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?
I wrote a comment to this podcast instead of playing GTA 5. I should probably get the VGRT reader’s award or something.
@EA CEO
I am in the camp who hates EA by default. I still bear a grudge for them ruining Oddworld: Stranger’s Wrath and Marvel Nemesis. It will never change regardless of who runs it. But I do enjoy Battlefield and am looking forward to Battlefront so I am glad that some guy got replaced by another guy and I hope he will take the company in a bold new direction out of the shit pit it’s in.
@Sega buys Atlus
Never heard of Atlus. But I don’t expect Sega to get back in the console race. At the moment the competition is cutthroat in the market. Even an established brand like Nintendo can’t survive. Maybe Sega wants to expand it’s TV add on business. They release little boxes that have bunch of classic Sega games and are plugged into your TV. Either that or they want more MMOs.
@To mediocricity and below
Star Trek had a reboot and I didn’t even notice. I always thought Star Trek needed a reboot. It’s a very long running franchise. But I would prefer a condensed contemporary version of the original series. Not a movie where there is more shooting then actual trecking.
@Your daddie’s credit card can no longer beat Diablo
Just recently I started playing the second Diablo with a friend. I love it. Fast paced combat. Many locations. And loadsa loot. I also played the Xbox 360 demo and it was good. But not as good as 2. Combat was way to slow. On the account of auction house, I completely do not care if it is there or not. I am the type who can spend hours grinding monsters to get a good item (Monster Hunter eats my life)
@QOTW
I will answer last weeks question if it’s all the same. I live by the Russian rule of: “if it ain’t broke -don’t fix it”. I got a DSi because my original DS was falling apart. My Xbox 360 crashes evey 2 hours but I won’t get a new one as I don’t tend to play the same game for more than 2 hours anyway. I only get new hardware if i don’t already have it.
First I wanted to wish Jordan a speedy recovery from his hospital stay, I hope it wasn’t too serious.
It was nice to hear Dan on the show again!
@EA Change: Just googling to see the long history of game series ruined they have built a reputation that may be irreparable at this point. I know I’ll be getting Sims 4 for my wife and this change I hope does bring better games. The reputation is however a well earned one.
@Diablo Auction house: I think the more games that abandon the Pay to Win mechanic the better for quality games.
I’d like to end this with a question to you guys. I’m trying to figure out what is the best console for a family to play on and so far that does seem to be the Nintendo franchise. Xbox and PS seem very heavily focused on FPS and other 3D games. My wife get’s motion sickness from 3d gaming and can only play side scrollers and the like. Also I heard you saying how split screen is dead so I’m wondering what do you do when you have people that want to play the same game on the same console at the same tv?