Every day we’re hearing of a company running through a round of layoffs or going out of business, it’s really not a happy time. Sony is not immune to the economic troubles either. Sony is talking restructuring and that involves a potential head count reduction of 16,000 jobs due to plant closings.
This leaves Sony with some hard decisions. Restructuring can mean drastic changes that effect all their product lines. The PlayStation 3 isn’t currently a shining example of high profit margins. The console needs time to reduce its overall cost, chip sizes and bring profitability. Is it in danger?
“Sony’s not in a position to halt all domestic production but it has to do something that drastic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive.” (gamestooge)
The yen is losing value in our global economy making it more difficult to export the product and build any type of profitability plan. “A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years” (news.yahoo.com) All this noise is making CEO Howard Stringer contemplate Sony’s involvement as a “software only” company, making us recall the changes at SEGA to this same result.
The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company’s focus to software from hardware and cutting jobs in Japan. (news.yahoo.com)
Is this just a case of a fearful executive trying to lay plans for a more stable future? Software is easier to develop, pays for itself quickly and becomes pure profit as it ages. Hardware requires constant upkeep at manufacturing facilities, chip reductions and a boat load of quality planning for first shipment. Would Sony go full software?
Let’s face it, Sony isn’t SEGA, they’ve been developing hardware for consumers since anyone can remember and they’ve been doing it with quality and market penetration. It seems absurd to think they’d forgo hardware designs in replacement of a full software solution to the problem. In addition, Sony has already invested a large amount of cash into seeing PS3 through it’s 10-year plan and letting that die now is realizing a huge loss on investment.
If Sony pushes through the economic and maintenance course, the PS3 will become highly profitable, much like the PS2 last generation (with a slower ramp up for sales). Even if they break even after ten years it seems a lot better than throwing all the effort away.
Perhaps Howard Stringer is talking “software” for the next generation home console? You think Sony will create a PlayStation 4?
… how can being nude drive a podcast’s ratings up? Now, if you were to be doing a videocast … now that’s something.
@Electronic Arts responds to expiring Online Pass:
Oh boy 🙂 … this seems to point out some serious issues at EA. I mean it feels like they automated a little bit too much of their systems.
@Divided memory pool causes lag for Skyrim PS3
The total is the same (256 + 256 versus 512), the reason of the split is not financial. It is technological/design.
@Skyrim Creation Kit landing in January
Hmm, Steam Workshop … it’ll most likely kill the other mod sites. Not in a year, not in 3. Maybe in 4 though.
@QOTW: none. When we go on vacation (1) we don’t go by car, so there is not enough room in the luggage to squeeze in a console, and (2), you don’t really need to go someplace else in order to sit in a room in front of the TV to play games.
“… how can being nude drive a podcast’s ratings up?”
That was the joke, just like a ventriloquist on the radio.
I would really like to see how this South Park RPG is going to turn out, but I’m not getting my hopes up one little bit.
Well seeing that there’s nothing in the news I want to discuss, I tried to leave you an iTunes comment, but apparently I need to give them my credit card number to create an iTunes account. -.-
Anyway, QOTW: No. Can you please come up with better questions of the week that can’t be answered simply with yes or no? =)
And Paul, you miss so many podcasts it’s not even funny anymore. Consider this as official hate mail.
dude paul is gone again , what the hell paul skipping podcast is getting more serious now, we need a good reason when you come back. I guess that’s my first hate mail..
@south park the game .
Wew I didn’t see that coming .ill probably w8 for the trailer or gameplay but I won’t buy the game coz I hate southpark and their stupid animation
@qotw whaaaaatttt this is stupid bringing a console whaaattt impossible good luck on carrying a big bulky system on your way to a resort..
I haven’t been downloading your podcast because of the tests its the first day of test and I’m already tired.
I just started listening. Didn’t know Jordan was from Oregon! I’m originally from Roseburg/Eugene area and moved to Cleveland for school/work now. Great podcast and can’t wait to hear more.
Thanks Justin! I grew up in Eugene and now I live and work just outside of Portland (Clackamas and Beaverton respectively…)
I went to school at UO before heading to the Midwest and have family in Beaverton. Listening to your latest show now. Great stuff!