CE-Oh no he didn't, part XXXVIII: Peter Moore tells Sony it's failing

While Peter Moore wasn't exactly this forthright when chatting it up with us, it's not totally out of character for execs to lash out at rivals from time to time. In the latest chapter of CE-Oh no he didn't, we find Mr. Moore claiming that Sony's "long-term business plan of being successful in Japan is crumbling." Moreover, he continued to knock the PS3 by sidestepping questions of why the Xbox 360 has sold so miserably in the Land of the Rising Sun and suggested that Sony was the one that should be worried about "getting outsold six-to-one." As a finisher, Peter added that he had "built a business plan for Japan," and while sales have indeed been lackluster, he claimed that "Sony was missing its plan by much more" than he was missing his. Seriously, them's fightin' words there.

[Via DailyTech]

[Matthew @ Jul 17th 2007 3:37PM]

This should be an interesting fight, let the flamewars begin

[Blackstar @ Jul 17th 2007 4:57PM]

Console Thunderdome! Two nerds enter, one nerd leaves!

[HyperHacker @ Jul 31st 2007 4:06PM]

...Then the other nerd leaves shortly after after being declared the winner!

[Mark @ Jul 17th 2007 3:39PM]

Haha, honestly, I have to say I think he's probably right. Especially given the "price drop", Sony's moves lately seem to be acts of desperation.

[nikster @ Jul 17th 2007 7:10PM]

Sony is worried about the Wii. They have the xbox safely in their pocket, still outselling it with the PS2 and creeping up on it with the PS3. Time is on Sonys side here.

They have nothing at all to challenge the game-changing Wii - I think they are silently hoping that it will just go away. The stock market seems to disagree with Nintendo valued higher than Sony since June.

[SimbaDogg @ Jul 17th 2007 9:09PM]

jesus, that's just a dumb thing to say. So i guess the dropping prices of HDTVs are because Pioneer, Samsung, Sony, Sharp...they're all getting desperate. I guess the falling prices in Intel and AMD processors is because they're getting desperate. I guess the falling prices of the beloved ipod is because apple is getting desperate.

NO, THEY'RE NOT

As manufacturing prices get cheaper, usually most business pass on savings to their customers. If you can sell MORE units, with the same amount of margin...you make more money? Interesting isn't it...the whole "how to make more money" thing..

[bob cobb @ Jul 17th 2007 3:40PM]

Well hes got a point. If the PS3 can't sell well in Japan where can it?

[Brian @ Jul 17th 2007 3:41PM]

sometimes i think engadget just posts stuff like this to start flamewars in the comments. Time to sit back, crack open a cold one and have a few good laughs.

[TheGuy @ Jul 17th 2007 3:41PM]

Sorry, but seeing as this comment is coming from Peter "Sega Dreamcast" Moore I don't hold much wait to his judgment.

[ark_v2 @ Jul 17th 2007 3:44PM]

amen

[MastrCake @ Jul 17th 2007 3:55PM]

Hmmm... what about Mr. "Gamecube" Iwata? He had a failure, but jumped back into the fight. Peter Moore is the same way.

[pencilsharpener @ Jul 17th 2007 4:40PM]

incomplete analogy.

Sega never recovered in the console market, while Nintendo went on to make two of the most successful consoles (DS and Wii), recapturing significant market share.

[Mike @ Jul 17th 2007 3:44PM]

Maybe he should answer why he built such a pos system?

[Alex @ Jul 17th 2007 3:51PM]

This is the way it should be! I would rather watch the CEO's of the company fight back and forth then watch the fanboy minions on the internet do it instead.

[Bamiller3 @ Jul 17th 2007 3:59PM]

Am I the only one who thought that was a picture of James Lipton?

[Heath Stahl @ Jul 17th 2007 4:07PM]

Hardly a "Ce-Oh no he didn't" worthy story. Although he deflected the question his point is this: Sony expected to do well in Japan, Microsoft expected to do well in the US. Sony expected to ramp up and eventually do well in the US, Microsoft expected a long uphill battle in Japan.

Reality: Microsoft did well in the US and is fighting the uphill battle in Japan (below expectations but not dramatically). Sony has not done well in Japan up to this point (or at least nowhere close to their expectations) and Sony is building in the US.

Bottom line is nobody, short of maybe Nintendo, thought the Wii was gonna be the hit it is.

[Anthony @ Jul 17th 2007 4:25PM]

Business expectations are solely used as a KPI for internal auditing purposes - and to assist their shareholders in the stock market game. When it comes to true market success, expectations mean nothing - it's simply about sales. The facts are these: In the U.S., the 360 is outselling the PS3. In Japan, the PS3 is outselling the 360. And across the board, the Wii is outselling everything. Outside of conference rooms and PR briefings, the word "expectation" shouldn't even be uttered. Sales are sales, and Moore's comments are ridiculous, because he's losing in Japan. End of story.

[Jacob @ Jul 17th 2007 4:09PM]

Mr Moore is trying to throw the attention that his console is falling apart by pointing out that the PS3 is not trippling the sales that the Xbox360 did all over the world. He throws out BS to keep the medias eyes off of his consoles downfalls. All I have to say is.. Moore you better hope Microsoft and all it's money does not fall back and turn your precious Xbox360 into the Dreamcast2. You should remember it well since you were part of it's downfall also. Dreamcast was also considered a good system.

[thegrey @ Jul 17th 2007 4:11PM]

*DJ Peter Moore Resigns From Microsoft To Return To Northern California

[thegrey @ Jul 17th 2007 4:17PM]

*DJ Peter Moore Named Pres Of EA SPORTS Label

[peshue @ Jul 17th 2007 4:12PM]

He kinda does have a point, Sony went from being a dominating force in japan to nearly nothing. MS never had anything going for them in Japan.

[Anthony @ Jul 17th 2007 4:21PM]

No, he has an excuse - and a poor one at that. Before the 360 launch, there was all this talk of a strategy to exceed expectations in Japan. Now, after failing miserably, it's all "well, we had a plan, and we're fairly close to it - closer than Sony is". True, the PS3 is underperforming in Japan - but it's still outperforming the 360, rendering Moore's "point" completely moot. He should focus on U.S. sales, where the 360 is currently besting the PS3, instead of drawing attention to how poorly the 360 has shown in Japan, regardless of expectations.

[alexhrose71 @ Jul 18th 2007 9:36AM]

Obviously not many business majors in here LOL ... Peter was right - all he is saying is that Sony probably forecasted shipping several million more PS3s in Japan to date than they had, whereas MS probably forecasted at most 1 million. As such, the global business plan @ Sony for PS3 sales is that much more affected by the missed forecast target than the global business plan @ MS for 360 sales.

This isn't a lie, its obvious, if you have the simplest understanding of what is being talked about.

The 360 only missed its 2006 global sales target by 400,000 (to the math failures thats FOUR HUNDRED THOUSAND). 11.6 million (ELEVEN POINT SIX MILLION) were sold, out of a forecast of 12 million (TWELVE MILLION).

Missing your global forecast by 400,000 is nothing. Is the PS3 on track in Japan - no its off by several million. Is it on track in the US, no again, off track by several million. Peter was right. Arguing against these simple facts is just stupid.

[Anthony @ Jul 17th 2007 4:16PM]

So, to recap, in the Japanese market, the PS3 is dramatically outselling the 360, but since that's what Microsoft expected, Microsoft is doing better than Sony? Let's say I expect to sell 2 of my patented electric nail clippers. I then go out and successfully sell 2 - one to my mother, and another to my deranged cousin. Meanwhile, my neighbor expects to sell 1 million pairs of electric scissors, but sadly only succeeds in selling 250,000. By Moore's logic, I should consider myself the victor, because I met my expectations. But something tells me my neighbor is raking in slightly more revenue. And last time I checked, a business' success is measured in revenue. But hey, whatever lets Microsoft's Japan Division sleep at night.....

[TheJeffer @ Jul 17th 2007 4:42PM]

You're making one big mistake with that argument. A business in the long run doesn't care so much about revenue... they care about profit. In your example, if your neighbor sold 250,000 of his clippers at a loss of $1 per clipper, he might pull in a lot of revenue, but in the end, he's $250,000 in the hole. If you sold 2 of your clippers at $1 more than cost, than you'd make $2. $2 in your pocket is much better than OWING $250,000.

The other big thing you're forgetting is that Microsoft is trying to break into the Japanese market, and thus doesn't depend on it for a good chunk of it's sales. If they don't sell many 360s, it's no big deal, because they didn't expect to. Sony on the otherhand, is depending on some large numbers over there, and if they don't hit those goals, it looks very bad to their shareholders.

[Anthony @ Jul 17th 2007 4:52PM]

@TheJeffer

Okay, I'll bite. Now show me the numbers that say Microsoft is making more PROFIT in Japan than Sony is, and you will have proven your point. Otherwise, I stand by my initial assessment: Sony is outperforming Microsoft (in Japan), and therefore Sony is more profitable in Japan than Microsoft is. And therefore, Moore's comments are unfounded.

[TeaJoffel @ Jul 17th 2007 5:40PM]

that's in the short term.

If you have enough money, and manage to keep selling below cost and capture the entire market, and thereby putting your competitor out of business, then you have as long as you want to recup those losses you made by charging whatever you want in the market, since you are now the sole supplier. This is what companies used to do, but is now sort of frowned upon, but they still do it if they can get away with it.

[Anthony @ Jul 17th 2007 5:04PM]

And, just so we're clear, both the PS3 and the 360 are sold at a loss. Much like Apple's iTunes store, the revenue stream of selling those systems leads to indirect profits through accessory and software sales, licensing, etc. Only the Nintendo Wii is being sold above cost, and is thus profitable with each unit sale. Initially, it was likely that the PS3 was being sold at a bigger loss than the 360, but I haven't seen any updated reports. Still, I think it's safe to assume that, directly speaking, both Sony and Microsoft suffer similar losses from each unit sale of their console. It stands to reason that increased unit sales in Japan of the PS3 over the 360 result in increased sales of software and accessories, etc. Thus, I believe it's reasonable to surmise that Sony is enjoyable more profitable revenue streams in Japan than Microsoft is.

[Jeff @ Jul 17th 2007 5:20PM]

http://2old2play.com/News/Xbox_360_Drops_40__in_Manufacturing_Costs
http://www.videogamesblogger.com/2006/11/16/ps3-loses-up-to-306-per-unit-xbox-360-profits-76-per-sale.htm
And etc. This info is all over the web.

The 360 has been sold at a profit for quite some time now. The PS3, especially with recent price drops, is still selling at a substantial loss.

[Anthony @ Jul 17th 2007 6:37PM]

@Jeff

Any profit margins that Microsoft makes on the 360 unit sales will likely be absolved by the costs in extending their manufacturer's warranty to an unprecedented 3 years. And that's notwithstanding any recalls. But you've only succeeded in taking this thread way off point: the simple truth is that Moore's comments do not make any sense, since the PS3 is selling more units in Japan than the 360.

[SimbaDogg @ Jul 17th 2007 9:27PM]

@ jeff
please dont post websites showing manufacturing costs from launch for the PS3, those are not even close to what they are now. Considering that was what they were losing before, and the way the prices for blu ray diodes have dropped...i wouldn't be surprised if they're just about breaking even on each sale now.

[Sky @ Jul 17th 2007 4:16PM]

Wow what a pissing contest we have here... the reality is MS is the last company out of the 3 to talk shit.. they have ZERO future in Japan.. the word Japan shouldent even come out of his mouth

[Jeff @ Jul 17th 2007 4:22PM]

Way to send him over the edge engadget.

[Kris Burbidge @ Jul 17th 2007 4:27PM]

Wii FTW!

[Karan @ Jul 17th 2007 4:32PM]

At 15-to-1 he really shouldn't be talking about the Japan market.

[carlos @ Jul 17th 2007 4:37PM]

Sony's "long-term business plan of being successful in Japan is crumbling."

At least Sony's CEO still has a job. lol

[John @ Jul 17th 2007 4:40PM]

Did he say this before or after he left his job?

[JimyD @ Jul 17th 2007 5:20PM]

Classic example of "People who live in glass houses shouldn't throw stones."

[Chuckles McGee @ Jul 17th 2007 10:19PM]

Still, let's give him credit for not making concrete, outlandish predictions like Sony's people...

[MosquitoControl @ Jul 17th 2007 5:42PM]

So Microsoft is failing in Japan, where it expected to fail, but not by this much.

Sony is failing in Japan, where it expected to triumph.


How is he not able to recognize his own problems but comment on someone else's? He's entirely right, Sony's shoddy performance in Japan is much, much more damaging for that company than Microsoft's much shoddier performance in Japan.

Microsoft failed there.
Sony is failing there.
Microsoft's failure is expected.
Sony's is surprising.

People are trying to discredit him because the Xbox isn't selling. So what? Why compare? He isn't claiming that the 360 is more successful. He's claiming it's more successful relative to expectations, maybe, but that's true. And he's claiming the PS3 is failing far more than expected. Which is true.

[Evan @ Jul 17th 2007 5:45PM]

Think of it like a poker game...

Peter Moore only had a pair, so they only bet a few chips which he could afford to lose. Ken Kutaragi had a full house, thought it was a guaranteed win, and went all-in. But Shigeru Miyamoto surprised everyone with a royal flush. The end result is: Peter loses his hand but stays in the game, while Ken goes bust.

(I know that doesn't exactly follow poker rules, but you get the idea.)

[Craig Cruden @ Jul 17th 2007 6:09PM]

When you have to publicly lash out at your competitors, it is a sign that you lost.

If you were winning, you would just continue what you were doing and not worry about the also-ran. Does it mean that PS3 has won? No, but Microsoft definitely has not. Right now, the Wii seems to be outselling both of these game machines, and the owners seem to be quite happy with it. I do believe that the PS3 is a longer term play since all of these hi-end machines (other than the Wii) seem to be a little ahead of the curve, and as hardware costs come down - and more people are using HDTV equipment -- that the PS3 and PS3 has a good chance. One area that the PS3 has done succeeded, is putting blu-ray ahead of HDDVD (HDDVD has all but lost). I think this generation (PS3) of gaming platform will be around for a long time (much longer than previous platforms) - and future revisions will just be incremental updates. Which means games developed now will provide a foundation in the future. IANAG (I am not a gamer, and I do not own any of the game platforms -- just an observer of history in the making)

[MosquitoControl @ Jul 17th 2007 6:38PM]

Chris, while your analysis is all well in good in most circumstances, it shows that you aren't a gamer. And that you misunderstood the context.

With the context, this isn't a lashing out, or even bravado. It's a level-headed analysis. A fair one. Not of his own company, of Sony. His analysis of his own company is predictably skewed, but still acknowledges reality.

With gaming, think of it like sports. Sports wouldn't be sports without trash talking. Gaming is somewhat the same, especially around E3. It's a lot of discussing the other opponents. It's often coming from Sony, and it's often pathetic and juvenile, but all three do it. They really have no choice, it tends to be the bulk of the questions they receive.

[SimbaDogg @ Jul 17th 2007 9:43PM]

you're spot on for a good part of your argument, but the thing that doesn't really make sense to me, and maybe someone can clarify this: why would moore still be talking trash on a system, which wasn't released the same time as his. i mean, look at it this way, it'd be like a 12 year old kicking a 4 year olds ass...and thinking he's tough for doing so. Make sense? Bad analogy maybe, but one system is simply OLDER, it has matured quite a bit...and may be hittin the top of its growing curve soon. As far as the PS3, its still in its infancy.

[MosquitoControl @ Jul 17th 2007 10:34PM]

That's why it's not good to compare the two.

And why he said it's failing, not it's failed.


It's absolutely failing. There is plenty of time for that to change. The game is still early, and a year from now the playing field could have changed drastically. I'd expect Sony to still be well behind Microsoft and Nintendo a year from now, but they'll almost definitely be gaining on Microsoft.

[lopez.dennis @ Jul 18th 2007 10:03AM]

Peter Moore the console killer.

[Kevin @ Jul 19th 2007 10:24AM]

While Sony and Microsoft fight it out for Japan Nintendo is outselling the PS3 6 to one and the 350 20 to 1.

Hahahahahaaa

[trongle @ Jul 20th 2007 5:08PM]

Too bad these two companies are too busy quarreling over each other instead of figuring out how to sell systems like the big N.

[ark_v2 @ Jul 17th 2007 7:42PM]

Because it isn't as vital for them as it is for nintendo. If SCE or xbox disappear, believe me, sony nor microsoft will suffer that much.

[Garrett @ Jul 22nd 2007 4:52AM]

The PS3's problem is the lack of games. Once that picks up sales will too.

Not to say a $100 price drop wouldn't help matters, but even with the price aside there are many who would pick the 360 because it has more shooters and, laughably, a roughly equal number of RPGs.