Kaz lays out future...

[mike_intellivision]

What I cannot understand is how the stock price went UP after this announcement. Sometimes, I think investors like job cuts more than they like hate money losses. And with Sony, the losses (paper and real) are nearly $10B USD over the last four years.

How does this relate the Playstation brand? One thing is that as a "pillar" it will be expected to pull its weight. It is even thought as a unit to bring all of Sony back to profitability (http://www.vg247.com/2012/01/11/hirai-playstation-to-lead-sony-back-into-profitability/). That could translate into a much different approach to the gaming side of things than in the past as the division will be looked upon to fund others rather than be funded by other units.

For example, while there are reports that Vita is being sold for more than its production cost (at its current $249 USD) (http://www.gamesthirst.com/2011/06/08/ps-vita-will-be-profitable-on-day-one/), Kaz himself is quoted last year as saying it would take three years and 70M in sales for the venture to be profitable (http://www.pocketgamer.biz/r/PG.Biz/PlayStation+Vita/news.asp?c=30520). Given the current sales trends, it is doubtful the Vita will sell better than the PSP over the next three years. But cutting price will increase the number of units that have to be sold to recoup the start-up costs and too much of a cut could push the unit into a per-unit sales loss.

Likewise, the inability to front money from other divisions could be the reason for the great variation in rumors on the PS4's power (slight jump to big jump over the PS3) and timetable (2013? 2014?). Sony is still trying to pay off R&D for the PS3 and cannot turn elsewhere in the company for the start-up funds.

Finally, that same lack of funds in other division and drive to be profitable in gaming may make the company less able/more hesitant to "fund" third-party exclusives.

My advise:

Sony's best bet would be to put a machine out there that is more capable than the WiiU but not overboard like the Xbox 720. It would need to come out about the same time as Microsoft's next console. And it needs to forget about Move which has not caught on but rather "stick to the knitting" and offer involved gaming experiences for game players.

Also, it cannot do something which might disrupt sales chains -- like prohibiting used games from playing. That would lead to GameStop probably not carrying the unit in the US (or globally) which could stunt sales. (Sega offended KB Toys when it per-released the Saturn in May 1995. The mall-based toy store chain NEVER carried the console. Thus, if you went there, you bought the competition. So doing something that causes a place where people are looking to buy your product to not carry it is not a good move.).



Mike from Morgantown