11 February 2007

The Case Against Sony - Response by Priya Ganapati

Recall a couple of weeks ago (or just scroll down a bit) the thestreet.com piece on Sony. I was harsh, yet fair in my excoriation of the arguments presented in the reportage and commentary. And then I went on vacation...

Priya Ganapati, the thestreet.com reporter and author of said piece graciously replied to my ornery post. I'm flattered by the response, and felt it proper to present her clarifications:

1. Regarding Sony protecting its PS3 franchise. Sure, parents are going to be concerned with violence on video games available for the PS3 and sure they may opt for the Wii. But try looking at this from the Sony perspective. Sony doesn’t want to turn off potential buyers (and a large number of consoles do tend to be gifts), which is why it is publicly saying that it won’t support adult content on Blu-ray, while the Sony supported Blu-ray association will work with adult content producers. I think it clearly shows that Sony wants to have it both ways and lets not forget the PS3 is the primary delivery channel for the Blu-ray player right now.

2. I do agree there are adult video rentals available through the Internet but I do suspect a lot of viewers watch adult content on the Internet now. And that’s a huge huge shift from the 1980 when Everybody went to the store to rent adult movies. So there is a change in user behavior there.

I don't find her arguments wholly convincing, though I'm sure she's accurate on point two regarding the internet being one big porn delivery system.

In any case, Blog Hog Jonathan Last recently bolstered the case against Sony by digging up a report that the Wii and the PS2 are outselling the PS3 in Japan.

However, I am not ready to commit to picking up SNE puts as Bloomberg reported today that the Yen may decline further, which in turn could put upward pressure on the price of SNE shares:

The yen may decline after the Group of Seven industrial nations stopped short of saying that the currency's weakness is a threat to the global economy.

The Japanese currency is trading near a record low against the euro and the weakest in four years versus the dollar as the Bank of Japan holds interest rates at 0.25 percent, the least among major economies. At a meeting in Essen, Germany, G-7 officials sought to reconcile Europeans who want the yen to strengthen with the U.S. and Japan, which say the market should set exchange rates.

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