TheBigFatJ on 09 October 2007
Price cut, Sony is desperate but Apple is not. I just think "desperate" is a very strong word and I think Sony or Microsoft or Nintendo are doing OK in terms of making money (not all from video game department though).
Sony isn't in bad shape, but they're on financially shaky ground. Even if you consider the strength of the company as a whole, you still have to justify many things to investors when you run a publically traded company.
For example, MS is financially strong but they realize their Office/OS monopoly will not last forever, so they're trying to diversify. Their investors are getting a little weary about whether entertainment is the right direction for them, since they lost 7 billion so far doing the Xbox thing. That's why they're pushing so hard for profitability this fiscal year -- they need to prove to investors that a profit can be maintained over a 1 year period, so they can suggest to investors that the Xbox can one day be profitable on its own. And if it can't, there would be no point continuing it.
The fact is that right now both Sony and Microsoft are losing a lot of money with their new consoles. Sony is more likely, in my opinion, to profit with the PS3 over all but I don't think classifying some of their moves as desperation is unreasonable at all -- they've been selling assets (and a division) to keep the PS3 afloat, effectively, and they've been making some very questionable moves to save seemingly small amounts of money with the PS3.
The very way in which they talk to their customers seems to suggest desperation, if not the fact that they are willingly reversing stances long held by the company and praised by its fans (the BC thing). It reminds me of Apple switching to Intel chips -- "we're better because we use RISC based processors" was a big tagline at Apple, then they came out and said, "we're faster because we switched to Intel chips, just like everyone else runs." That was a pure reversal and Apple fans refused to call Apple out on it. It was a desperation move because Apple was desperate to compete on the performance side of things again.
