Sony president Kazuo Hirai, who took over the role recently, has admitted that the company has tough times ahead, thanks to "one issue after another."
Hirai was named the new Sony president and CEO earlier this week, having taken over the role from former president Sir Howard Stringer. He was instrumental in the early marketing success of Sony's then-new PlayStation video game brand in the mid-1990s.
However, in an interview with The Wall Street Journal, Hirai said, "I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not. It's one issue after another. I feel like 'Holy shit, now what?'"
With Sony's stock at a low, plus third quarter declines in revenue and a swing to losses year-over-year, Hirai also noted that he needs to make some tough decisions about the future of the company.
"We really need to buckle down and be realistic," he explained. "I don't think everybody [working at the company] is on board, but I think people are coming around to the idea that if we don't turn this around, we could be sitting in some serious trouble."
He added, "We can't just continue to be a great purveyor of hardware products, even though some people expect us to do that."
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Not exactly sure, how this is meant, does he say, he managed to turn the PlayStation business around after the entertainment division reported a $1.13 billion for the last quarter?
Seriously.
Shift business to Android, or just make software for MS & Nintendo hardware (MS at home, Nintendo for portable).
I don't see Sony just doing software though, so perhaps either focusing on Android, or partnering with Nintendo or Microsoft would make more sense than the financial turmoil they are going through. I don't see a silver lining for them in the console business, but maybe Vita will surprise in its US launch. Outside of that unlikely event happening they are looking at mounting losses that will continue to mount and mount.
I know that sounds childishly naive, but there's a lot to gain from the two companies leveraging their own individual talents.
Its drastic, but the answer might be to take a bulldozer to the Vaoi, Bravia, and Playstation brands, and create a whole new line that encompasses tvs, game consoles, tablets, phones, etc---with a mixture of Android and Sony's own media services.
I hardly see Sony as a software company. From my own experience, their console software (apart from a few companies they bought and kept "independent") is not too good. Based on what I hear from my friends from the corporate part - I don't think they have a history of crunches, constant stress etc - it is much more "relaxed", big corporate atmosphere - it is not a company where what you do can be easily visible to "the boss" (might be wrong - maybe things changed)... Unless they switch to the model of making SW via only "assimilated studios"... and sort of just become another EA.
I don't know if Sony is ready to exit the home game console business just yet, however given the amount of coals in the fire they have compared to what Nintendo has I say it would be safer for them if they chose to do so. Just looking at the list of products they have produced to push games is overwhelming. The have a console, a portable console, a phone, a tablet, Laptop / PC (if they wanted), and a book device much like a kindle. I think Hirai would serve the company best by cutting the excess and going with just two main products for gaming and focusing on how the interface for gamers are going to look on those products. I think trying to monopolize all aspects of entertainment on Sony's terms is not good for Sony as a whole. I felt that is what they have tried to do ever since we entered the PS3 era.
However the vast bulk of the losses are coming from its Consumer Division -Y215B (-$2.8B). This division is the TV, Games, Cameras, etc. It's running huge losses. In fact Sony hasn't made a profit on its TV business in over 5 years. Sony also recently bought its 50% stake in Sony Ericsson the handset business. This unit is also losing huge money. They are taking a -Y33B (-$400M) writedown on this division.
The other parts of Sony are making some money including Pictures (Y35B), Music (Y35B), and the biggest profit center of all is Financial Services (Y100B). Yes, Sony's biggest profits come from its insurance business!
Games, are a very small part of Sony. They have such huge issues in trying to fix the TV business and now to turnaround the Sony Ericsson handset division. Also Sony still has 160K employees! Apple by comparison has just 60K. They just can't make money in consumer electronics under the current structure.
But, going back to what I was saying, copying isn't the answer. There's only one winner. And it mgiht not be you as the Sony phone and other poor performing Sony products prove. And as XBox 360 proves. Someone had to succeed. Unfortunately, it wasn't in Sony's hand this time even though the PS3 is just as capable a computer as XBox. If you look at innovation in terms of the Wii, that system succeeded despite XBox's success. If everybody innovated,everybody would succeed in some way and no one had to lose.
Selling at a loss due to blue ray player, that at the time would have cost anyone else around 1k. Instead they buy a ps3 for 600. Loss on the sale of a ps3, but sony wanted to push blu-ray, they had lines of blu-ray players, and TVs which were relying on this, if the blu-ray failed it would have been a far bigger hit to Sony, yeah sure, if they dropped blu-ray and sold the console for a few 100 less, it might have sold better, but then in all likelyhood the blu-ray player wouldn't have gotten as much support, would have died, and most other divisions in sony would have lost far more than the gaming segment.
As for changes they need to make, they need to fix their prices. Yes the bravia and the viao are sexy, but that isn't worth the price tag. Why buy a viao for 900, when I can buy the same spec laptop that feels a little cheaper for 500? Or maybe even less?
Today isn't a market of "I want to buy the very best." Its "I want to buy the best, within my budget" and budget TVs are what is selling, samsung, LG, similar quality to the bravia, but for half the price tag.
If the ps4 is to stand a chance they need to focus on price, performance and how easy it is to develop for. I'd like to see them stick with the cell as the cpu, with the new manufacturing process they could up the clockspeed and tighten the timings to get a lot more performance out of it. The only problem is its a pain to code for, they'd be better off working on some kind of middle chip which works as a buffer so the cell is seen as a single logical core, and splits the code as needed itself.
whether that'll happen or not though, or if its even possible I don't know.
Sellling the PS3 at loss, gave a huge loss to PS3, but also gave those profits in non-consumer equipment and insurance, since it forced movie studios to use blue-ray and HD and whatnot.
[url]http://www.businessweek.com/news/2012-02-04/panasonic-forecasts-record-10-billio
n-loss-on-floods-charges.html[/url]
If Sony reuses the Cell and keep the same basic hardware then they can keep the dev cycle for the PS4 near to the PS3's. The dev houses have the advantage of knowing how to develop for the PS4 off the bat then there would be no issue with making games on the cheap, or at least cheaper than learning a whole new system. Just res up the graphics, up the AI, and add in some more advanced effects.
Sony would save money and so would the developers.
As pointed out nintendo has a war chest while sony doesn't so sony needs to have more money faster-perhaps lending the sony brand to products someone else makes like the camera,tv,laptop or tablet devisions so sony could consolidate,regroup and rebound keeping brands like playstation for themselves.
The next gen systems should be between $299-399 at most to sell well.
If they do it will be a huge gamble as it will leave the market wide-open for Micosoft and I'm not sure if the network infrastructure is ready but it could also be an inspired decision.
They will never "move to Android". Owning the platform allows you to make huge profits that you just can't make otherwise, look at Apple's bottom line.
Sony problem is not PS. They got issues elsewhere. Kaz Hirai with new managment with be trying to fix that, consolidate right now
A part of your business that is generating several billion dollar in losses during the last 5 years now is not a problem?
Since PS3 slim they are not loosing money on PS3 hardware and obvisouly software wise it is getting better.
PS3 in 4th and in it's 5th this time too is expected to do some 14million. Considering PS2 is still been sold in Asia. Give it another 5yrs. PS3 will exceed 120million and I reckon software will grow. PS3 is just hitting strides now and they hinted targeting on family too.
It's good to know that half a year after http://insertcredit.com/2011/06/20/the-playstation-3-is-hitting-all-kinds -of-str
ides/ the PS3 still has strides left to hit.