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[Opiate]

Please note: this article is not exclusively about the Games division, and is not a "PS3 is doomed" article. It's based on analyst estimates of billion dollar losses in the near future for Sony. If this is deemed not about "gaming," that's fine, but this appears to be a fairly wide spread issue for Sony.

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article5446963.ece

First portion of the article:

Sony, the embattled Japanese electronics group, is on the brink of a corporate upheaval that could see job cuts and sweeping changes to management and manufacturing processes.

Company sources have told The Times that operations across the group are braced for a series of “sacred cow-slaying” measures that they believe will abolish or fundamentally alter many of Sony's long-established business practices.

The expected restructuring - considered by many analysts to be occurring far too late - is likely to be announced early next month, with the lion's share of the changes imposed on Sony's domestic Japanese operations in the form of factory closures and the abolition of several major divisions.

The restructuring is expected to be unveiled after this month's Consumer Electronics Show in Las Vegas and comes as analysts are warning that Sony faces long years of multibillion-dollar losses unless its president, Sir Howard Stringer, is given free rein to take on the company's old guard and erase many of its legacies.
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Analysts are issuing blunt warnings of an impending flood of red ink in Sony. Their calls for deep changes in the company - supported by large investors - predict an imminent “all or nothing” moment for Sir Howard and the company of which he took charge in 2005.

 

[whytemyke]

I just need enough upheaval to drop the PS3 another hundred dollars. so not like total upheaval... just a touch of it though would be ok with me.

 

[Relix]

What you know! People lose jobs on a global recession!!

This was entirely expected... and more are soon to come.

 

[Tobor]

I just need enough upheaval to drop the PS3 another hundred dollars. so not like total upheaval... just a touch of it though would be ok with me.

The problem is, there's only one way it drops in price that much this year, and it's not the kind of price cut anyone around here wants.

 

[WickedAngel]

You should've posted this in Gaming. I guarantee that it would've resulted in a 20 ban minimum.

 

[sprsk]

PS3 is going to be one of the first up against the wall.

 

[Anti Green]

What you know! People lose jobs on a global recession!!

This was entirely expected... and more are soon to come.

That's not the only reason, though. Sony has had to post some serious losses recently, but that's because they can't seem to sell their products as well anymore, including the PS3.

 

[Tobor]

You should've posted this in Gaming. I guarantee that it would've resulted in a 20 ban minimum.

From how he worded the OP, it sounds like he thought he did.

 

[Opiate]

Yes, I'd like to request moving this to gaming, in hindsight. I wanted to avoid fighting, but this does seem like (easily) the most significant of the recent Sony observations, and almost certainly will have some impact on the Games division, if the "upheaval" is as large as suggested.

 

[wenis]

You should've posted this in Gaming. I guarantee that it would've resulted in a 20 ban minimum.

and so it begins....

 

[whytemyke]

The problem is, there's only one way it drops in price that much this year, and it's not the kind of price cut anyone around here wants.

 

[SRG01]

What you know! People lose jobs on a global recession!!

This was entirely expected... and more are soon to come.

Not to mention that Sony makes most of its money in overseas markets. The exchange rate is the real thing that's killing them right now.

 

[Opiate]

From how he worded the OP, it sounds like he thought he did.

No, I worded the post wrong, not the thread. I struggled to decide where to put it -- I really don't want to start a flame war, if possible, but this does seem like very relevant news.

 

[legend166]

PS3 is going to be one of the first up against the wall.

The meltdowns would be amazing. I almost want it to happen just because of that.

 

[Divvy]

The meltdowns would be amazing. I almost want it to happen just because of that.

Does anyone have links to the threads when Sega killed the dreamcast? I would love to savour that.

 

[LiveFromKyoto]

This is depressing to read. "Analysts" and "investors" say this needs to be done. This isn't like the west. Japan has no mechanism, no established practice for people to change jobs mid-career en masse. As bad as being laid off is here, it's so much worse there.

For investors, it's some cash. For analysts, they're just spectators. For the people who are going to lose their jobs, they're going to lose everything. It's impossible to appreciate what unemployment does to a Japanese person, the stigma they're going to carry for the rest of their lives - employers don't understand, even with the economy the way it is - and how crushing it is.

I hate reading stuff like this, where entire family's lives are tossed around like baseball statistics by people with no real stake. I know people in Japan who work the worst jobs I can think of, being ground to nothing by their companies, never seeing their children, being driven to alcoholism, because it's a mortal sin to leave your job in most industries (software is one of the few exceptions where it's okay to move around). Wives threaten to leave if they even think about it. Being let go - people look on it like being fired because you were considered dispensable by the company.

 

[DiddyBop]

anyone could see this coming,because it used to be all about sony,sony playstation,cameras,tvs,but now the competition is much greater.

 

[titiklabingapat]

Gaming is one they *hope* to make a profit very soon because their TV division isn't doing as hot as it used to.

If they can't turn it around, I don't know what else they can do.

This is depressing to read. "Analysts" and "investors" say this needs to be done. This isn't like the west. Japan has no mechanism, no established practice for people to change jobs mid-career en masse. As bad as being laid off is here, it's so much worse there.

For investors, it's some cash. For analysts, they're just spectators. For the people who are going to lose their jobs, they're going to lose everything. It's impossible to appreciate what unemployment does to a Japanese person, the stigma they're going to carry for the rest of their lives - employers don't understand, even with the economy the way it is - and how crushing it is.

I hate reading stuff like this, where entire family's lives are tossed around like baseball statistics by people with no real stake. I know people in Japan who work the worst jobs I can think of, being ground to nothing by their companies, never seeing their children, being driven to alcoholism, because it's a mortal sin to leave your job in most industries (software is one of the few exceptions where it's okay to move around). Wives threaten to leave if they even think about it. Being let go - people look on it like being fired because you were considered dispensable by the company.

Japan needs to change then.

 

[WrathOfOtaibah]

Unfortunate but expected. We're in a global recession.

PS3 is going to be one of the first up against the wall.

I don't think Sony would kill the PS3 but there sure as hell are not going to be any price drops anytime soon.

 

[SRG01]

Gaming is one they *hope* to make a profit very soon because their TV division isn't doing as hot as it used to.

Primarily because other brands -- particularly Samsung -- have cut into their traditional markets. If anything, Samsung is the new star of the Asian markets, as it has been routinely successful in nearly all areas they've invested in. The list of successful companies in Asia is long.

That being said, all companies are being hard hit by the recession. It's just that Sony gets hit harder because it's a hulking giant and unable to adapt to change.

Unfortunate but expected. We're in a global recession.



I don't think Sony would kill the PS3 but there sure as hell are not going to be any price drops anytime soon.

The PS3 might not, but Blu-Ray players have already come down in price by a fair amount. $199 Samsung players? Yes, please!

 

[Rorschach]

The meltdowns would be amazing. I almost want it to happen just because of that.

BECAUSE OF THE LULZ AMIRITE?! LOL ONLYRSN BCUZ LULZ!

 

[Snaku]

PS3 is going to be one of the first up against the wall.

 

[LiveFromKyoto]

Japan needs to change then.

In many ways. But importing our soulless ideas about "downsizing" and "rationalization" isn't one of them. Just because we're all used to it doesn't make it okay. It's always presented as a matter of survival for the company, but we all know it rarely is.

 

[cjdunn]

I think it's a misread to expect price drops on anything. It'll be two choices: increase the profit margin on a product or drop the product. <cough>Rolly</cough>

 

[lunarworks]

Sony Records and Sony Pictures need to be spun-off into a separate entity. Their fundamental philosophical differences with the electronics division have been holding the company back for years. Two heads that want to go in different directions.

The electronics division needs to get more competitive. Sony has seemingly positioned itself as a luxury brand, which is why I saw 50x more people walking out of Future Shop with cheap-shit Chinese "Insignia" HDTVs than Sony ones. Back in the day everyone used to want a Sony TV, now they just buy the $500 re-badged store-brand Chinese one.

They need to embrace standards, rather than constantly try to unnecessarily reinvent the wheel. However, they should also keep innovating, because some of the best stuff has come out of Sony, but they NEED to be less proprietary about what they come up with.


It's a great company. They just need to get back to their roots and get their shine back.

 

[Tobor]

Sony Records and Sony Pictures need to be spun-off into a separate entity. Their fundamental philosophical differences with the electronics division have been holding the company back for years. Two heads that want to go in different directions.

The electronics division needs to get more competitive. Sony has seemingly positioned itself as a luxury brand, which is why I saw 50x more people walking out of Future Shop with cheap-shit Chinese "Insignia" HDTVs than Sony ones. Back in the day everyone used to want a Sony TV, now they just buy the $500 re-badged store-brand Chinese one.

They need to embrace standards, rather than constantly try to unnecessarily reinvent the wheel. However, they should also keep innovating, because some of the best stuff has come out of Sony, but they NEED to be less proprietary about what they come up with.


It's a great company. They just need to get back to their roots and get their shine back.

If you read the article, the consensus is that the reverse is true. Content is king, and if anything, the TV business should be what they take a long look at.

Koya Tabata, a Credit Suisse analyst, recently warned investors that the restructuring of Sony is perilously overdue and must be radical. Sony management needs to make a rapid shift in its business model to one driven by earnings in the content business, he said.

The focus of research and development must be on software, he said, adding: “The most important thing is that, to improve organisational strength in the areas of development, purchasing and marketing, it will be necessary to further concentrate power in the hands of [Sir Howard] and unless this is achieved we believe [Sony] will be unable to close the gap with competitors such as Apple and Nintendo.”

 

[StriKeVillain]

What you know! People lose jobs on a global recession!!

This was entirely expected... and more are soon to come.

I'm just hoping car prices plummet as well. Looking to make a purchase late this year.

 

[Kipz]

BECAUSE OF THE LULZ AMIRITE?! LOL ONLYRSN BCUZ LULZ!

Think of the YTMNDs which would be made!

 

[lunarworks]

Content is king, and if anything, the TV business should be what they take a long look at.

Content is king... as long as you can keep up the arms race against piracy.

 

[sikkinixx]

PS3 is going to be one of the first up against the wall.

That'd be quite the fuckin thing to see.

Imagine Sony just "DONE!" and pulling a Sega. IF that were to happen what of all their devs? Naughty Dog, Guerilla, etc.? Do they stay like Sega and put out games on 360/Wii or do they sell them off? Crazy thoughts

 

[legend166]

BECAUSE OF THE LULZ AMIRITE?! LOL ONLYRSN BCUZ LULZ!

Come on, you wouldn't want to see Private Hoffman have a mental breakdown right before our very eyes?

 

[Tobor]

Content is king... as long as you can keep up the arms race against piracy.

I'm not sure how that's relevant, but I guess I agree?

EDIT: or maybe not?

 

[Ignatz Mouse]

I've been to far out of the game scene to know what would happen to PS3 devs, but it would certainly mark the end of an era. Thanksfully, I've become so casual a gamer that there are tons of things I have yet to buy for a long time.

 

[Mindlog]

No, I worded the post wrong, not the thread. I struggled to decide where to put it -- I really don't want to start a flame war, if possible, but this does seem like very relevant news.

It's quite relevant. However, the chances of this thread moving forward in any kind of productive manner in the gaming forum...

___
I also agree that people seem to be too quick to draw the 'recession' argument into things. There are many factors at work here. I'll be interested to see what happens.

This is depressing to read. "Analysts" and "investors" say this needs to be done. This isn't like the west. Japan has no mechanism, no established practice for people to change jobs mid-career en masse. As bad as being laid off is here, it's so much worse there.

For investors, it's some cash. For analysts, they're just spectators. For the people who are going to lose their jobs, they're going to lose everything. It's impossible to appreciate what unemployment does to a Japanese person, the stigma they're going to carry for the rest of their lives - employers don't understand, even with the economy the way it is - and how crushing it is.

I hate reading stuff like this, where entire family's lives are tossed around like baseball statistics by people with no real stake. I know people in Japan who work the worst jobs I can think of, being ground to nothing by their companies, never seeing their children, being driven to alcoholism, because it's a mortal sin to leave your job in most industries (software is one of the few exceptions where it's okay to move around). Wives threaten to leave if they even think about it. Being let go - people look on it like being fired because you were considered dispensable by the company.

Good read.

 

[ViperVisor]

Gaming side of GAF can be too insulated.
Most brush off the fuck-ton of $ that PS3 has cost Sony while I am stunned,

 

[Tobor]

Gaming side of GAF can be too insulated.
Most brush off the fuck-ton of $ that PS3 has cost Sony while I am stunned,

That's putting it mildly. :lol

 

[soul creator]

If you read the article, the consensus is that the reverse is true. Content is king, and if anything, the TV business should be what they take a long look at.

looks like Sony is about to join the OCF movement

teehee

 

[Raistlin]

This is depressing to read. "Analysts" and "investors" say this needs to be done. This isn't like the west. Japan has no mechanism, no established practice for people to change jobs mid-career en masse. As bad as being laid off is here, it's so much worse there.

For investors, it's some cash. For analysts, they're just spectators. For the people who are going to lose their jobs, they're going to lose everything. It's impossible to appreciate what unemployment does to a Japanese person, the stigma they're going to carry for the rest of their lives - employers don't understand, even with the economy the way it is - and how crushing it is.

I hate reading stuff like this, where entire family's lives are tossed around like baseball statistics by people with no real stake. I know people in Japan who work the worst jobs I can think of, being ground to nothing by their companies, never seeing their children, being driven to alcoholism, because it's a mortal sin to leave your job in most industries (software is one of the few exceptions where it's okay to move around). Wives threaten to leave if they even think about it. Being let go - people look on it like being fired because you were considered dispensable by the company.

It really sucks, but that sounds to be a societal issue.

I hate seeing people lose their jobs, but I'm not sure how one can expect companies that exist in a global market to be able to simply keep people on the job if the markets dictate changes in the company? Is it better if the entire company folds after a number of years, and everyone loses their job?

 

[DeaconKnowledge]

I'm not terribly abreast as to the performance of Sony's other divisions, So I can't say I expected this.

Still, as far as i've known of them Sony has always been the "luxury" electronics manufacturer. I really have to wonder if we'll see that end now.

 

[Crayon Shinchan]

Dropping the PS3 now would be stupid.

The financial damage has already been done, it's barely just reached the recouping losses stage. Dropping the price now would also be stupid; they're barely just recouping costs per unit!

And if they kill of the Playstation brand... that's a whole lot of wasted potential. Massive opportunity cost; considering they can pursue a Wii style strategy next gen; create a low cost console based off previous architecture, but with compelling software, designed to create a profit for each unit from the get go, so regardless of marketshare, it won't be a massive red-ink division.

Cutting the brand would just be foolish slash and burn strategy... and if we haven't learnt from the current financial recession, at least that much, then what the fuck have we learnt?

 

[GenericPseudonym]

That'd be quite the fuckin thing to see.

Imagine Sony just "DONE!" and pulling a Sega. IF that were to happen what of all their devs? Naughty Dog, Guerilla, etc.? Do they stay like Sega and put out games on 360/Wii or do they sell them off? Crazy thoughts

I imagine Sony would rather sell or spin-off SCEI rather than just dismantle it. As such the in-house developers would probably be sold off to other companies, while some would be able to raise enough cash to become independent.

However, I doubt Sony would ever pull the plug on the PlayStation, it has hit a rough patch but one doesn't casually throw away such a historically strong division that quickly. Downsize? Absolutely! The PS4 will not be a technological juggernaut, the PSP2 may never materialize but there is no way that the PlayStation will die.

Unless it fails as bad next generation.

 

[nyong]

Yikes. How the mighty have fallen.

Between high-def gaming not (really) catching on in Japan, slowing HDTV sales, and Blu-ray's future in question, things don't look good for Sony.

Of course I don't really know what I'm talking about. These things seem fairly major in my mind, though.

 

[The Faceless Master]

This is depressing to read. "Analysts" and "investors" say this needs to be done. This isn't like the west. Japan has no mechanism, no established practice for people to change jobs mid-career en masse. As bad as being laid off is here, it's so much worse there.

For investors, it's some cash. For analysts, they're just spectators. For the people who are going to lose their jobs, they're going to lose everything. It's impossible to appreciate what unemployment does to a Japanese person, the stigma they're going to carry for the rest of their lives - employers don't understand, even with the economy the way it is - and how crushing it is.

I hate reading stuff like this, where entire family's lives are tossed around like baseball statistics by people with no real stake. I know people in Japan who work the worst jobs I can think of, being ground to nothing by their companies, never seeing their children, being driven to alcoholism, because it's a mortal sin to leave your job in most industries (software is one of the few exceptions where it's okay to move around). Wives threaten to leave if they even think about it. Being let go - people look on it like being fired because you were considered dispensable by the company.

sounds like a problem with society, not a problem with analysts and investors.

 

[DeaconKnowledge]

Dropping the PS3 now would be stupid.

The financial damage has already been done, it's barely just reached the recouping losses stage. Dropping the price now would also be stupid; they're barely just recouping costs per unit!

And if they kill of the Playstation brand... that's a whole lot of wasted potential. Massive opportunity cost; considering they can pursue a Wii style strategy next gen; create a low cost console based off previous architecture, but with compelling software, designed to create a profit for each unit from the get go, so regardless of marketshare, it won't be a massive red-ink division.

Cutting the brand would just be foolish slash and burn strategy... and if we haven't learnt from the current financial recession, at least that much, then what the fuck have we learnt?

You're acting as if slashing and burning isn't a common corporate practice.

If this situation is anywhere near as bad as it's being made out to be, then Sony 's going to have to cut deep. If that's the case who knows where they'll cut from.

 

[WrathOfOtaibah]

They won't be cutting the PS series.

Although wave any potential price drops goodbye for a while. Time to dig deep and it is better they recuperate costs than worry about the competition.

 

[Regulus Tera]

Does anyone have links to the threads when Sega killed the dreamcast? I would love to savour that.

Seconded. I was not internet savvy back then, I want to know.

 

[WrathOfOtaibah]

There was a breakdown so great that the guy's name is now censored

 

[jett]

I was a gaffer at the time of the Dreamcast death...but strangely enough I don't remember much.

 

[Gamer @ Heart]

I hope the restructuring doesnt hurt the plans for their latest unveil.

 

[LJ11]

Same old song and dance. Sony's been going through this for years, but at least they had the PlayStation brand to fall back during their "rough patch." SCEI was basically their driver, no longer the case. Bravia proved to be a winning product line, until it fizzled out when cheaper competition flooded the market. Sony needs a growth driver, it's stagnate, relying on old/tired product lines.

Analysts/Journalists have suggested break-ups, much like lunarworks did, but Sony always shrugged it off. Stringer would magically unite everyone, synergies, and all that jazz. Easy to say, harder to do. He did spin off their financial arm (a pretty good earnings driver in its own right), which was a smart thing to do given the current economic environment, though they still have a significant stake.

Sony's an interesting company. They have a ton of potential, tons of resources, yet can't find away to pull it all together and leverage it to their advantage. Culture, both corporate and regional, has a lot to do with it.