Seagate Reportedly Loses Some Game Share to Toshiba - But That Might Not Be a Bad Thing

Seagate (STX) apparently has lost some of its game console hard-drive business with Sony (SNE) for the Playstation 3 and Microsoft (MSFT) for the Xbox 360 to Toshiba, according to Avian Securities analyst Avi Cohen.

That sounds bad…but it might not be. Cohen says that he has confirmed with multiple sources that Toshiba won at least a portion of the gaming business at both companies, and that the wins likely came at least partially at Seagate’s expense.

“What is unclear is whether Seagate has made a strategic decision to limit exposure to this segment as its positive impact on profitability and revenues has been questionable,” he writes. In Q4, he notes, “Seagate’s gaming business negatively impacted both revenues and profits as Seagate was forced to commit capacity to this low-end segment that could have been more profitably used to build more expensive, higher-end HDDs.”