Sony Stock Drops After PS4 Event

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Sony Stock Drops After PS4 Event

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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 struggling Vita, the PS4 was shown to have a "supercharged PC architecture" 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 pretty big recession right now. Sony is struggling to stay afloat in almost all of its industries. Its TV division posted a loss for its seventh straight year and the Fitch Group recently downgraded Sony's debt to junk status. 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

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.

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

Japanese people are incredibly superstitious

Ouch, nice generalisation :D

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.

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!

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

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.

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.

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.

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.

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.

SanAndreasSmoke:
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

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
Microsoft

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.

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.

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.

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I hate to have to navigate this apartment block!

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.

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.

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 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.

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.

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.

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.....

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.

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.

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.....

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.

Superstitions are strong in the Asian cultures still. I've seen people freak out over the fact I sleep in my room with a fan on. People who are otherwise completely normal and rational people will believe stuff like fan death. It doesn't surprise me that their stock dropped after using the number four.

This happens before all press releases, the stocks rise as everyone gets ready for the event and starts talking about it, then when it's done the stocks drop down to normal level again

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.

That'd be correct, both "death" (死) and "four" (四) are prounounced "shi", although there's an alternate pronunciation for four in Japanese "yon". But hey.

I knew it! They should have waited for E3.

Dude, I totally forgot that "Shi" was the Japanese word for 4 and "death"! That's a really good point, people are way more superstitious of 4 in Japan than the number 13 is here.

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

It's kind of poetic, really: Handheld consoles get new life (Vita) and home consoles are slowly dying out (Death).

If I believed in Intelligent Design, I'd think God was one hell of a writer.

SNCommand:
This happens before all press releases, the stocks rise as everyone gets ready for the event and starts talking about it, then when it's done the stocks drop down to normal level again

Try telling me that after the press conference when Google announces the definitive release data for Google Glass.

I got a theory that some semi-tech-savvy investors think that with the x86 cpu, a hacker would eventually crack the encryptions and write a relatively simple emulator for it. Boom, rampant piracy without the need for the box itself.

cerebus23:
...score one for sony trying to be first this time...

The PS4 announcement gave me the impression of someone posting the first comment to a thread stating "FIRST!"

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.

Best GPU does 4.5 teraflops now, Nvidia launched the GTX TITAN today. Its 800 though, so the PS4 will be a lot cheaper. Dont forget consoles can get more bang for their buck in terms of hardware, the PS4 and 360 get a surprising amount of performance from their limited hardware.

I don't think the PS4 is about ZOMG super dupa graphics either, the demos they shown do look slightly better than current gen but not all that much. It seems more about the depth of the game and its mechanics from having more resources for level design and physics and so on.

Nghtgnt:

cerebus23:
...score one for sony trying to be first this time...

The PS4 announcement gave me the impression of someone posting the first comment to a thread stating "FIRST!"

Which is hilarious, because the WiiU is the first 8th gen. Console (Based on Chronology. Not Technology!) So Really, the PS4 should say "Second."

This executive video summary of the announcement is brutally onesided, but it does kind of drive home why it was a bad, bad presentation:

https://www.youtube.com/watch?v=0rJDn0jRnUQ

What did we actually get? Specs (which look good, and it's a PC which is even better), the controller, that a lot of huge new cross-platform games would be on PS4 (which everyone knew already), some very interesting networking promises but only the video upload demonstrated (we think).

There were no incredible exclusives shown. The 3D vectorman thing (Knack) looked pretty cool, but it's not a system seller, and neither is yet another Killzone or a team-only racing game. The best stuff (Watchdogs, Capcom) was cross platform. I'm sure they have heavy hitters coming (Santa Monica, Naughty Dog), and whatever the hell Media Molecule is doing will have to be great, but what was shown at the event was pretty vapid. Square-Enix showed off a year old demo.

We got no price, we didn't see the hardware (because it was just all running off dev PCs). We got 'no back compat, except maybe in the future', we got nothing about whether used games would be allowed, we got something about real names being required, and we got SO MUCH footage of developers gushing about how happy they are that it's a PC in a box (instead of a nightmare like the PS3) and throwing around the usual 'synergy' 'unleash' 'creativity' 'the socials', and of course we're told, exactly like we were told for PS2 and PS3, that the hardware is now at the point where it is 'emotional'.

Oh yes, we did get a promise for some Final Fantasy news at E3! Woohoo?

It was definitely a stock drop event.

Adam Jensen:

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.

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.

Specs are nice and all, but 7years later and only a handful of games really utilize the PS3's full potential. The PS3 sold on future potential which has not been realized and here's the PS4 setting up to do it all over again.

Correction, 4 in japanese and chinese have different characters but similiar pronounciation.
In chinese four is pronounce "see" in a higher pitch(四,si); the pronounciation for death is "see" lower pitch (死,si).

On a side note, chinese love the number 3, which sounds alot like "life" or "live". This includes the number 13, which americans consider to be bad luck.

The lack of showing a console and everything else aside, I'm actually quite interested in the PS4. I would be most likely to buy that out of any of the next gen consoles. They seem to be at least trying to listen to what people want and learn from what didn't work in the past. I wouldn't exactly buy one on launch day, but I'll definitely be following news around the release and pricing, etc.

Huh, that's strange. They spent 45 minutes talking about social networking, didn't show much of any actual gameplay in the games they showed. Said they did not add the ability to allow players to play all the games they currently have and want people to cloud stream them, (an impracticality at best). Didn't show the device, didn't state the cost and once again pushed two massive failures on the market (Move/Vita). Not to mention the lack of great features, incompetence and impatience has allowed their competition to see how vulnerable they are to a counter attack.

I don't see how their stock could have possibly dropped...?

So in Japan.... If you have a 4.0 GPA does this mean you were really UNlucky?

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