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?
A great nostalgic episode, I do enjoy gaming flashbacks, keep them coming.
@Nintendo Game boy emulation: I do hope this means they will port more of their games to other platforms. I do remember the Bleem! Emulator for Sony games but that ended up getting sued for it. As for Nintendo I can only hope this will lead to more access of their games legally.
While we are on the subject of Nintendo I was thinking we could really have explored more of the Greco-roman games, not just Kid Icarus but also Battle of Olympus another side scrolling game from NES days. They seem afraid to try to push new IP’s and just stick with their tried and true ones. Which I think tends to make them feel stale. When Paul was discussing the end of the Zelda Cartoon and how Link and Zelda had to team up to find her father, I thought ‘Well that would have been a fine game right there!’
@EA: I guess they can’t be all that bad if they really are equal treatment. They HAVE had a long history of games with LGBT relationship options. I remember in Sims 2 there were apparently hidden stats you had to use an external program to see. One of these stats was a persons attractions tendencies, a score both for male and female, which ever ranked higher the character tended toward. I just thought it was neat that they went to this extent to make a character unique and even a little beyond your control.
@Sony Settles: I do remember those ads and I was tempted by them. Boy would I have been PISSED to find I would have to buy the game TWICE. I thought the whole point was that any game bought on the main PS3 could be transferred and played on the vita.
QotW: I started my shopping in November, but not on black friday or cyber monday.
First I want to apologize for not commenting much, but I tend to be too shy to comment much (and I didn’t get your podcast because I have been with my family doing a vacation-type thing for a few weeks). I feel like your commentaries on this, though have garnered my responses.
About Nintendo:I feel like they are trying to make a bit of a fuss over something that was not a very big fuss in the first place.
About EA: I have a number of friends that work for EA here in Orlando (mostly they worked on Tiger Woods games back in the day and now work with Madden games). I love that ya’ll commented on this and brought it to light to your followers. I really like that they truly care about their employees. I think you missed the nail when you say that you think Bioware was inclusive before EA was invloved.
On Sony Settling: Those ads were quite frustrating to understand as a consumer and, luckily, I was not willing to buy their pitch. Deutsch was quite poorly represented before they even posted those twitter comments. Barring them from repeating the exact point – I feel – doesn’t exactly prevent them from doing the same thing again: something I feel like they may do in order to make more money. You really do nail it when you say they only “got caught.”
On a side note: I think Jonah is incredibly insightful in general.