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?
Believe this, Nintendo and their Wii console takes another month as top seller. The only product that moves more hardware than the Wii is the DS. As a gamer, it’s hard to understand how the Wii product continues to sell like this with the least supported game library on the planet.
@Aussie Diablo III preorders not getting refunded from GAME
This sucks major balls. Aussies already get the short end of the stick, due to significantly higher prices. I pity them, they deserve better.
@Dark Souls multiplayer
I think that another game that uses a similar concept is TrackMania Nations. Granted, in TMN you only see the ghost of the other players, they don’t affect the game too much.
@QOTW:
Hmm, I don’t really play free-to-play games. I did play a free game (“Red Alert: A Path Beyond”) though.
Good news, Herr: Blizzard is accepting those preorder refunds from GAME. Just send them your receipt, and you can purchase it from Blizzard minus the deposit.
Hi Jonah, Jordan, Paul and Dan;
I love the show and really enjoy listening to your buys perspective on the gaming industry.
I was wondering if you guys could discuss the recent announcement for an Enhanced Edition of Baldur’s Gate I & II and their plans to make Baldur’s Gate III.
Do you think they will actually make this worth buying since you can get both of the Original games gog.com rather cheaply. I’m sure these Enhanced Editions will be around $60. I can’t help but want to keep my expectations low on this even though I do love the BG series.
Some awkward silence there… I think Dan was a bit tired during recording.
@QOTW: I would say hands down Team Fortress 2, it is just so fun. I have clocked in 265 hours and the only reason I have stopped playing it is because I know every nook and cranny in it. It also gets kind of boring when you’re constantly at the top of the leaderboard :P.
I have recently started play the MOBA Super Monday Night Combat. It’s great, I’ve played 78 hours of it, but it only has 1 mode and 3 maps as of yet. There isn’t much else to do but master the different classes. I think it also made me hate MOBA games just because there is rarely a team environment. Everyone gets pissy whenever their team loses, and blame it on their teammates even if they were the worst player. I don’t know, in TF2 I always had that feeling of being in a huge team cooperating, and if you died it was your fault.
I would also like to note that I have never spent a penny on free-to-play games.
@PlayAlterEgo: I got kidnapped and killed on my way to school…