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Forums - Sony - Sony on the brink of corporate upheaval, drastic changes

jammy2211 on 04 January 2009
richardhutnik said:
Demotruk said:
richardhutnik said:
Demotruk said:
My prediction for what Sony will do with SCE:

Keep it. They'll scrap other divisions and sell various intellectual assets for finance but since they wouldn't get a good price for SCE they'll cut their losses. ie. They'll continue to produce the PS3 but won't drop the price unless it's selling at a profit. They'll continue to make software, but more conservatively. Lower budget, lower risk titles. They'll lean on third parties for bigger titles. They will not spend money on R&D for future consoles until they are in a more stable financial position.

Cutting back on your own development, and leaning on third-party, when you are the last place console, is to end up putting yourself even further behind, because you don't have as much of a chance of producing exclusive killer apps.

 

 

The ultimate goal is not to win the console war, but to make money. Sometimes you have to cut your losses.

That is true, but momentum and all the benefits that come with having marketshare, come from winning the console war.  In the videogame business, if you make yourself a niche player, third party developers leave you, and you end up not having people buy your console, and you drop off the cliff and eventually have to stop making consoles.  This is what happened to Sega and others.

 

 It's a bit different this time, because third parties won't abandon the PS3. Developing a game for PS360 costs an extra 5%-10% on the costs of making it a 360 exclusive, no one's going to ignore a 20 million+ userbase while the console market is like it is.

 I'm not really sure what Sony can do to turn SCE's figures around other then wait. Maybe shut down the crappy developers they have that no one cares about, but it'd all be pretty insignificient.

 



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ssj12 on 04 January 2009
heruamon said:
ssj12 said:
Sony is probably going to cut manufacturing of all products 30- 50 %. They already cut PS3 manufacturing so they wont be bleeding as much. The PSP and PS2 they make money off of so they wont cut manufacturing.

We might see one or two facilities being temporarily shut down in Sony's main sites.

Still this isnt much of a shock. A ton of businesses are getting hurt. Nintendo might be seeing record profits but those profits are dropping the farther the worse the yen - euro and yen - dollar difference becomes.

I'd expect even Google to start hurting if this crap continues.

cutting manufacturing cost another 30-50% for the ps3 would be pretty darn impressive, especially if nothing is taken out of the console.  I have my doubts about their ability to do so, but they seem to be an efficient bunch.  I hope that sony con indeed recover, as they push another console makers to innovate and deliver better products to the consumer, which is what's most important, at the end of the day.

 

You misunderstood, they will stop producing a certain amount of products. Instead of 500,000 HDTVs they will only produce 200,000.



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makingmusic476 on 04 January 2009
Demotruk said:
makingmusic476 said:
Demotruk said:
richardhutnik said:
Demotruk said:
My prediction for what Sony will do with SCE:

Keep it. They'll scrap other divisions and sell various intellectual assets for finance but since they wouldn't get a good price for SCE they'll cut their losses. ie. They'll continue to produce the PS3 but won't drop the price unless it's selling at a profit. They'll continue to make software, but more conservatively. Lower budget, lower risk titles. They'll lean on third parties for bigger titles. They will not spend money on R&D for future consoles until they are in a more stable financial position.

Cutting back on your own development, and leaning on third-party, when you are the last place console, is to end up putting yourself even further behind, because you don't have as much of a chance of producing exclusive killer apps.

 

 

The ultimate goal is not to win the console war, but to make money. Sometimes you have to cut your losses.

 

The losses are coming from hardware sales, and not the software produced by Sony's studios.

 

I realize that. That's why they won't be making big risky pushes to sell consoles any more. They won't aim to be the market leader but instead profit from software sales. This means a different kind of software strategy, similar to how Sega changed after dropping their hardware.

 

Outside of MGS4 and GT5P, the "big" software hasn't done much for hardware sales.  However, the software HAS been selling very well, pulling in revenue.  LBP was made by ~37 people in three years.  It is currently at 1.65 million in sales, and will possibly sell over 4 million when all is said and done.  They want more games like that, not less.



heruamon on 04 January 2009

Imho, after ps2, sony shouldn't have had to be in the position to fight for market share, and it is a serious testament to how the implementation of ps3 failed. Do you see Intel or M$ or many other HUGE market share leaders giving away their flagship products away to gain market share? The playstation brand lost serious market share by sony's arrogance and lack of vision and insight into the lay of the land. Look at the current battles M$ is facing with operating systems and browsers....sure they surrendered some dominance, but it's only going to be temporary, imho. Sony simply overreached with ps3, and they are getting hammered for it, and they can't lower cost fast enough to counter the loss in market share.



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mike_intellivision on 04 January 2009

If the focus of R&D must be on software development -- what does say for the next generation of console hardware?

Mike from Morgantown

It had to be asked.



      


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neotea on 04 January 2009
jammy2211 said:
richardhutnik said:
Demotruk said:
richardhutnik said:
Demotruk said:
My prediction for what Sony will do with SCE:

Keep it. They'll scrap other divisions and sell various intellectual assets for finance but since they wouldn't get a good price for SCE they'll cut their losses. ie. They'll continue to produce the PS3 but won't drop the price unless it's selling at a profit. They'll continue to make software, but more conservatively. Lower budget, lower risk titles. They'll lean on third parties for bigger titles. They will not spend money on R&D for future consoles until they are in a more stable financial position.

Cutting back on your own development, and leaning on third-party, when you are the last place console, is to end up putting yourself even further behind, because you don't have as much of a chance of producing exclusive killer apps.

 

 

The ultimate goal is not to win the console war, but to make money. Sometimes you have to cut your losses.

That is true, but momentum and all the benefits that come with having marketshare, come from winning the console war.  In the videogame business, if you make yourself a niche player, third party developers leave you, and you end up not having people buy your console, and you drop off the cliff and eventually have to stop making consoles.  This is what happened to Sega and others.

 

 It's a bit different this time, because third parties won't abandon the PS3. Developing a game for PS360 costs an extra 5%-10% on the costs of making it a 360 exclusive, no one's going to ignore a 20 million+ userbase while the console market is like it is.

 I'm not really sure what Sony can do to turn SCE's figures around other then wait. Maybe shut down the crappy developers they have that no one cares about, but it'd all be pretty insignificient.

 

 

They certainly wont abandon the ps3.  your likely to see less and less exclusives and with the way publisher not faring to well in profit your most likely see less and less games in development.  Also your see games that wont have as much experiment to them since they dont want to take the risk and your  likely see more of cut and paste games.



I TAKE NO SIDES

tk1797 on 04 January 2009


 

neotea on 04 January 2009
mike_intellivision said:
If the focus of R&D must be on software development -- what does say for the next generation of console hardware?

Mike from Morgantown

It had to be asked.

 

most likely that mean less R&D on console  than before.



I TAKE NO SIDES

heruamon on 04 January 2009
ssj12 said:
heruamon said:
ssj12 said:
Sony is probably going to cut manufacturing of all products 30- 50 %. They already cut PS3 manufacturing so they wont be bleeding as much. The PSP and PS2 they make money off of so they wont cut manufacturing.

We might see one or two facilities being temporarily shut down in Sony's main sites.

Still this isnt much of a shock. A ton of businesses are getting hurt. Nintendo might be seeing record profits but those profits are dropping the farther the worse the yen - euro and yen - dollar difference becomes.

I'd expect even Google to start hurting if this crap continues.

cutting manufacturing cost another 30-50% for the ps3 would be pretty darn impressive, especially if nothing is taken out of the console.  I have my doubts about their ability to do so, but they seem to be an efficient bunch.  I hope that sony con indeed recover, as they push another console makers to innovate and deliver better products to the consumer, which is what's most important, at the end of the day.

 

You misunderstood, they will stop producing a certain amount of products. Instead of 500,000 HDTVs they will only produce 200,000.

 

 Aaaah...got it.  Given the layoffs, your point makes more sense, when considered. 



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

neotea on 04 January 2009
neotea said:
jammy2211 said:
richardhutnik said:
Demotruk said:
richardhutnik said:
Demotruk said:
My prediction for what Sony will do with SCE:

Keep it. They'll scrap other divisions and sell various intellectual assets for finance but since they wouldn't get a good price for SCE they'll cut their losses. ie. They'll continue to produce the PS3 but won't drop the price unless it's selling at a profit. They'll continue to make software, but more conservatively. Lower budget, lower risk titles. They'll lean on third parties for bigger titles. They will not spend money on R&D for future consoles until they are in a more stable financial position.

Cutting back on your own development, and leaning on third-party, when you are the last place console, is to end up putting yourself even further behind, because you don't have as much of a chance of producing exclusive killer apps.

 

 

The ultimate goal is not to win the console war, but to make money. Sometimes you have to cut your losses.

That is true, but momentum and all the benefits that come with having marketshare, come from winning the console war.  In the videogame business, if you make yourself a niche player, third party developers leave you, and you end up not having people buy your console, and you drop off the cliff and eventually have to stop making consoles.  This is what happened to Sega and others.

 

 It's a bit different this time, because third parties won't abandon the PS3. Developing a game for PS360 costs an extra 5%-10% on the costs of making it a 360 exclusive, no one's going to ignore a 20 million+ userbase while the console market is like it is.

 I'm not really sure what Sony can do to turn SCE's figures around other then wait. Maybe shut down the crappy developers they have that no one cares about, but it'd all be pretty insignificient.

 

 

They certainly wont abandon the ps3.  your likely to see less and less exclusives and with the way publisher not faring to well in profit your most likely see less and less games in development.  Also your see games that wont have as much experiment to them since they dont want to take the risk and your  likely see more of cut and paste games.

HDtv adoption rate didnt go as plan so tv sales are not what is expected. they do profit from blu ray disc and hardware, but its not as much as people think since the profit is shared in the blu ray associations.

 



I TAKE NO SIDES