Sony falls to a new 30 YEAR low. Markets just dont believe them.

[gumby_trucker]

Dodece said:
Synergy is what ails Sony. To be more specific the desire to be both insular and synergistic. In the marketplace any company needs to choose its battles, and make the best decisions on a product by product basis. Others have levied a finger at the PS3 as an example, and it is a perfect example. Had Sony not seen the product as a means to create a market for other Sony products. The product could have been tailor fit for continuing a market domination while at the same time being highly profitable.

Instead in serving synergy which was not integral to the product being successful. Sony forfeited what amounted to a cornered market, turned a profit maker in to a unprofitable product line, and even managed to harm their own software development studios. It didn't even help the parasite divisions. You can argue it spurred a new video format to sole survivor status, but ironically the increased pace has only served to reduce the profitability of that product line. While the chip business only seems to have ever lost the company money.

Now were that not all bad enough. This synergy has another consequence. It makes the competition much more antagonistic then it would otherwise be. For example we all suspect that the only reason that Microsoft doesn't support a certain media format is that Sony used it in their console business. Which only lead Microsoft to go out of its way to exacerbate a format war. Which cost Sony a hell of a lot of money. Had that format not been in that console would Microsoft have even bothered.

The irony of it all is if Sony decided to do either one thing or the other. They would probably be profitable, but because they try to do both at the same time. They only double their number of hurdles and opponents. That is what Sony really needs to do take their divisions, and make it about one thing or another. Take their gaming for example. Were they to go solely software they would make money. Were they to go hardware well then they could be selling components to their current competitors, and once again making money.

However right now they are hurting both. By operating in a synergistic loop. Which undercuts their own ability to make the best possible profit while making more enemies then they could afford to have. What Sony needs to be doing is making peace with some of their rivals so they can have partners to be synergistic with rather then going it alone, and trying to do everything in house. If they were for example to subcontract with one of their gaming rivals. They could work in a bigger market with more opportunities. They wouldn't have to own the platform, but could get concessions. Then that company might reciprocate with one of their other products.

Sony could be successful by looking to be a better partner with other companies. Instead of competing with just about everyone on the planet. That way they can gain access to things that might drive product lines. For the sake of a example if they weren't at Microsoft's throat, and were making games for Microsoft's platform. Then it would be possible for them to lobby to incorporate Kinect into their devices say Televisions which might drive up greater demand for their products, or they could get preferential treatment for their music business on Live.

Anyway I just don't see anything like that happening. I see Sony trying to continue to wage wars on far too many fronts while not creating allies to work with to mutual benefit, and it will stay that way until Sony is forced to sell worn out units at a severe discount.

Good post, despite some questionable punctuation.

The last thing I see Sony doing is going third party with their games division (as a Nintendo fan there is nothing I would want more ) , but I completely agree about the obsession with synnergy basically crippling the company during the last ten years.

This really is a huge problem. Since the 90s Sony has been planning for a major convergence revolution that never happened the way they predicted it. It's quite sad really, they saw a lot of trends ahead of their competitors, but completely failed in predicting how those trends would play out. They were essentially blinded by their own vision of the future, and while this vision was far from being completely wrong, it was fundamentally misguided due to Sony severely underestimating the difficulty of the task at hand, as well as completely missing the boat on the software revolution of the 90s.

Subsequently they have almost universally bet on all the wrong horses. I've been trying to think about one or two major mistakes the company has made since then, but really there isn't a short list of things that would need to change in order for the company to return to a position of leadership. As Dodece says, Synnergy is what ails Sony, but on the other hand to many of its customers and even to itself, at least for the last ten to fifteen years synnergy IS Sony. They've pursued this goal so single-mindedly I doubt they have the ability to form a different path for the company as a whole. Even if they can accomplish this I don't see them remaining competitive, as whatever it would be will involve facing companies with more experience than them. Many of these companies are also much smaller, and hence more agile and also more focused, both qualities Sony lacks.

Sadly I can't see any available move that would do more than delay their inevitable demise. I guess Sony is an idea who's time has passed.