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?
@Wii U will cost Nintendo $180 and retail for $300
Well, while the profit margin seems big, hardware is not the only cost associated with the device. Me thinks that they can lower the price all the way to 220 USD, if they need to get the attention of the market.
@Online petition calls for end to Tera ‘censorship’ in EU
Wow! From “Mature” to 12+! Wow!
Dan, loved the “vote with the wallet” point.
Jonah, you are right, Germany does have stricter rules regarding violence in video games.
@Videogame-only Kickstarter alternative debuting at E3 2012
What about indiegogo? Don’t get me wrong, websites that concentrate donations will work ok, but there are already enough of them.
As for buying ownership over a part of the game via a website, with no legal advisors … erm … I see an epic fail ahead.
No developer with the slightest sense of business will accept this.
Ukraine was part of the USSR, and broke off in early ’90 (when most former USSR counties broke off as well).
@NPD: 40% of freemium players pay for in-game upgrades
I think this will vary from game to game. I’d say that 40% pay for upgrades in the best (both quality and market segmentation) games, and the percentage drops for the other games.
@Wii U – Not much to say about this, but the more I see about Wii U the more I realize they’re going for the same strategy of catering for casual gamers. Which is all good ( I am a very casual gamer when it comes to consoles ), but as a dust covered Wii owner I’m just not sure Ill go for it again.
@Tera online petition – I am a MMO gamer, I love sandbox action based MMOs like Tera is supposed to be, but I didn’t like what I saw of Tera so far, the game just looks like a Korean Care Bear fest…
That said, I think the problem here is the wrong rating in EU, in a nutshell it is a game based on combat, war and killing… Games with the same concept but less cartoonish graphics have 18+ ratings here so I really don’t understand this 12+.
@Video game only Kickstarter – I don’t really see much point in here, a few years back gamers and developers were struggling to get more attention to their entertainment platform, and now instead of showing everyone how much games are valued we want to do fund raising in a niche community-based project? I do understand there are differences between this and Kickstarter, but there I think Kickstarter allows all this anyway.
Don’t know if it’s a good or bad thing, but most of the time I can’t tell who is talking, except Paul. Thanks for wishing me luck. Also, everyone does their GCSEs at 15. A quick google search would have given you:
“The General Certificate of Secondary Education (GCSE) is an academic qualification awarded in a specified subject, generally taken in a number of subjects by students aged 14–16 in secondary education”
My country is normally behind the times, so I remember dial-up internet too. Anyway, I’m not going to comment on the news because I need to go study Physics and Geography for tomorrow.
To reinforce the point made by Paul on the last episode (VGRT – best podcast), VGRT was not the first podcast that I came across. I tried a whole bunch of them but non suited me. One was 2 hours long and they just went on about which chick will be topless next in True Blood and how they had fun playing COD. Another was aimed at the South American religious community. I stopped at VGRT because you deliver whats important to me: the news. Plus, reader feedback makes the podcast that much more involving.
@Wii U and profits
Won’t be buying it on day one. Not after the 3DS fiasco. Even now there are only 10 or so games that are worth buying here in Europe. I regret not buying a Japanese 3DS. At least that would give me an import option. I will wait untill the Wii U drops in price. Examine the game library. See if it’s worth buying (if it lives long enough).
@ Tera’s censorship
I generally dislike censorship. I don’t mind my games with sex, blood and other naughty themes. Good to hear that the issue got resolved. I might even play it if I live through my exams.
@Freemium games
I played quite a few freemium games in my time. Hell, I was there when the whole thing started to get popular. But I can see why people leave freemium gaming. Most games I played give a lot of advantage to the paying customer. Special skills. Fancy weapons. If you don’t pay, you will feel left out. However, by paying for a free game you are foced to commit to extracting your moneys worth out of it. And games like RPG can get very boring and tedious in the long run.
PS: Thank you for the Magicka code.
PPS: Paul is Ukranian? I’m Russian. But I live in UK. I suppose I am sort off like Paul but on the eastern hemisphere.
its been a while since I didn’t listen or commented on the podcast because of my minecraft server management but its good to see the podcast still up and running, keep it up guys ,i have no time to comment about the news though coz I’m in boracay