Tokyo amazed that Sony's gaming divison didn't make more money... fines $244mil

[Trauma-san]

The Tokyo Regional Tax Bureau served Sony and Sony Computer Entertainment with a notice for 74.4 billion yen (about $650 million) in unreported income, ITmedia reported today. As a result, the tax authority claims that Sony owes about 27.9 billion (over $244 million) in additional taxes. Both Sony and SCE plan to protest the taxes, as is evident from the statement they released today condemning the tax bureau's behavior: "We have always made appropriate tax payments in compliance with the tax codes of [the relevant] countries; this notice [from the tax bureau] is unsatisfactory."

The penalty stems from the "transfer price tax system," which is designed to prevent companies from performing transactions between their domestic and overseas affiliates at lower than usual prices. The allegedly unreported revenues are related to transactions between SCE and its US subsidiaries in connection with its game business between FY 1999 and 2004, and CD and DVD disc transactions between Sony and multiple overseas subsidiaries from FY 2003 to 2004. The tax authorities hold that Sony was under obligation to report these transactions as they occurred at lower than normal prices.

For its part, Sony and SCE have stated "we are confident we can avoid this double taxation" by invoking [international] tax treaties to open bilateral talks.



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Here, I'll translate.  Tokyo is saying that Sony had to have made more money than they reported, surely Sony's sales weren't as shitty as Sony themselves claim (Sony's gaming division only made like 40 million dollars last year).  So, Tokyo has fined Sony 244 million dollars and accused them of lying about their game sales.

In response, Sony said basically "No, no, our sales really WERE that shitty.  We can't give these fucking things away, and everyone we sale, we lose money on.  We really DID only make 40 million last year, we suck at the video game business.  Nintendo is whipping our ass and making almost a billion dollars off of what we only made 40million off of." 




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In related news, the first analysts (besides me) are finally coming out with the balls to say that Sony is going to finish the next gen wars dead fucking last.

http://www.gamespot.com/news/6153458.html

Analyst: PS3 could be third
DFC Intelligence says Sony could "easily go from first to worst"; thinks brand strength, market position can't overcome $600 price.
By Tim Surette, GameSpot
Posted Jun 30, 2006 12:36 pm PT
In the next-gen console race, there are three main competitors: Microsoft, Nintendo, and Sony. While many would love to see someone come out with some sort of "Everybody is a winner, hooray!" scenario, the simple truth is one company is going to be declared the loser. Though the finish line is still far down the road, industry analysts are already predicting who will break the tape and who will bring up the rear.

Sony has clearly been the favorite in recent years thanks to the unparalleled success of its PlayStation and PlayStation 2, but one analyst firm believes that the company may tumble down from the top of the heap. In a memo sent out today, San Diego-based DFC Intelligence explained how Sony could go from first to worst.

Though the memo contains the disclaimer that the prediction is "only one of several possible scenarios," DFC appears to be leaning towards Microsoft and Nintendo coming out on top through the next generation.

The main reason DFC sees a slide for Sony is the $600 price tag on the high-end version of the PlayStation 3. Though Sony has touted the machine as inexpensive relative to the hardware contained within it, DFC doesn't think consumers will see it that way.

"Sony has done very little to justify why the system is worth a premium price for consumers that don't care about raw hardware performance and are not hard-core audio/visual consumers," DFC said. "Unfortunately we believe that represents over 90% of the consumers in the marketplace."

DFC recognizes that software plays a large part in buyers' decisions, and points out that the PS2 was so successful because of its diverse portfolio of games and large third-party support. The broad range of software made the PS2 "a complete entertainment system for the family priced under $300," said DFC.

"With the PlayStation 3 the company is going after the high-end power user. It is almost as if Coca-Cola not only decided to go with a new formula, but also decided to exit the low-brow soft-drink business to go into high-end wines," DFC explains. "Of course, there is a market for high-end products but it is 1) a very different consumer type and 2) not nearly as big as the blue collar mass market. Wal-Mart sells more toys than FAO Schwartz and McDonald's sells more beef than Ruth's Chris Steak House."

There doesn't seem to be much of an easy way to right the ship, either. According to DFC, Sony may have drastically underestimated the competition and will have a lot of trouble cutting the price, particularly in time for the critical 2007 holiday season.

"A $600 price point is okay for launch but it will not fly in holiday 2007. If Sony wants to drive unit volume 2007 needs to be not only the year of price cuts, but the year of drastic price cuts. There is going to be a shakeup in the video game industry and even if Sony executes perfectly there could be a new market leader in two years."

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And, in other news, the game sales charts are out for last week.  That shitty, shitty system that is breaking sales records all over the world holds the 1 and 2 spots on the sales chart this week, with "Brain Age" coming in at #1 and "New Super Mario" coming in at #2 for the Nintendo DS.  Soon Nintendo will be firing people I've been told by members of this board, the DS is such a horrible idea, it can only capture the top two slots on the sales charts, and they are stealing the systems by the truckload in japan.  Brain Age has been out for months and it's sitting at #1 on the charts?  Come on.  That's horrible, I'm sure they'll be out of business with all that kind of success. 

[Word to Everything]

Look at yourself in the mirror Trauma, you're the only loser here.

[Trauma-san]

I don't know you. 

You know my name, even though I don't post under it. 

Think about that for a minute. 

[Word to Everything]

I don't know you. 

You know my name, even though I don't post under it. 

Think about that for a minute. 

lol weak 

[WestCoasta]

 

[J Bananas]

I don't know you. 

You know my name, even though I don't post under it. 

Think about that for a minute. 

lol weak 

yeah that is weak. kinda makes me worry about what your ethiopian ass has been researching on me. JK we all in the same byrdgang ca-caw!