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?
The month, June 2008, Metal Gear Solid 4 takes number one on the NDP figures with 774,600 individual units (over 1-million if you include bundles), in July… they didn’t even make the top ten figure. What the heck?
Hey guys,
I just finished reading ‘Racing the Beam’, a semi-technical, semi-historical book on the Atari VCS and I’m currently reading ‘The Ultimate History of Video Games’ so your Gaming History segment was timed perfectly. I never had the Atari VCS but I did have the Atari 800XL machine and I did play most of the classic games. It’s certainly one of the most important companies in the history of video gaming and it’s a really fun and interesting story to read and listen about.
@Kinect
I never used the Kinect but the PS4 also has the voice command support and I never use it. I feel silly talking to a machine when I know I can do most of the stuff faster and easier with the controller. I am not suprised that the Kinect has been unbundled from the XBone. Those who think they spent too much money will just as easily sell their Kinects to those who want them. I don’t think it’s an issue. Overall, it seems to me that motion controls are vastly underused but there’s probably a reason for it. Other than party games I don’t really find them that fun. Having said that, I played through Heavy Rain using the PS Move and it wasn’t all that bad. Still, it’s a unique game, which attempts to be as immersive as possible.
@Philips versus Nintendo
This is so bizarre I don’t even know where to start… Why the Wii U and not the Move or the Kinect, which seem to infringe on the patent even more? Does it have to do with the scanner you talked about or the nunchucks because that’s still not clear to me? Didn’t Philips sue Nintendo over a different patent many years ago? Something about CD-i?
@QOTW
I don’t believe I played that many educational games back in the day. I remember a math game featuring Disney characters and butterfly nets but I don’t even remember what platform that was on. Atari or Commodore… Need For Speed didn’t teach me how to drive, Killzone didn’t teach me how to kill and Spelunky didn’t teach me about exploring caves. I prefer games for their entertainment value although I will have to look into the education genres when I have my own kids…