Failed business console model

  • JonathanCaraballo 15 Jan 2013 06:08:10 2 posts
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    The problem with the Playstation 3's business model was the massive upfront costs. Sony invested $400 million for the Cell, and then an additional $1 billion for the Cell factory. You can add another hundred million in marketing costs for the Playstation 3 at first. Also - Toshiba and Sony had to foot the costs to develop the RSX - another massive investment in the RSX factory. At least another $1 billion - the RSX has 3 times the transistors that Cell does, and is more complicated. Plus the substantial royalty they had to pay Nvidia to use their design. At least $25 per console. You might as well add the Blu Ray factory for the Playstation 3, at least another $100 million. And the factory to assemble the parts, another 1-$200 million. We're talking about $2.5 billion in start-up costs - before any profit was made. The consoles weren't even sold at a profit - only at break-even costs. Thus the reason Nintendo and Microsoft were virtually driven out of the console business at start. They had a similar model. Microsoft took the $4 billion in losses and continued - that was something. But Nintendo - called it quits in the next-gen console business.

    However with the Playstation 4 processor, the enormous costs to develop the Cell was effectively nullified. However we're still talking multi-billion dollar investments for the factory. Luckily - Playstation 2 sold 170 million units, many at a profit, and tons of software, all of which profited Sony $6-12 per software. So $20-$30 billion in profit.
  • b0rk 15 Jan 2013 06:09:37 7,655 posts
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  • X201 15 Jan 2013 06:53:59 18,461 posts
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    Re-submit your work with citations and references and I'll give you one mark for your anti-Sony zeal.
  • jonsaan 15 Jan 2013 07:53:39 26,774 posts
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    Does any of this really change the fact that you haven't been outside for ten years?
  • neilka 15 Jan 2013 08:07:29 21,208 posts
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    What a Caraballbag
  • Angry_Man_Dan 15 Jan 2013 08:49:26 667 posts
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    Wank thread alert - it's spreading!
  • Deleted user 15 January 2013 09:00:21
    Did I ever tell you want went wrong with Kwik Save? It all started to go wrong in the very early 1990s.

    In 1994, Kwik Save acquired 117 supermarkets from Shoprite, a fellow food discounter, for 45 million. The Company subsequently accepted that it was focused too much on acquisitions rather than its existing operations.It went on to announce the closure of 107 under-performing stores in 1996. Bad news!

    Kwik Save became part of the Somerfield group in 1998 when it and Somerfield merged, operating as a trading division of Somerfield Stores Ltd. Following the merger Somerfield's Food Giant discount supermarkets were re-branded as Kwik Save.

    Originally all Kwik Save stores were to be re-branded as Somerfield, now taken over by The Co-operative Food, but it was quickly realised that the look and feel of existing Kwik Save stores featuring warehouse style wooden shelving, space-saving small checkouts and narrow aisles would not lend itself well to the Somerfield fascia. For this reason, the original plan was abandoned and the best Kwik Save stores were cherry-picked for conversion, based on location and market demand, receiving a full refurbishment.

    Still with me? Excellent. I shall copy some more from the Kwik-save wiki page then. I can't be arsed making it look like I thought about this myself, when in fact someone else did, because then I'd post more jumbled nonsense like the OP. I'll continue.

    On 27 February 2006, Somerfield Stores Ltd sold the Kwik Save brand and 171 stores to BTTF, an investment vehicle headed by Paul Niklas, for an undisclosed sum. Somerfield re-branded the 102 Kwik Save sites it retained under its own name and a further 77 stores were sold to other retailers, including 19 to Netto.

    According to a report in PR Week in April 2006, Kwik Save hired a marketing agency in a bid to revitalise the brand and reposition it as an alternative to the leading supermarkets. Around 200,000 was allocated to Public Relations as part of a marketing brief worth 4m-5m.

    It was announced in October 2006 that a 30m refinancing package from unnamed investors was put in place, part of which was used to finance the purchase of a further 45 more stores from Somerfield. Some of those purchased were included in the Competition Commission investigation ruling into Somerfield's purchase of 114 Safeway Compact stores in 2004.

    In December 2006, The Sunday Times reported that Kwik Save was suffering from a "sharp fall in sales and mounting losses", and was seeking another financial injection. My heart sank. On 22 January 2007, it was reported that Kwik Save was suffering problems over delays in payment to its major suppliers, with stocks of many core products being limited as a result.

    On 29 January 2007, it was reported that a new investor was about to inject 70 million into the Kwik Save business. In mid-February 2007 the company announced that it had managed to source a 50 million refinancing package to revive the failing retailer. In March 2007 the 50 million deal was finalised and Paul Niklas returned as managing director of the company. The holding company changed its name from BTTF to Kwik Save Limited.

    So far I've managed to edit out all those annoying reference numbers but I don't know if I can keep it up. It's hard work.

    On 29 May 2007, Kwik Save announced plans to close 79 stores with immediate effect. All stores affected were closed by 30 May 2007. Kwik Save's market share fell from 1.2% in the 12 weeks to April 2006 to 0.2% in the same period in 2007, according to TNS Worldpanel. BBC News also reported that Arla Foods UK stopped delivering fresh milk to the Kwik Save chain in the week beginning 21 May 2007 due to "payment problems".[19]

    On 14 June 2007, Kwik Save announced plans to close a further 22 stores with immediate effect in order to protect them from the danger of administration. The group had now closed a third of its stores across the UK, leading to up to 700 job losses.[20]

    On 21 June 2007, Kwik Save announced to USDAW that it would not be paying staff, who were expecting to be paid the following day.

    On 6 July 2007, the company was placed into administration. Kwik Save was left with 56 stores, which were transferred to a new company called FreshXpress run by Irish retail entrepreneur Brendan Murtagh. Under the deal all 56 stores stayed open, saving around 600 jobs. Most employees of Kwik Save were unlikely to be paid, having to join other creditors to claim money they were owed from the Official Receiver, unless they were part of the 56 stores going to FreshXpress.

    And there, the Kwik Save wiki history ends. Think about it.
  • bad09 15 Jan 2013 09:01:11 8,225 posts
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    There doesn't seem to be a point to the thread so I'll give it one. Here is a cat in disguise

    Edited by bad09 at 09:06:24 15-01-2013
  • Deleted user 15 January 2013 09:03:52
    How can you tell it's really a cat when it's in disguise?
  • bad09 15 Jan 2013 09:05:56 8,225 posts
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    Cats in disguise never get past me.

    / taps nose
  • Deleted user 15 January 2013 09:06:46
    Is this how Pachter started?
  • beastmaster 15 Jan 2013 09:07:18 18,102 posts
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    My name is uncle groucho you win a fat cigar

    Edited by beastmaster at 09:08:09 15-01-2013
  • roz123 15 Jan 2013 09:47:28 7,112 posts
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  • Deleted user 15 January 2013 12:34:17
    Is that a raccoon I see with those cats?
  • SClaw 15 Jan 2013 12:41:06 826 posts
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  • RobTheBuilder 15 Jan 2013 12:43:35 6,976 posts
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    Note to @vizzini : read the OP. That is what you sound like when you talk about processors.
  • bad09 15 Jan 2013 13:18:24 8,225 posts
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    That is just awesome, more so if you imagine the comical gruffbat bale voice.
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