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Forums - Sony - Kaz lays out future...

VGKing on 12 April 2012
kowenicki said:
Commentators don't seem too impressed.

He says he cant shy away from painful decisions but then he just says we will grow without really showing how.

He is predicting some pretty massive growth over the next 2 or 3 years but how will this be achieved?


Painful Decisions = Cutting 10k jobs.
Massive Growth = Restructuring and fucusing more on their strongest businesses which I believe he said are Games, Mobile and Cameras.

Gaming is 1 or the 3 strongest "cores" of Sony. It is not going anywhere. Sorry Nintendo/MS fans.



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DirtyP2002 on 12 April 2012
Andrespetmonkey said:
So if Sony goes down, is there anyway the PS brand could be saved? It IS profitable and still hugely popular, could another company somehow buy the brand or Sony?


Sure, things like that happen all the time.

A very tiny example: Rockstar bought the Max Payne franchise from Remedy.
The playstation brand, the studios etc are quite an investment so the options are numbered.

Just the ones that COULD make sense: Samsung, Microsoft, Apple, Google, IBM and that's probably it. And even these are VERY unlikely



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Rath on 12 April 2012
Andrespetmonkey said:
So if Sony goes down, is there anyway the PS brand could be saved? It IS profitable and still hugely popular, could another company somehow buy the brand or Sony?


Sony would more likely be broken up than to go down as a whole. The unprofitable divisions would be spun or sold off leaving a smaller profitable company behind.



mjk45 on 12 April 2012
mike_intellivision said:
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

That's interesting as it is the first article I have seen that mentions 70 million units in 3 years all the others just mention 3 years to overall profitability , and It really seems suspect considering that it would mean 23 million plus Vitas sold per year , especially as it includes year one sales and they tend to be among the lowest in a products life cycle , taking that into account and  the fact that at that rate it would sell approx 117 mill in 5 years , plus that number conveniently ties in with the psp's lifetime numbers  I'm suspicious .



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mike_intellivision on 13 April 2012
mjk45 said:
mike_intellivision said:
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

That's interesting as it is the first article I have seen that mentions 70 million units in 3 years all the others just mention 3 years to overall profitability , and It really seems suspect considering that it would mean 23 million plus Vitas sold per year , especially as it includes year one sales and they tend to be among the lowest in a products life cycle , taking that into account and  the fact that at that rate it would sell approx 117 mill in 5 years , plus that number conveniently ties in with the psp's lifetime numbers  I'm suspicious .

Again, that was almost a year ago, so if production costs have been lowered, the figure may not be as high. But Sony execs (Kaz himself) is cited as the source for the number.



      


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PlaystaionGamer on 14 April 2012

if they want to get big in the TV area again they need to make TVs that just look nice at around £400. it doesn't matter whats inside to the average consumer, as long as thats screens nice they don't care. shove Wi-fi in there for dirt cheap and make it internet enabled. Done



Legend11 on 14 April 2012

Was Kaz in charge of the division when PSP Go, Playstation Move, and Vita were each being launched?  If so I don't have any faith in him being able to overcome the serious challenges facing Sony.



VGKing on 15 April 2012
kowenicki said:
Well it appears the markets aren't convinced

Since his announcement the share price has continued to drop following the losses announcement.

The strategy was presumably to release the financials prediction, the counter with the kaz speech.

It failed

Stock has fallen 14% this week, wiping about $2.3bn off the value of the company.


Does that turn you on or something? I see you always posting negative Sony news and comments but always defend Microsoft.(You were even defending Kinect Star Wars the other day)

I think you've made it pretty clear what your intention here are.



VGKing on 15 April 2012
Legend11 said:

Was Kaz in charge of the division when PSP Go, Playstation Move, and Vita were each being launched?  If so I don't have any faith in him being able to overcome the serious challenges facing Sony.


No, No and No.

1. PSP Go was just an experiment. Mainstream wasn't/will never be ready to download full games that could reach the 2gig mark, at least not without 4G and unlimited data.
2. PS Move was an accessory. I think it sold pretty well for one. It was never Sony's intention to turn the PS3 into a casual machine.
3. Don't think he was in charge during Vita launch, Japanese or Western.



Jereel Hunter on 16 April 2012
VGKing said:

Does that turn you on or something? I see you always posting negative Sony news and comments but always defend Microsoft.(You were even defending Kinect Star Wars the other day)

I think you've made it pretty clear what your intention here are.

 

VGKing said:

Gaming is 1 or the 3 strongest "cores" of Sony. It is not going anywhere. Sorry Nintendo/MS fans.

It's almost as if that's looked down upon if it's not Sony one is defending...