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Sony To Sell Off All 9.5 Million Shares Of Square-Enix Stock

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#1 Showan

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Posted 16 April 2014 - 16:52

Sony’s most recently closed fiscal year (ended March 31, 2014) was a financially trying one for the company. In February, the company warned of a $1.1 billion loss for the period, which was followed by layoffs and closures in the United States and abroad (including the profitable games division).

Today, Sony Computer Entertainment, Inc. has announced it will sell all 9.52 million shares of Square-Enix stock it is currently holding. The deal was struck with brokerage firm SMBC Nikko Securities and will see a cash infusion of approximately ¥4.8 billion ($47.1 million).

The exact transfer price will be published on April 17. Sony will include the capital gains in its earnings projection for 2014, which will be announced on May 14 in conjunction with its full-year 2013 results.

[Source: Sony via Siliconera]

 

Our Take
There are two sides to this transaction. Sony needs the cash, and this will help buoy the finances a bit. However, it could also be seen as a sign of no-confidence in the Final Fantasy publisher. That company has been struggling due to extremely large budgets that simply can’t be recuperated with sales (as evidenced by labeling strong sellers in 2013 as “underperformers.”)

The good news is that, internally, things might be getting back on track. Final Fantasy XIV has performed well, and Square-Enix has touted the success of Bravely Default in the west (thoughseemed surprised by sales). Square-Enix must get a handle on what regional audiences want.

 
 

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Filed under: newssonyfinancesquare-enix
 
 
 
 
 
 
 



#2 Thief000

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Posted 16 April 2014 - 17:15

Too bad for Sony that $47.1 million doesn't cover $1.1 billion. That company is truly bleeding money it seems and that even with the PS4 out and doing well.
I don't think this will shake SE up that much, but they have been underperforming with the FF13 series.
I'm skipping 14 as I didn't like 11 and am not much of an online RPG player, but I hope 15 (former versus 13) can make them come back to former glory at some point.

#3 theyarecomingforyou

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Posted 16 April 2014 - 17:29

I honestly don't understand how companies like Sony can continue to operate. Sony has been losing money for years and it has a terrible credit rating. The PlayStation brand might be famous but it doesn't earn any money, just like the Xbox. Selling off shares in Square Enix does nothing to help Sony's long-term prospects. Something drastic needs to be done or else the company will face bankruptcy. In fact one report I read said that there is a 78% chance of Sony going bankrupt in the next two years.



#4 Geoffrey B.

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Posted 16 April 2014 - 17:42

with a poorly as sales have been lately for Final Fantasy games i am surprised they have not just re-done FF7 like the gamers have been asking for since the PS3 was launched.



#5 perochan

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Posted 16 April 2014 - 17:59

if only Square-Enix would listen to gamers and remake FF7... and that would probably bring back the fame SE once had.



#6 Andrew

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Posted 16 April 2014 - 19:59

Considering SE haven't been exclusive since what, FF12?, this is a good move for Sony.

 

God knows what SE are going to do. Ironic the series that saved them is now killing them.



#7 SierraSonic

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Posted 16 April 2014 - 20:20

Heres the problem with Square Enix, they haven't released a good FF in years, two online versions which lose money constantly and no core FF player really wants or wanted. I honestly haven't bought any since FF9. I mean, I bought the repatchs on steam, but that isn't going to bring in the money.

 

Now if sony and SE were smart, or at least trying to make money, that ff7 demo that was shown during the launch of ps3 would actually be a game for ps4.



#8 HawkMan

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Posted 16 April 2014 - 20:33

with a poorly as sales have been lately for Final Fantasy games i am surprised they have not just re-done FF7 like the gamers have been asking for since the PS3 was launched.


For the same reason they're losing money on their new games

Making modern games with the graphics in them is extremely costly. Even when the story and that is already there the graphics alone are movie budget worthy.

Now this is ok for a lot of games. BUT JRPG IS a niche, and while gaming as a whole is growing that niche isn't, in fact it might be shrinking as a lot of the older gamers are dropping off and would rather play games that don't require 50 hours and the memory of an elephant to finish and keep track of the story. And they're not being replenished by new gamers.

Basically it might not be economically defensible to redo FFVII, and they may have to rethink how to do JRPGs completely, shorter, simpler, cheaper.

#9 Aergan

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Posted 16 April 2014 - 20:35

It's a good move for them seeing as Square-Enix as a developer has not created a decent game in the last generation. They spend far too much time on developing a game engine per generation and do little for creating memorable titles.



#10 Gotenks98

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Posted 16 April 2014 - 20:35

A FF7 Remake would be the only thing that would make me buy a PS4.



#11 wakjak

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Posted 16 April 2014 - 20:41

I honestly don't understand how companies like Sony can continue to operate. Sony has been losing money for years and it has a terrible credit rating. The PlayStation brand might be famous but it doesn't earn any money, just like the Xbox. Selling off shares in Square Enix does nothing to help Sony's long-term prospects. Something drastic needs to be done or else the company will face bankruptcy. In fact one report I read said that there is a 78% chance of Sony going bankrupt in the next two years.

 

Blackberry.. look at blackberry, and understand that, as long as they're doing better than Blackberry, they WILL survive.



#12 +Audioboxer

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Posted 16 April 2014 - 20:57

Considering SE haven't been exclusive since what, FF12?, this is a good move for Sony.

 

God knows what SE are going to do. Ironic the series that saved them is now killing them.

 

Pretty much, if anything Square kicked off last gen with 360 exclusives. Don't think they've done much Sony exclusive for ages. Drakengard 3 is the first title for a while. FF14 is only PS console exclusive as MS won't allow cross play with PC servers.



#13 theyarecomingforyou

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Posted 17 April 2014 - 09:18

Now this is ok for a lot of games. BUT JRPG IS a niche, and while gaming as a whole is growing that niche isn't, in fact it might be shrinking as a lot of the older gamers are dropping off and would rather play games that don't require 50 hours and the memory of an elephant to finish and keep track of the story. And they're not being replenished by new gamers.

Final Fantasy was never confined to the JRPG niche. It was one of the most successful franchises at the time and only dropped off due to the poor quality of later releases. I have no interest in JRPGs but I would happily buy a remake of FF7.

 

I mean, space sims are a niche but you wouldn't know it from looking at the success of Star Citizen. Great games extend beyond their genre.



#14 GotBored

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Posted 17 April 2014 - 09:33

Sony's financial reports: http://www.sony.net/...R/financial/fr/

 

Sony's games division recorded sales and operating revenue of 441.8 billion yen ($4.35 billion) for the quarter ending Dec. 31, 2013, according to its latest financial results, a 64.6 percent year-on-year increase primarily due to the launch of the PlayStation 4 in major markets. 
 
The games sector also reports an operating income of 18 billion yen ($172 million) for the quarter, a 13.4 billion yen increase on the same quarter last year, attributed to an increase in PS4 sales and probably due to PS+ being required for online play.

 

Sony's Entertainment Division is making money... lots actually.

 

I find it odd that people think when a company reports a loss than it means its bankrupt. If Sony made $2 Billion in profits for the fiscal year and then re-invested $3 Billion by buying shares, property, private corporations, R&D or etc then that is considered a $1 billion loss for the fiscal year.

 

Sony Corp made $78.52 Billion in Sales (Microsoft Corp made $72.93 Billion)

Sony Corp owns $160.3 Billion in Assets (Microsoft owns $128.7 Billion)

 

Sony just owns some Square-Enix shares and are selling them off cause the company has had poor sales for years and isn't really a good investment. Sony is just cutting away the fat (Poor Earners) which includes its PC Division which runs at a large loss including the VAIO brand this year. TV Division is also being split and then one half is being sold off while Sony keeps the premium TV Side.

 

I should have bought shares in Sony Corp in February after the reports because SNE stock dropped to $8/share and now it is at $19.. Would have more than doubled my money and it looks to keep rising with the sale of PC division and splitting of TV division. All that's left is profitable Sony divisions.



#15 spenser.d

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Posted 17 April 2014 - 11:43

If you invest $3bn in r&d and it puts you in the red, you didn't make a profit at all. How you put it isn't how it works. You can bury your head in the sand all you want but Sony is struggling as an entire company at the moment. I would expect and hope they pull through but that's just how it is.