A good episode this time, if a little meandering. The episode is slowly reaching its milestone.
The news items for the week include:
Check us on twitter: Jonah Falcon is @jonahfalcon, Paul Nowak is @stagermonkey, and Scott Dirk is @alphashard.
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?
At E3 Reggie Fils-Aime let the world know he wasn’t satisfied with the sales progress of the Wii or DS in 2007 and hopes Nintendo can do better this year. Perhaps Nintendo is playing the humble card? No doubt they bragged about their 10 million sales of the Wii and 20 million sales of the DS but quickly followed it by saying they’re not satisfied.
Or, is this a threat?
Nintendo has built some steep competition while both Sony and Microsoft scoff at their product and tell everyone its a novelty and it doesn’t really “count” in this next-generation console battle. It doesn’t count… really?
Perhaps Microsoft and Sony are right; maybe every Wii owner that wanted a PlayStation 3 and/or an Xbox 360 purchased their console too. There may be some truth to that as hardcore gamers may purchase a Wii for many reasons:
It seems they don’t feel a threat because Wii is a non-gamer console and thus attracts a different crowd… yet they’re both mimicking some of the motion sensing in their own controllers and playing nice towards “casual games” and non-gamers of late. Maybe their not threatened, but impressed?
Fils-Aime isn’t impressed with their sales figures, perhaps because he expected a higher degree of Wii sales by now, but the fact that people cannot purchase them two years into production has hurt sales figures. Although 10 million units sold is an impressive figure, knowing you had such higher potential if the product was actually on the shelves has to hurt a bit of your pride.
The DS sales were impressive considering the product has been in the market for awhile and is easier to find (minus the holiday rush). We’re not sure why he’s not satisfied with the figures, but inspiring a higher degree of DS sales will require some work. Perhaps this is why they’ve gone with the GTA Chinatown approach; using the GTA name to grow their DS sales figures?
It will be interesting to see how Wii does through the next few quarters and if sales slow down now that we’re a few years into the product. What was the last home console Nintendo owned to get this high of a demand?
Perhaps none.
Part of this long episode was recorded live from the LA Convention Center floor at E3 2015, where Jonah and Paul were fresh off waiting in line for Disney amibos. There were some news items covered there, while a few more news items were recorded here.
Rather than list all of the news items, we’ll just relay the Question of the Week: “If Nintendo isn’t revealing a new console, should they skip E3 altogether in 2016?”
All this and listener feedback, too.
Diskless Nintendo, I think this might be a great idea… if they moved to memory cards they can reduce the system profile while increase performance and capacity (Larger Cards give access to larger games). I think it also makes sense to expand their digital library to support all the older/legacy games and have them accessible in the console… especially if the enable you to access the digital version if you have a physical copy. As for video game movies… I do not think I have enjoyed any movies that have been based on a video game. That being said, I have enjoyed some of the Anime shows/movies which have turned into games or were released after the games. Lastly I thought I would share that I also bought the Hero’s Humble bundle but haven’t had a chance to play any of them yet. I am going to install them on my Surface tablet and see if I can get them working with touch. Wish me luck.