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?
A new draft of the R18+ classification has been
@John Riccitiello steps down as CEO of Electronic Arts
Hmm, no connection to Sim City? Me thinks not. Good point about EA no longer growing. Thing is, there is that much you can grow when all you have in mind is growing. Focus on the games, not on the slide shows for the board meetings.
I agree with Jordan though, the people guilty for releasing unfinished games is the customers. Greedy EA understands signals like “I’m not giving you my moneyz”.
@Will fans back an Alice 3 Kickstarter, asks American McGee
Some folks enjoyed the game (not my cup of tea though, but I’m irrelevant), so I don’t think he’ll have any issues with raising the money.
The problem is the IP. No amount of money he’ll raise from Kickstarter will get him the IP back. He’d better start working on something else. Keep the mad girl protagonist, keep the wacky universe. Ditch the names.
@Team Meat sitting out on developing for next-gen consoles
I agree with Jonah, the barrier of entry should be close to nil, even for the sake of diversity. But hey, I guess Ouya will just have a new developer shipping games for them …
Though I wasn’t available to fill in for Paul on this episode as Jonah noted, I’m indeed excited for Brave New World nonetheless. You can be certain it is to be front and centre for discussion on the next episode of PolyCast, the Civilization series podcast that I lead and produce.