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?
Hi guys great episode!
I found Infamous to be a pretty easy game, if they make the third even more so just seems sad. Not a lot of games seem to be as difficult as the old 8-bit games. I do like the paper trail feature Jordan talked about and I know Rockstar has a similar thing though not quite as cool as unlocking more missions through using the website, you can still track your progress of various games on the site.
Hearing Paul spending 200 on in game purchases on a FB game just makes me sad. I know it’s his choice on how to spend his money but a lot of FB games really seem to encourage you to spend real money to get fake in game money just to speed things up and make the game enjoyable. The Foxtrot comic Jonah brought up is a good example of why I don’t like those games. I feel like it’s lazy game making and undeserving of my money. I know they got to make money to pay their bills but I don’t like what they are selling. I guess though if there is a demand for these type of games who am I to judge? I’ll stop beating the dead horse now.
@Occulus bought by FB: When I first heard the news I was like “Why?” I wasn’t the only one scratching my head at this. I really didn’t want to think of Virtual Farmville. I do like the idea though of remote classroom, though I know we already have video chat for that sort of thing. Is anyone going to really want to wear this thing on their head? It’s like a fancier virtual boy.
QOTW: I subscribe to Gameinformer, which can be read online now. It does seem like it’s less and less necessary now though given how easy it is to hear about gaming news.