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?
@Gamergate: Oh what a cluster-duck. Companies need to stay out of politics and people need to keep their personal lives out of the media and business world. Why are these people failing to learn these lessons? Not to mention the whole mob mentality of jumping on a bandwagon that they have no business getting involved in the first place. No wonder I’m an escapist. I had thought that the name Gamergate was a company until I read this story and not a continuation of the Watergate “meme”. I agree with Paul you shouldn’t add –gate to the end of every scandal. It makes it hard to differentiate from real things that have gate in it’s name like Brandenburg Gate or Golden Gate.
@Capcon: I know they are in the business to make money but I’ve always hated this mentality. The idea that if it doesn’t make 2 million it isn’t worth bothering with his a terrible thing, there have been games that did better over their life time then when they initially launched. Some games take time to build up their popularity and this need for them to be block buster sellers doesn’t guarantee quality. There are many AAA games that have sold millions and I have NO intention of ever buying or playing. This is the mentality that killed the original Sierra games and with them coming back I don’t want to go through all that again.
@Mario Clones: There was a similar joke in Sierra’s Leisure Suit Larry, where if your character died and you restarted they showed a cut scene of a new Larry being made and put back in place. So that’s an interesting game concept to imagine your characters going through.
@QotW: My favorite Saturday morning cartoon would have to be the Dungeons and Dragons. I loved Superfriends and Amazing Spider-man (who was teamed up with Iceman and Firesta). I had to use a site (http://www.inthe80s.com/saturdays.shtml and http://www.inthe90s.com/saturdays.shtml) to remember what cartoons were on Saturday morning as opposed to Weekday afternoon or morning. So I can’t seem to find when I watched Silverhawks, Thundercats or GI Joe, which I thought were in the morning. There are just so many to list but those that are very memoriable were Gummi Bears, Garfield, Kissyfur, and Smurfs. I have to agree with Jonah I do remember watching Smurfs mostly to get to whatever was after it and I didn’t stick to just one channel. It was a very warm and fuzzy nostalgic memory of a tradition that it is a shame has seemed to come to an end. I was like Jonah as well as after watching the cartoons I would be ready to go out and play.
The third Question of the week is that I play the Nintendo 3DS, I love all the RPG games and the old nostalgic games that I can play on it. I’m very into the Professor Layton games so that’s another one for Pawel.
GamersGate is the online store.
@EAs eternal struggle against its own credibility
When Battlefield 4 came out I was lucky enough to be at university and did not buy it at launch. I pre-ordered Battlefield 3 and spent the first day trying to get into a game, so I am glad I missed their second fiasco. DICE needs to stop rushing their games out the door. Especially considering that the Battlefield series have a terrible single player component which cannot compensate for lack of multiplayer (unlike Call of Duty).
@Thr Cute Terrors of Nintendo
According to the original Mario manual, Bowser turned all citizens of mushroom Kingdom into blocks. Basically, Mario rescues the princess as an accomplished mass murderer. In fact, Nintendo is full of creepy things which would make the Western audience cringe in fear. Dead Pokemon, Silent Hill-like Zelda dungeons and getting Zelda’s “Ultimate Reward” right in the dungeon she was kept in. Their early games are as good for kids as GTA.
@QOTW
The 3DS is still my favourite. I don’t play small iPhone games. I have KOTOR on the iPhone but it gets continuously interrupted by various notifications and calls, which makes me loose my progress.