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 TD Gaming Podcast and Videogame Roundtable merge, as Jonah Falcon introduces VGRT regular Jordan Lund to his new listeners, as the VGRT Gaming Podcast is born.
Jonah, you can simply skip the iOS and Facebook games 🙂
@NGP to be called the PlayStation Vita: … I liked more the NGP … Now I could be biased, I never saw the ad you guys mentioned.
@PS4 in development .. oops, no it’s not: Now, if we ignore the PSN security issues, I would consider this kind of inconsistencies funny. Now, what if they’d do the same with PSN? I can imagine the dialog:
Q: Is PSN secure?
A1: PSN is air tight secure.
(a few weeks later)
A2: PSN is not that secure.
@Dungeon Empires out of beta: I see this becoming a pretty big game. It blends some sort of ‘Farmville’ and WoW. It’s … nice!
@Dead or Alive 3DS = child porn?
Besides the age of the characters, proper rating would make this easily avoided.
@Call of Duty: Elite announced: good point, Jonah. They didn’t handle the information properly, and that can turn against them, with or without a real reason.
Jordan, the game you mentioned, ‘Eternal Darkness’, I am following a ‘Lets play’ for it.
@QOTW: none, unfortunately. Well, maybe Rage. While id’s games are not the most cinematic ones, I have to admit I liked most of what they released.
I have not listened to this episode yet, but I’m sure it will be good. I’m glad to see that you are keeping it going. Listening to the show since last November and I’m happy that its not going to die.
Hey fellas, glad to see the TD Gaming Podcast is still alive! I’ve been a fan since episode #118. Just a heads-up – the Schommers used to use a program called “Levelator” to even out their audio. I don’t know if you guys do as well, but if not it might help your output.
http://en.wikipedia.org/wiki/Levelator
I’m keeping the Schommer family in my prayers and wishing you all the best as I continue listening faithfully 🙂
Just listened to the podcast, really enjoyed it, but thats what I expected.
About the “Vita”, I’ve been hearing complaints about the naming , but it seems like no matter what they name it, people are still going to complain.
PS4 – I’m glad that they aren’t working on a new console, they need to work on getting the PS3 back to where it was before all the hacking, but again, it seems like no matter what Sony does, people will still complain. They just can’t win.
Bungie – I can’t wait to see this game. Bungie has really only been known for Halo, and I’m very curious to see what they are going to be able to follow it up with. This game will really show what Bungie can do now that they aren’t tied down to one franchise. Also, saw the trailer for Halo 4, seems unnecessary, I thought the trilogy was fine, but 343 seems capable of making a solid Halo without the help of Bungie.
Call of Duty Elite – I am one of the many that watch Call of Duty commentaries on Youtube, and it was clear to see that the majority weren’t happy about the announcement that you will have to pay. That was before it was announced that you would get most features free. Patience certainly isn’t too common in this community. It sucks that that was the way it had to be revealed.
QOTW – I am really excited for Bioshock: Infinite. Have been waiting to see more on it since the first trailer came out. I love this series and to see that they are taking it to the sky makes it seem like the series is being reborn.
@Will, PS4 issue:
It’s more complicated, the ugly way I’m afraid.
The issue with PS3 is that (1) the root key, the one that validates if the DVD is legal or not, was ‘coded’ in the silicon chip, and (2) that key was discovered.
This means that anyone can build custom software (or pirate games) and ‘stamp’ them as legal.
One way to ‘fix’ this is to change the key.
This means that future PS3 have encoded in them the new key, and all games that follow will also use that key. The issue is that the new PS3s won’t be able to play the older PS3 games (different keys), and that the old PS3s cannot play the new games.
The PS3’s root key issue was using a sloppy “security by obscurity” strategy.
The PSN case is strikingly similar: once the hackers discovered the what (old) version of software PSN used, they could then use a list of known security exploits for them.
If you’re wondering where the podcast is, it’s coming soon. We will be adopting a regular schedule once things settle down post-E3.