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Greenberg: Phil Spencer Joining Microsoft's Leadership Team Shows Strategic Importance of Gaming

Greenberg: Phil Spencer Joining Microsoft's Leadership Team Shows Strategic Importance of Gaming
From N4G - November 5, 2017
ImGumbyDammit2h ago(Edited 1h ago)

There is no difference in the structural setup. It was done for tax purposes only. Now if Sony opened up the company to be invested in by others instead of having the same 100% same control they would have as a Sony subsidiary your argument may have more legitimacy. As division is essentially just a LLC. Generally being such would would lessen liability from the main corporation but, since Sony is 100% ownership and revenue is routed directly to Sony proper that liability is still fully held by Sony. E.g. if SIE borrowed a billion dollars as a LLC that would normally alleviate much of the burden of Sony itself to pay back the money. Or if SIE declared bankruptcy it's creditors actions would be limited against as SIE being a LLC. But, once again Sony is so tightly ingrained with SIE the legal status of such normal liability is moot and the court would find such protection not valid. Do you see separate quarterlies? No.

As it stands SIE is still run from and answerable to the HQ in Japan. The equivalence of Phil Spencer VP title is John Kodera as CEO. And he has no more power than Spencer. Do you think if he wants to buy a game company he does not have to check back with HQ. Do you think that SIE does not get allocated funds from Sony as whole or do you actually think they keep all their profits and are run autonomously? If they want to do a price drop do you think they just do it or check with Japan and have them go over the numbers before a decision is made? Do you think SIE says we are going to bring out a new console in 2019 without clearing with HQ?

One of the reasons Sony as a large multifaceted company as a whole is valued about the same as Nintendo a game company only (around 43 billion dollars each) even though SIE is the dominant console maker is because they are a division of of Sony and the negatives of Sony itself get int he way of SIE contributions being fully noted as they are for Nintendo's value. If SIE were spin off as a true independent company with which Sony retained 51% and allowed the market to determine value I am sure SIE in no time would be worth $25-30 billion. Sony overall revenue and market cap may take a hit as one of their best revenues streams is not contributing directly but, would Sony would gain more value in the long run with it's majority ownership of the completely independent SIE grew. Of course, that would actually mean SIE would have to be run on it's own. They would be autonomous. SIE could make different deals. It legally would not have access to Sony proper any more than any other competitor could. If they wanted to use competitor tech (eg. 4KUHD) they could. Japan would not call the shots. That is one of the reasons many heavy hitters largely invested in Sony have over the years called for the actual spin-off of SIE. There is plenty of risk but the rewards of both (Soy and SIE) could be tremendous.

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