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

jammy2211 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.

 

 Neither console will see exclusives unless Sony or Microsoft pay up, or it's weird extreme circumstances which are few and far between.

 Not sure we'll see less games in developement then the current state, it's a logical conclusion but it seems to be going the opposite way at the moment. Same with the whole cut and paste argument, I see more innovation and variety... but that's just me :/.



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neotea on 04 January 2009
jammy2211 said:
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.

 

 Neither console will see exclusives unless Sony or Microsoft pay up, or it's weird extreme circumstances which are few and far between.

 Not sure we'll see less games in developement then the current state, it's a logical conclusion but it seems to be going the opposite way at the moment. Same with the whole cut and paste argument, I see more innovation and variety... but that's just me :/.

 

The problem with innovation and variety in HD games is huge risk factor with the petential of very low sales.  i.e. mirror edge



I TAKE NO SIDES

Demotruk on 04 January 2009
makingmusic476 said:
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.

 

So what you're saying is that LBP wasn't made on a massive budget, and hence wasn't high risk. So what's your point? There have been high budget high risk games made specifically to make the PS3 more attractive. All I'm saying is that they won't make games for this purpose any more, all games will have profitability as 1st priority. That doesn't mean all big games will stop, but big games will only be made if they're sure sellers.



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mike_intellivision on 04 January 2009
neotea said:
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.

 

Or it could mean pulling out of the console race in favor of being a software provider. Sony was that pre 1995.

I don't think it would do that -- but it is something that I am sure has been considered/discussed at some levels.

 

Mike from Morgantown



      


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neotea on 04 January 2009

Basically think of yourself as a publishing company. would you want to make a game costing 15-20+mill dollars on a new ip with new experience hoping it will sell or making a game 15-20+mill dollars game that has the tried and true method and you know your get you money back atleast.



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heruamon 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.

 

 

If you already have the capacity to develop for the PS3, say like Square does, it would be crazy to not do multiplatform, since it's been reported by several developers that it's not that much more to do so, and you also reduce your risk.  The issue is for developers that DON'T do ps3 might be resistant to doing so, and take for example Blizzard.  They are current the top PC developer, imho, so porting to the 360 is an easy task, but are they going to be willing to port to ps3 as well?  Maybe not, and they aren't likely to allow another part of Activison to simply handle the port, as they are concern about their branding.  Another example is Bioware...sure, they were bought, but for powerful development shops like them, they have ALOT of sway with the main corporate office.  Lastly, how likely will someone like Bungie be to expand, given the risk in completely standing up the expertise to develop on the ps3?



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neotea on 04 January 2009

As a 3rd party publisher the best and safest route would be multi-plat (unless the game has enough clout to stand on its on as an exclusive) or be a bought out exclusive.



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heruamon on 04 January 2009
neotea said:
As a 3rd party publisher the best and safest route would be multi-plat (unless the game has enough clout to stand on its on as an exclusive) or be a bought out exclusive.

As a general rule, I'd say yes, but look at how slow developers have been to port games to the wii...even with it's massive lead on 360ps3. 



"...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
heruamon said:
neotea said:
As a 3rd party publisher the best and safest route would be multi-plat (unless the game has enough clout to stand on its on as an exclusive) or be a bought out exclusive.

As a general rule, I'd say yes, but look at how slow developers have been to port games to the wii...even with it's massive lead on 360ps3. 

 

Oh i wasnt saying port out to wii or make more wii games altough it could help.  What i meant was make multi plat ps360 and pc.



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NJ5 on 04 January 2009

Here is a list of Sony's major divisions:

Electronics
Sony Ericsson (Mobile phones)
Game
Pictures
Financial Services
Sony BMG Music Entertainment
All Others

Of those, the ones posting a loss in the last quarter were:

- Sony Ericsson ($18 million loss)
- Game ($429 million loss)
- Financial Services ($275 million loss)
- Sony BMG Music Entertainment ($45 million loss)

In the previous fiscal year as a whole, the Game division was the only one posting a loss ($1.35 billion at today's exchange rates).

If the article is right in claiming that major divisions will be abolished (a pretty bold claim), the Game division doesn't look safe at all in this context.

 



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