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?
Xbox 360‘s been seeing success in Europe, but nothing compares to the success they’ve seen since the recent price cuts. Sales for the 360 are up 214% which is pushing them past the two-to-one sales ratio against the more expensive PlayStation 3.
While compiling a list of games to respond to a user question on the
Hi guys,been too long,ive changed career paths during and before that time.
SO the PS4 is out,what featuresdo you think will be more prominent.
make that PS4 PLANS
@Sony unveils PS4 at “See the Future”
Hey, Radeon and games DO go together. I’m using Radeon cards since 2004, and I didn’t run into any issues.
@Sony: Pre-owned game blockage “up to publishers” on PS4
Translation: we’re just going to give the publisher all the tools they need in order to block used games, so that you’ll not blame us.
Despite the fact that it’s our hardware, and we’re the guys developing those tools. Riiight …
@Fans express outrage at offline/LAN play for console version of Diablo III
Outrage? Why?
Sure, they did give PC gamers enough reasons to be upset, but outrage? I for once vote with my wallet.
@QOTW:
Heh, PlanetAVP.com, but of course.
Hey guys, long time first time 😉
@Sony unveils PS4 at “See the Future”: I really don’t understand why Paul is so upset about Sony not showing the actual console. They told us some details of the specs so what difference does it make how it looks like. Maybe it’s the PS fanboy in me speaking but I really enjoyed most the show, I like the idea of integration of the PS4 with the Vita (which I own and which is not dead as you like to say 😉 ), I like the idea of Gaikai being an integral part of the system, I like the share button, etc. The tech demos were mostly unimpressive, especially the Media Molecule Move thingy but the Quantic Dreams old man demo was amazing.
I agree that knowing the price levels of the new hardware would be nice but I understand that there are still some things to be solved on Sony part and it’s simply not reasonable to more or less guess the price at this moment.
@Sony: Pre-owned game blockage “up to publishers” on PS4: I also believe the idea of getting a re-activation code from Sony or the game publisher is a good one, if it comes to it that the games will be blocked, which I don’t think is a real threat for now. As you mentioned, the fact that people are not buying new games now doesn’t mean they will once the used game blocking is implemented. They will wait for price cuts and that’s all. It’s the same story with movie and music piracy and how much the companies are ‘losing’ due to it. They always assume that people would buy the original CD/DVD if it wasn’t available for download.
@Rumor: Microsoft revealing next-gen console in April: I wonder if we’ll see a larger difference between the XBOX720 and PS4 than in the current generation. Sony’s conference focused mainly on games while the additional content was only briefly mentioned. I don’t own an XBOX but my impression is that it puts more emphasis on that additional content (i.e. not games) and maybe the new iteration will move even more in that direction.
@QOTW:
I’m from Poland and the one magazine I’ve been subscribed to for several years has been CD Action. They always put full games on their CDs and later DVDs and the reviews and additional in-magazine materials were of high quality.
@Sony’s blind vision of future
Stayed up till 1am to watch most of the show. It was very developer centred. If you don’t get off at PC specs, it will be mostly irrelevant. PS4 has a few interesting ideas (share button) but like many others I see it as bringing up the PS to the speed of Xbox. As someone who had an Xbox 360 for 3 years before PS3, I found Sony’s console a step backwards. Crappy on-line, no integrated party system/chat and a cross-media bar which loads every time you access it. PS4 is effectively getting everything that Xbox 360 had in 2006. Overall, I have seen Sony’s future. And I am not tempted to be a part of it.
@New Xbox rumors
It would make sense for them to show it off in April. Sony jumped the gun to grab the spotlight before the E3. Now Microsoft has to make a move. I have high hopes for Xbox. So far the future generation looks a lot like yesterday. Fingers crossed Microsoft will impress us with it’s show. Otherwise, things are looking bleak for the console gaming.
@Fans express outrage at Diablo 3
Diablo 3 was out?
@Gamespy good bye
I tried to use it to play PC games on-line but it never worked for me. It became largely irrelevant when Steam appeared. Steam has it’s own integrated system which allows you to fail to play games on-line without exiting the game. Progress…
@QOTW
I started using Gamespot around 2005. Since I was poor, I would only buy games after ensuring they are good i.e reading reviews. Gamespot was a good source. Stopped me from making a lot of stupid mistakes. It is often unnecessarily harsh but I like it nevertheless. I still use it because it has a good mobile website and I can read it anywhere via 3G.
@Arthur – I wonder if the fact that you had an XBOX and I own a PS3 has something to do with the fact how we saw the conference 😉 I am excited about the specs because I don’t own a powerful PC and I’d rather had a high-end console that last 6-8-10 years than an ultra-high-end PC I need to upgrade every year or two.
I don’t know if you guys come here for post-show replies but if you do there are a couple of things I’d like to add.
@Jonah – Why do you assume that something WILL go wrong with the locking the disc to the console mechanism, if it comes, which I don’t think it will? Anyway, doing this would be like shooting yourself in the knee (with an arrow). If Sony does it and Microsoft doesn’t this is the worst think Sony could bring upon themselves. If they all do it it sounds like collusion. As far as I am concerned, I almost never buy used games and I don’t trade them in for new ones (call me sentimental… 😉 ) so I’m not that worried about all this, personally. Still, I think it’s a bad marketing direction if they are contemplating it.
@Paul – you replied that you had felt everything about the PS4 had been rushed and unprepared. I didn’t see it that way and I guess it’s just a matter of perspective. I’m 100% sure the console isn’t done yet but who cares about the hard drive size at this point? There will probably be different versions so why talk about it? Tweaking the hardware a little bit here, a little bit there is going to happen but we saw what the console can do and that’s the most important part, not the size of the drive, the number of USBs or what it comes bundled with. There will be variants and retailers will also come up with something.