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.
You know it: thanks as always for the episode 🙂
I played a lot of Diablo 4 the last weeks, but besides this i only watched some tv series and did not play that much (not even Magic!).
Handheld discussion: i really love the Switch and my new “console” the steam deck, because i love to have the possibility to take it on a trip or to play some smaller games while in bed or on the plane or stuff like that. If i will buy a possible pS5 handheld … cant say …. at the moment there are not enough games out for ps5 which interest me … i am still playing god of war (not the new one, the remastered HDR 4k version of the ps4!).
Jagges Alliance: never played any of these … dont hit me too hard for this 🙂
Hifi Rush: neither played this one … i think now i will be dismissed, right? 😉
Gamescon: you only mentioned it in one sentence, but i am looking forward if there will be some new interesting indie titles, because these are more interesting for me than most of the triple A titles. If one of you will visit the gamescon, just give me a hint, maybe we can have diner together or if you need a place to sleep.
Keep on the good work and stay healthy and happy!
Greetings from germany,
Ralf