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?
Hi guys.
Thanks for this (and the few last) episode(s). I was very busy the last weeks, so i was not able to write a comment. Sorry for that! You deserve listener feedback 🙂
Regarding Telltale: In my opinion this is very unfair to treat the employees like that. I am happy, that something like that is not possible in germany, we got special “insurance” for such a situation. But in addition it is sad, because i liked telltale and the games they made 🙁
To our neighbours in the swiss: this is such a stupid move, and i have read this as well. Your comment, that i dont want to fight for animal right by thrwoing kittys at an animal shelter perfectly describes how stupid this protest action was.
Regaridng the Tetris topic, i played a lot of Lumines and i love the game for it´s simplicity (like Tetris). Such games you are able to play for half an hour and dont have to remember any story or complicated moves. Most of the newer games, you need to know every button on the joypad, have hours of storytelling and complex storylines … i dont judge this, but these games are no games you are able to play for some minutes.
To the question of the week: As already mentioned in the episode, i would love to see another Back to the future Telltame game 🙂 I think i already mentioned it once, but i am a real BTTF fanatic (my right leg is completly tattooed with BTTF).
Last but not least: TJ, congratulations to your wedding! I wish you will have a beatiful marriage and will stay together forever!
Greetings from germany and have a nice week.
Ralf