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?
In 1995 Ensemble Studios formed as an independent studio and kicked out a little game franchise known as Age of Empires. The title has received many accolades from the first in the franchise extended out to all the Age of Empires releases and spin-offs, all-in-all selling millions of copies.
@Super Pitfall
Erm, the youtube video didn’t look THAT bad …
@“Super-slim” PS3 will be a no-show at Gamescom
Meh … not a console user, don’t plan to buy one, not a PS3 at least.
@UbiSoft claims lack of new consoles penalizes creativity
… again with the lack of new consoles? Enough with blaming the hardware manufacturers for the bad choices developers/publishers make. The producers/developers are not being held at gunpoint to release only Call of Duty, it is their damned choice >:(.
Not talking about indies? Why not? How come their creativity isn’t penalized? Or is it that they simply take the plunge?
Rage tanked, yes. Still, kudos to id for at least trying, even if they only got themselves a new game engine.
@Diablo III ‘God mode’ exploit for Wizard discovered
I’m just going to stay away from Blizzard, until they get their act together. Always online DRM, single player game on an MMO platform, really? Really?!
@EA: Nintendo “on track to become primarily a software company”
Yep, always funny reading comments of one company rep. setting a road map for another company …
No question of the week from me.
Gez I think that Blizzard needs to get their act together. They had problems during the beta that weren’t dealt with. But maybe it’s a marketing scam? draw attention to the company just before they are set to release a new WOW expansion?
@Super-slim PS3
Never cared how slim my console is. It’s not a PC. It will run the same games at the same rate as a fat console. Regarding PS3 sitting on the shelves, that’s to be expected. Out of all the consoles currently available (at least in UK) PS3 is still the priciest. Since there is a lack of exclusives nowadays, there is not much difference between PS3 and Xbox 360. Xbox is just cheaper and has Kinect.
@Ubisoft and penalised creativity
I am sick and tired of hearing this argument. We know this console generation overstayed it’s welcome. Why does Ubisoft have to state the obvious that has been stated many times before? Do they want us to storm Microsoft headquarters and demand a new Xbox? Do they think there will be a new Xbox if they tell everyone how bad the industry is feeling? Ubisfot. Sit down. Shut up. Bake Assassin’s Creed 3.
Diablo III “God mode”
You will be surprised at how many glitches/ exploits can pop up in well tested games. Cast yourselves back to the Modern Warfare 2 Javelin glitch. It was discovered a few years after the game was played by millions of people for trillions of hours.
@Nintendo going software only
This argument splits me down the middle. EA has a point. I own a 3DS. I am regretting it. I could have spent my money on more worthwhile things. Like illegal drugs, alcohol and prostitutes. And the WiiU looks dead in the water already. So close to launch and still no price. Most announced titles are games you can play on the Xbox NOW. I hope that Nintendo will pull itself together. But they are led by Japanese old men who seem to live by bushido code and would rather kill their company then give up their franchise to business.
This is all I have this week.
@QOTW: When was the first time that you really got into video games?