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?
Like a washed up superstar, Grand Theft Auto IV continues to drop in NPD figures. This
@No PSN unless you waive lawsuit
On the behalf of the PC community, we welcome all PS3 players to join us :P. Or play SP games only, assuming that the SP games don’t require a PSN connection.
My guess is: the network is not safe, and they [Sony] don’t plan to fix it any time soon, so they don’t plan to play nice. Something evil this way comes, at least for PSN customers.
Jonah, pipe down 🙂 …
@DC Universe Online goes free-to-play
Peer-to-peer MMOs + free-to-play may be the only way for small devs to start off an MMO.
As for free-to-play as the single business model in the futire, dunno. If the game is stunning, people will pay.
@Microsoft: Xbox TV this Fall
So basically competition to Netflix and Hulu. The more the merrier, if you ask me.
@Rogers Cable ordered to stop throttling gamers
Throttling is cheaper than replacing lines with ones of a higher capacity. I find it weird though that a third party entity orders a cable company how to do their business. It should be the customers, voting with their wallets that do that.
@Nintendo and Valve say no to smartphone games
Dunno about your explanation Jonah. Valve didn’t mind doing games for PS3, Mac and it is now pushing Steam for XBox 360.
One thing that I keep ‘feeling’ about Valve is that they’re understaffed: between making games and improving Steam, they might actually lack the resources to move to that market.
Oh Paul … everybody dies at one point or another, and we have little control over it.
@QOTW:
Well, the very first one I played is WWF: Royal Rumble, on the Sega Genesis.
Hi, fairly new listener here. I came across you while searching for a decent podcast about games, but couldn’t find one that I actually liked. I finally found your podcast, which is very enjoyable, especially because of the chemistry going on, you work well together.
@DC Universe going free-to-play: I think that all these MMOs going f2p is a good sign because it shows companies that they could make more profit if they stop trying to get loads of money upfront and instead gain the loyalty of their customers.
@Nintendo and Valve saying no to smartphone games: For both their businesses, I think it’s best that they want to focus on products for their platforms only. I remember Nintendo once saying that they don’t consider smartphone games to be “true” games, and I don’t think they will contradict themselves too soon.
Oh and to Paul: I know where you’re coming from with all this want of hate-mail. I have this “problem” myself too. It’s just a need you have after being so nice to people and receiving only praise. I haven’t yet received any hate, even after having asked for it, and so I won’t give you that satisfaction either.
No PSN for you! – Congrats on breaking the story guys, too bad you didn’t get the recognition you deserve, but us listeners know the truth, if that means anything at all. I am glad that this was actually pointed out, and its so hard to believe that a big company like Sony cares more for their wallets than their customers. GASP
Qwikster – It seems like a reasonable decision, people wanted games, and that’s what they are giving. The only thing that I could see being a problem is the price. I know GameFly charges 23 dollars a month which is too much for me, but if Qwikster can do the same thing GameFly does but cheaper, I will definitely be utilizing this feature.
Xbox TV – It seems that the Xbox is going to be an all around entertainment system rather than a gaming platform. They just keep on adding features to it, and if they had one the HDDVD vs. Blu-Ray wars, they PS3 would be dead. For only 200 dollars you can get one, and then you can pick and choose what features you want to pay for. Microsoft has handled this console well, even when your console fails, they fix it and send it back with a 1 Month Gold Subscription, they are doing everything right in my eyes.
No Smartphone Games from Nintendo – I think that the main reason that they aren’t doing this is that they don’t want to be giving anything to their competitors. It has been said many times that the DS’s main competitor is the iPhone, and if Nintendo were to give content to them, they would be taking money out of their own pockets. In my opinion, it was a good decision to stay away from smartphones, in Nintendo’s case.
QOTW – The first game I can remember playing would be Doom. Their is also the N64 games, but Doom seems to be pretty prevalent in my mind when it comes to the first. I can still map out the first chapter’s levels in my mind.
Super question, but I don`t think that I remember…
QOTW – My vanilla answer to this question is Super Mario Brothers for the NES on my 4th Birthday. I kept running full speed ahead on level 1-2 hoping to beat the koopa troopa to the low hanging formation of blocks only to run right into him every time. It took the older neighbor to teach me how to actually play video games before I learned my lesson. Alas, I’ve retained this bullhead, brute-force strategy to gaming to this day. I suck at video games unfortunately.