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?
Again, please skip me from the contest, I don’t have the spare time to finish games I’ve started on Christmas, never mind starting new ones.
… at some point two guys decided to play a prank on their boss (1st of April). They photoshop-ed a picture of one of them to make him look like a mobster – car boot full of guns, that sort of sh!t – then the other one ‘leaked’ the photos to their boss.
Both of them got fired. Something to think about, Paul …
@Cruel April Fool’s Joke posts fake Half-Life 2: Episode Three Steam page
Oh yeah … this is among the cruelest ones. Jonah, a lot of people fear that Valve remained just an online store. On the other hand, they did release Portal 2 after Steam got big. On the other hand, both Portal, DOTA and TF are game/game mechanics that were developed by outside teams, then bought by Valve.
@Path of Exile to feature yearly major expansions
Paul, sorry, I had no idea what you were talking about – Jonah was right.
@Former Diablo III director states the auction houses were a mistake
The problem with former developers is that they can be labeled as disgruntled employees. He is actually right about the fact that Blizzard enjoys the cut.
@EA prez Gibeau: “DRM is a failed dead-end strategy”
Re he heeealy? Diablo III, Starcraft II both use MMO-like techniques in otherwise valid single player games, but apparently not for the massive multiplayer experience.
And now, having these previous examples in mind, I’m expected to believe that you aimed for an MMO to begin with?
Nice podcast guys! I remember one of my friends set his co-worker’s startup sound on his computer to a clip of around 5 minutes of silence, and then random beeps for about 5 more minutes after that. It really drove him (the co-worker) crazy because he didn’t know where the sound was coming from!
@Half-life 2 Episode 3: Yeah that really was a cruel one. Imagine if they actually did release “Episode 3” when October comes along! I would like to see how people react if that actually were to happen.
@Diablo 3 auction houses: It really was a big mistake by Blizzard, and it will be interesting to see how they will try to increase sales along with the Playstation release.
I look forward to future podcasts and I hope I can win that copy of HotS! Thank you guys for doing this.
@Half-Life Episode 3
Man, what a cruel joke. It’s like playing Duke Nukem Forever after waiting for 12 years. As a side note, the best April’s fool I remember was an advert for a personal domestic mini nuclear reactor that would solve all your energy problems for the next 50 thousand years. All the power of Chernobyl in your bedroom.
@Fifa’s Creed 2013
No they don’t want an Assassin’s Creed every year. Shut up, Ubisoft. You know nothing. People don’t want a yearly update of a game unless it has two dozen fit sweating men in boxers kicking balls on a grass field.
@Diablo 3 is already out?
Action House hurt Diablo 3. As opposed to DRM which made everyone happy…I would never use the auction houses because paying real money for digital code that may or may not have been obtained illegally is not what I want. And from what I hear, if you don’t use the auction house you will be put at a disadvantage. Maybe I will play the console version at some point.
@EA’s public image smells a lot like DooDoo
If he would spit any more bullshit, EA could start selling it to farmers and open up an agriculture business. Trying to cover your own ass at the expense of hard working employees. Capitalism at it’s finest.
@Topical Burn: Starcraft 2:Heart of the swarm
If you never played Starcraft 2, now is the best time to start. You won’t get much competition online since the Koreans are too busy pointing nukes at eachother…
@Half-Life 3
Don’t we get the same joke every year on April Fool’s with that game? It’s not easy to admit but my really conscious first contact with the game was the Black Mesa game that came out some time ago on Steam. I really enjoyed it but I don’t think that’s enough to make me go back to the original games with all the recent games still waiting to be played.
@Assassin’s Creed
Arthur made a great point about FIFA and other sports games, as a matter of fact. EA Sports don’t really change much in those games between the editions and people still buy them. The most obvious example of crappping on your customers is the PS Vita edition of FIFA which this year was a glorified roster update. I’m afraid AC will become something similar. A couple of new missions here and there but nothing new and exciting. New IPs, please. There’s demand for that.
@Starcraft and Koreans @Arthur V
With all the training they had since the first Starcraft came out, I doubt North Korea stands a chance…
Oh, by the way. Thanks Paul, for sticking up for me last week 😉 I assume next time there is a region-free giveaway I’m first in line 😉
@Diablo 3
The auction house is indeed hurting the game, due to the fact that people can flip it, which is crashing the market. Along with that, botters are putting MASSIVE amounts of gold on the market, causing items to become extremely overpriced. And Blizzard doesn’t care due to the fact that they are receiving a $1 cut from each sale.