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?
@Name pronunciation butchering – Actually, Jonah is pronouncing my name right, Paul. It’s a flat ‘d’ with the accent on the first syllable 😉
@Machinarium – been there, done that. I just forgot to mention it in my last comment. It’s a great game and I really enjoyed it but it’s still not Broken Sword…
@XBOX unveiling & DVR functionality – I will most likely own only one next-gen console and it will be the PS4. I don’t want to lose my trophy progress and I am a PSPlus subscriber so Sony got me. It will be interesting to see, however, if the PS4 and the next XBOX will differ fundamentally in what they offer. From what I see Sony is really focusing more on the gaming side of things and I’m all for that. Microsoft seems to want the XBOX to be the only box you need near your TV so get rid of your cable set-top box, your TiVo and whatnot. I’ll be interested to hear what they have to say on May 21st.
@Jonah’s Anti-Playstation propaganda 😉 – You are for sure more in the know as far as the game developer industry is concerned but is Sony really lying about the progress they’ve made with the developers with the new Playstation and the developer-friendly approach they say they have? Even with the awkward PS3 architecture there weren’t many XBOX exclusive titles and most of the PS3 versions of games were as good as the XBOX/PC ones (*cough* Skyrim *cough*). The launch or close-to-launch list of games Sony showed looks impressive and the list of 3rd party devs they got support from is also something that makes me wait with excitement and anticipation for the end of the year. Granted, I will not get the hardware day 1 as there’s still a backlog of PS3 games for me but I hope to get the 2nd iteration of the PS4 hardware and be happy with it.
@Leisure Suit Larry – well doesn’t this fit right into the adventure-game void I’ve mentioned before? I haven’t really played the first LSL game so this is something I’m really looking forward to. I hope it has close to none hardware requirements and will run on my laptop. I’m not investing in a gaming rig just to play a 2D adventure game.
@Nintendo strategy – There is no discussion that the majority of the games nowadays are much easier and streamlined than what we saw some 20 years ago. Do you remember Super Mario Bros. : The Lost Levels? The game that was initially released only in Japan because it was thought to be too hard for us Westerners? I played it on an emulator some years ago and I don’t think I would have beaten it without the save/load options on real hardware.
I haven’t played any of the latest Mario or Zelda games myself but from what I’ve heard and seen in gameplay youtube videos, the freedom of the player and the difficulty level have increased a lot since the (S)NES games I had played years ago. I guess it wouldn’t be a bad idea for Nintendo to focus on younger players who should not be playing Mass Effects or CoDs but that doesn’t mean that the games should play themselves. Kids have short enough attention span as it is without the games having to reinforce it. Force them to play the same level or platforming stage over and over again rather than show 10 minutes of cutscenes every 2 minutes of gamplay. When they finally succeed after two hours they will feel that they accomplished something difficult and that feeling is most rewarding.
@’Buy a Wii U’ – The Vita is enough for now, thanks. On top of that, I haven’t really seen Wii Us (how do you even spell that?) in the Best Buys of Poland. Not that I’ve been looking hard but PS3s and XBOXes are everywhere and can’t be missed. The Nintendo consoles? Not so much.
For the sake of Paul’s vocal chords this 28-year-old ‘kid’ will try to limit the length of his comments… maybe next time… 😉
@Rumour: Next Gen Xbox may actually play video games
Including DVR sounds like an interesting idea. The ability to record snippets of gameplay and share it with your friends could make for some good times. On the other hand, from personal experience, that feature only works in Halo games. Recording TV sounds like a good idea too. If only Microsoft could improve the quality of contemporary television that would be great. Recording crap programmes still makes for a crap experience.
@Leisure Suit Larry
I played Magna Cum Laude on the PC. Made the mistake of removing censorship. Seeing Larry’s 3 inch weiner was a traumatising experience. Not so interested in this remake. The whole idea of a horny video game is lost on me since I am an anime fan. I am conditioned to softcore pornography so this game will be like a pointless point and click adventure.
@Wii U!!!??? Where are U???!!!
I don’t have a problem with Nintendo bowing out of E3. The problem is that this decision sends a bad message that Nintendo has simply nothing to show. This won’t help Nintendo to shift those console units. I understand that E3 is a media event aimed at investors and journalists. But to a gamer E3 is an important event about celebrating the upcoming releases. It’s like gaming New Year. The fact that it will be a 1/3rd to short will make for a disappointing event.
@QOTW
What was your Golden Age of gaming? For me it was the later years of the sixth generation and the first few years of the DS. Back then I used to care and anticipate new game releases. Each game somehow felt fresh and new. Nowadays they all seem the same. After I got over the whole console online multiplayer thing it kind of went downhill for me. Apart from occasional Skyrim, nothing else lights my fire anymore.