4 in 4, 14, 24, 40 etc is always the same character.

 

[cerebus23]

score one for sony trying to be first this time, rather than last and short shipped which put it squarely in last place in the console wars this gen.

but no pricing info at all even with specs and a release date is kind of odd. not showing the box, again kind of odd they usually have some prototype setup even if it is not the final they could have showed something so people could look at it.

and global recession is always iffy to release a 300 to 800 new console, sony is already struggling badly, and they had any number of recent missteps, and failed products from a commercial standpoint.

and investors having no idea what the margins on this thing are going to be since they have not even given a hint of cost or pricing. recent history says sony is going to be eating a good chunk of the cost of these things like they have for all their recent gaming hardware trying to gain a foothold again.

 

[Adam Jensen_v1legacy]

I completely forgot about Tetraphobia! I'm surprised that Sony, a Japanese company, would actually use the 4 in their product when this sort of superstition is, allegedly, so prevalent in their culture.

I doubt that's a contributing factor in stock drop. Really old people in Japan might be superstitious, but somehow I doubt that teenagers and young adults give a shit. Yakuza 4, Metal Gear Solid 4 and Devil May Cry 4 are all very popular in Japan.

They basically announced and even said they are putting out a PC as a Playstation so people are not going to be all that impressed especially since it makes it really easy to compare systems. A cutting edge GFX does more than 2 teraflops (My 670 is rated as doing 2.4 teraflops, a 680 can do 3) so its not impressing me at all.

PC hardware is definitely more powerful. But the strength of consoles was always in how optimized games are and how efficient they are at using the power that consoles give them. Basically what that means is that consoles can do more with less. I'm excited to see if that will change now when the new console is so much like the PC. It probably won't change as much for consoles. They will always be able to do more with less, but I wonder how that's gonna reflect on PC gaming. Are they gonna start releasing PC ports that are better optimized than the ones we have today.

 

[Jesse Billingsley]

I'd be pissed too if some major game company said they were going to unveil their brand spanking new console to the world, and then only show us a damn controller with a damn touch screen. Woohoo I am so excited.....

 

[GonzoGamer]

Besides the reasons mentioned (and honestly, I don't think the #4 holds much sway with serious investors who do research), investors just saw Sony drive off this cliff a year ago and it didn't go too well. Then they saw Nintendo drive off this cliff a few months ago and it didn't work out well then either. Now they're going to double down with the Vita and drive off the cliff again with another big new product like Thelma & Louise.
To investors, the market doesn't look to good for new game hardware right now.

 

[TheSYLOH]

Actually Steven Bogos is wrong about the Character for 4 and death.
In the characters are completely different.
In Chinese however they are both PRONOUNCED exactly the same. Sort of like weather and whether, instead of like the word tear (meaning water from eyes or rip in something).
It stands to reason that the Japanese pronunciations of the words are similar. If not there are always the Chinese investors.

I find it hilarious that almost all Chinese Numerolgical Superstition is Pun based. The words for 8 and Luck sound alike, so 8 is therefore lucky.

 

[Busard]

I'd be pissed too if some major game company said they were going to unveil their brand spanking new console to the world, and then only show us a damn controller with a damn touch screen. Woohoo I am so excited.....

Question: Why does so many people care about what the damn box looks like ? I thought the point of a console is what it's capable to do and what games it runs.