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?
@gaming flashback
I don’t tend to associate UK with good game development (due to the life choking taxes), but Bolo sounds like a clever and complex action-strategy game. Almost makes me wish I was born 20 years earlier to play it (almost, being old sucks). To be honest, I feel like there are no good online games anymore and most that are released are just regurgitations of earlier success. I am hoping next gen will bring a breath of fresh air to the competitive online world.
@Rats leaving the sinking ship
I played a few demos of PGA tour but never liked them. The concept of hitting a ball with a club across the same field of green is probably the most pathetic attempt at recreation mankind has ever devised. It should be renaimed PGAL (Please Get A Life).
@First official COD free for all tournament
Whenever I hear news like this it makes me think that everyone in the Activision management offices evacuated the building and left a duck in charge. Where they beta testing Black Friday or something?
@QOTW
What’s your favourite soundtrack? With the atrocious state that the contemporary music industry is in, I tend to turn more and more towards the anime and gaming tunes. My favourite is the opening march of Morrowind and my favourite song has to be Still Alive (both from Mirror’s Edge and Portal). Other notable tracks are Utada Hikaru’s Kingdom Hearts ending (both Japanese and English), Guitaroo Man soundtracks, FFX and too many others to mention. Gaming has some good tunes. What’s yours?