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?
Hey guys,
I haven’t written in for a while because you failed to speak bad of Vita all these weeks 🙂 the moment I heard Jonah flip flop on what media devices the Vita uses I knew I had to straighten it out (too bad about Jordan). Oh, there’s also work but I guess that’s a minor thing 🙂
The Vita uses cards and is still a great platforms with many great games. I just got the platinum trophy in Velocity 2X, which is just an amazing shoot’em up/platformer game. I wonder if it could break your dislike of the device…
I also haven’t been writing in because I didn’t feel I had much to add on the subject of the recent news items. However, the Windows 10 news is quite interesting. The reason they gave for skipping a number is great. Way to go with consistent naming, Microsoft! I’ve been using Windows since Win95 and they pretty much stick to the pattern of having every second system be terrible, as if they had two dev teams and one of them had no idea what they were doing. I bought a Win8.1 laptop recently (no touch) and I found it very hard to navigate through my apps. The Metro design sucks for mouse-operated devices and it’s not that intuitive for touch either.
Let me end with a little ‘about me’ section so that maybe Paul remembers me next time. We share the first name, after all 🙂 I’m 29, fonished college years ago and I’m trying to do a PhD in electronics/computer science. I also work for a startup which will one day be sold for… ONE MILLION DOLLARS (puts pinky in mouth).
Coming back to tje topic of Vita, my question to you guys. Which handhelds have you owned / do you own and enjoy a lot? Explain why 3DS is better than the Vita without using the words or phrases Link, Zelda, ‘the legend of’, ocarina 🙂
Cheers,
Pawel