Mondays are usually slow for news as people start to stir for the coming week. Therefore, every Monday, we will address one topic to start the week and get discussion flowing. It stimulates the week like a cup of coffee, hence the title.
We’ve reported on Sony’s problems pretty extensively lately. For those of you who haven’t been following, Sony is due to take the heaviest loss in their history at $6.4bn dollars—billion, with a B. Even Sony can’t withstand that without rocking the foundation. Through all of this, it’s the PlayStation division that’s actually among the strongest: the PS3 is now pulling a profit, and the install base has caught up to that of Sony’s competitors. However, through either perception or reality, the market is changing. It’s now Sony’s job to catch up, if only to please speculative analysts.
This week’s question is simple:
What’s next for Sony? Where does their PlayStation division go from here?
Mohamed Al Saadoon: While Sony has indeed been hit hard by the loss of a truly staggering amount of money, I think what Kazuo Hirai is doing is the right way to go. The 3DTV business really turned out to be a bad gamble for Sony, and cutting that out and focusing on the strengths of the company is a sound strategy.
As for the PlayStation brand, it might be static for a little while longer.The PS3 is now doing well so this may delay the release of the PlayStation 4, or whatever Sony will call it, as Sony can’t bear the expense of releasing a new console for a couple of years to come. On the portable side of the business, the PlayStation Vita isn’t doing very well at the moment and might require a price cut that will result in selling the portable console at a loss. That’s not something Sony is keen to do. Worst case scenario, we might see the Vita go to an early grave, but I suspect it will simply follow the PS3’s development cycle: each new iteration removed some features, such as USB ports or Flash memory card readers, in an attempt to make the systems less expensive to produce.
So get ready for the announcement of the PS Slim Vita and don’t hold your breath for the PlayStation 4.
Brandon Mietzner: There’s a lot of dissension in Sony right now. Even though they have a new CEO at the helm, I doubt the internal squabbles will end any time soon. The TV manufacturing division has been hit hard by the worldwide recession, but that isn’t their problem, I think; it’s their arrogance. They started to move away from SD TVs in 2001 or 2002 to HDTVs, give or take; then they went to 3D TVs only five to six years later or so. Clearly, they banked on people buying new TVs frequently. But when you were a kid, how many times did you get a new TV in the living room? I can say from my experience that it wasn’t very often, maybe once every seven to ten years unless it stopped working in the meantime. What did change was the number of TVs that I had in my home during that period, not just the one in the living room. With that being Sony’s only focus, they failed.
The PlayStation division hasn’t been so shortsighted, and this is why the leader of that division is now the head of Sony. The PlayStation division does need to bring back one thing, though: backwards compatibility in the PS4. This was one of the primary features that attracted many gamers to the PS2 and drove many away from the PS3, which lacked that. The fact is, many of us don’t have a whole lot of space. Also, without this feature, it’s been hard for Sony to sell the idea that the PS3 is a well-rounded machine when a previous gen console did what it can’t. That started a lack of confidence in the PS3 and why this feature should come back for the PS4.
To boost the PlayStation brand, Sony needs to establish a more definitive online footprint, and it needs to be a service that will attract not only gamers to the console, but everyone else in the household as well. When you talk about Netflix streaming, a majority of people instantly think of the XBox 360 even though it’s also available on the PS3 and Wii. They also might consider revamping their indie title selection and be more friendly to this group because the PC is about the only place indies can make money. I doubt this will happen because they’re bleeding money, and they need to turn a profit first before they’ll consider being nice. But that’s just how business works.
Connor Horn: I think the mistake Sony made was that they assumed the more advanced product would always be the better product. In every department, Sony would be cutting the edges of the cutting edge because they figured their more technologically advanced product would also be the more desirable one. You can see a little bit of this mentality in the PS3 and the PlayStation Portable series, which were launched under that Sony mindset of, “It’s got more whizzing doodads; please spend infinity dollars on it!”
That said, however, the PlayStation department is probably one of the smallest offenders in Sony. There’s a reason that Hirai’s company-changing plan for fixing Sony had grand visions for every department except the gaming one, which he said would just keep doing what they’re doing already. The PlayStation 3 is starting to catch up in sales as its pricetag falls and its catalog grows, and that’s a good sign for Sony. People like the PlayStation; they’re just not willing to mortgage their houses for one when the Xbox 360 feels like the same basic console but cheaper.
To me, it’s obvious that Sony has given Microsoft a lot of market share through their bumbling around at the start of this console generation, and incidents like the huge database hack last year have made me wonder if they’re even trying to compete anymore. However, I think it’s naive to say that the company is doomed. With some strong market strategies and a little luck, I think Sony can give Microsoft a run for their money in the future. It won’t be easy by any stretch of the imagination, but it sure will be fun to watch.
Nathan Wood: I’m not quite sure why Sony believed that the 3D television idea was really going to take off and become the norm within a household. Heck, I don’t even know of one person who has purchased one. To me, it appears to be much more of a gimmick than anything else, and the price of manufacturing them isn’t cheap, either. However, as far as the gaming side of Sony goes, the PlayStation brand has been the smallest offender and isn’t tied directly to the blunders of the rest of the company.
With Vita sales picking up after a fairly slow start, as well as the PS3 catching up to the Xbox 360 and matching them in sales over the last month or so, that section of the company is running fairly well. Sony seems to be aware of the mistakes they’ve made in the past with both the original PSP and the PlayStation 3, with a sizeable amount of quality titles being available at launch on the Vita front and the rumored specifications of the PS4 being fairly similar to good computers nowadays. Sure, that means the tech would be obsolete in a few years, but it allows Sony to sell at a profit immediately.
Sony will still be around, and if the PlayStation brand stays on its current track and keep a good track record whilst trying to make amends for the hacking incident, I see the company recovering. I don’t see them being able to release a whole new console anytime soon, but their hand may be forced with what Microsoft decides to do. Frankly, Sony would benefit by not releasing a new console well after Microsoft releases their own. That way, Sony can avoid falling behind in the market again.
Christopher Bowen: We’re already seeing the PlayStation division adjust, at least if the specs on Orbis/PS4 are accurate. Relatively speaking, they’re much lighter than they were for the PS3, which was a beast out of the box and priced accordingly. The new system will be parallel to a good PC nowadays but will be underpowered in a few years, meaning that Sony can sell their next system at a profit immediately. And despite the doom and gloom, I don’t think the system potentially locking out used products will impact sales. At least, it won’t impact them any more than smartphones, an aging user base, and natural attrition. People will bitch as they’re buying the system, but Sony will get their money.
The two things to remember are that, this time around, the PlayStation division did well; and unlike in the past, they won’t be operating at a massive loss for the sake of market penetration like they were with the previous two hardware generations. Furthermore, like it or not, the Vita is designed for high margins, considering the cost of flash memory versus the cost of what it takes to buy their cards and the focus on the PSN. So it’s not like drastic changes are needed to help the PlayStation model. In fact, the success of that model is specifically why Kazuo Hirai is in charge of the company now.
I don’t think Sony’s going to do anything drastic with the PS3 and Vita yet. They really don’t have to. The Vita’s picking up steam, the PS3’s numbers have stagnated but are at least comparable to the Xbox 360’s, and PlayStation Plus is looking like a better deal every week. Yes, it’s possible that Sony will start to depreciate their free offerings and put everything short of actual multiplayer play on the PS+ system, as Michael Pachter alluded to, but I don’t think Sony’s going to start engendering bad press with one system they’re trying to sell and another coming down the pike. They’re already likely turning the Orbis into a miniature PC where you have to have a key code for everything, so to go further would be counterproductive.
What Sony’s really going to do is start cutting down their almost space station-like R&D department. That’s a good thing and a bad thing. It’s a good thing because it’s given us a focus on 3D televisions that people simply don’t want, but it’s bad because their former insistence on pushing the envelope gave us the Walkman, the Discman, and other innovations. That could affect Sony down the road because they’re so used to setting the trends, not reacting to them. For now, though, it won’t affect gamers much.