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?
@Sony drops 3D support, saying customers rejected it
😀 really? How about their pricing, can we reject that as well? The main issue with 3D TV for for now is the lack of 3D content (ah, where’s the porn industry when you need it …). Add to that a pricey TV and you start asking yourself if it’s worth it.
My issue with 3D gaming is that in order to properly display it in 3D, you need to render the scene twice. Basically you need hardware that can do 120fps in plain 2D mode in order to have 60fps in 3D. Don’t know how many can afford buying such gear.
@Oddworld creator to EA: “F— you very much”
😀 I love this guy! As long as he has a good game, there will be somebody willing to distribute it.
@Wii U launch developer complains of lackluster CPU:
Oh my … this is definitely not good. They just aimed for a different ergonomics/usage type and forgot about the computing power …
This reminds me of a particular phone, where the manufacturer focused mostly on user experience, completely forgetting that the device is still a phone that uses radio waves to communicate 😛 *ahem* iPhone 4 *ahem*
@Mists of Pandaria sales below expectations according to analyst firm
Well, there’s that many times you can sell the same game again and again 😛
Kidding aside, Jonah does provide a very good explanation.
@Nintendo Power: it’s bound to happen, due to Internet alone; the more specialized magazine (more niche type of market) the faster the printed version will dead.
I’m with Jordan on this one. Jonah, I send links to my friends …
@favourite game of the 90’s:
Jonah, good point with Unreal Tournament, that game was (if you ask me) the bets of the series. Everything from music to weapons felt better than any of the sequels.
Now, the reason why I went for Quake 3 is (believe it or not) the bots. Play on nightmare any of the maps that has just one bot, and if the hair on the back of your neck stands up due to fear of being fragged, then you might understand. UT was fun, but could not do THAT.