Wall Street Journal on Sony.... Ouch!!!

[senseinobaka]

bdbdbd said:

@senseinobaka: Sony does have new console and new handheld in R&D (and "improvements" to existing ones). I doubt they are going to give up. Sony wants to get back its investments, so they propably reuse as much as possible for PS4 from PS3 and next gen Sony will have a lot better strategy than this gen.

Sony's official party line is that there is no R&D on a PSP2 and that the PS3 is a 10 year cycle machine. Now to be fair, Nintendo has also denied a DS2, however their R&D budget is burining thru 100's of millions of dollars a year. Sony's gaming division has no reported increase in R&D spending. And from their own comments, especially, their said desire to make the gaming division profitable, it's really hard to imagine Sony bleeding more money on R&D at this point. I think sony will reuse alot of mature technology like Nintendo does (a comapany that has been profitable since it entered the gaming market), but I dont think they will have a strategy to match Nintendo next gen since they already have a very hefty head start in R&D.

Also, sony isnt making any feature additions to the PS3, if anything they have been removing functionality since E32005. You wouldnt believe how happy I am to have a 60GB launch system. As for the PSP, feature additions do come routinely, but these are simple changes that require no R&D, such as a newer screen.

NJ5 said:
Your post would make sense, but I have two problems with it. I don't see Sony's game division doing any significant layoffs yet, and I still don't see that they'll become profitable with the measures done so far. Did I misunderstand anything?

I dont think you can really expect layoffs in the gaming division. The sony owned labor is at a higher level (management and executive). The manufacturing, game development, etc are all outsourced. So layoffs would come in the form of not extending or cutting corners on contracts, which they have done.  Also the measures sony has taken has improved their situation and as component prices come down the effect will be additive. But as someone mentioned earlier, being in the black is not profit, profit it making enough to be in the black, recoup all losses, and then some more.