Kutaragi admits "decline" in Sony's hardware capabilities
by Vladimir Cole 
{ Sep 9th 2006 at 4:55PM }
On the heels of Sony's decision to delay the European launch of the PlayStation 3, Reuters caught Sony's Ken Kutaragi in a rare moment of straight talk:
"If you asked me if Sony's strength in hardware was in decline, right now I guess I would have to say that might be true."
He left himself some waffle room there with that "I guess" and that "might be" language, so we'll put it to you, dear reader. What's the over/under on the chance that Sony's hardware capabilities have been gaining strength?
[Thanks, Babylonian]
Reader Comments (Page 1 of 2)
flyguy @ Sep 9th 2006 5:01PM
The new Sony PR team already has their hands full...
Bart @ Sep 9th 2006 5:03PM
That picture makes it look like he put on some weight... Maybe he's getting a bit stressed.
NoHitHair @ Sep 9th 2006 5:06PM
Translation: "We pissed away our advantages. I have no idea how the hell we're going to pull through."
PSWii360 Fanbot @ Sep 9th 2006 5:05PM
What mnay people will probably miss it that he is talking about the company's hardware as a whole, not the PS3. But this has already been speculated on for many months now.
MysticX @ Sep 9th 2006 5:07PM
Why doesn´t that surprise me? They said the game crap when the PS2 was about to be released! "Play Toy Story graphic capable games on the PS2", and they say it has linux and you can make indie games on it, yeah right, you can´t do crap with the linux in PS2.
They are in the phase now where they decrease the capabilities of their computer, like they did at e3 2005, 120fps! 2 HDMI ports! blablabla, now nothing of it adds up. Their just full of crap and sadly, most people don´t care, even though they are being lied to.
Shaun @ Sep 9th 2006 5:12PM
actually he says nothing of 'capabilities' - which you are implying a reduction in hardware performance (and allowing people to then assume you mean PS3). in actual fact he's refering to retail dominance when they say hardware power.
Jason W @ Sep 9th 2006 5:12PM
Come on people. Im starting to feel bad for Sony. All this bad PR.
I dont think the PS3 will be all that bad. Im not sure if its worth 5 or 600 bucks, but it will be a good price for a bluray player.
shivr @ Sep 9th 2006 5:12PM
Sony hardware's strengh hasn't really been the power of the hardware itself, but the power of the brand and of software supporting the hardware.
The fact that they're now trying to focus on being more of a media center rather than a console for the playstation brand, moreso than last generation at least, really doen't play on that strength, and that's what people should really be worried about.
Rom Tanks @ Sep 9th 2006 5:15PM
If this is true then they only have themselves to blame, Sony certainly had the technological know-how and financial capability to keep the competition at bay for many years.
DBX00 @ Sep 9th 2006 5:15PM
It must be a slow news day. Clearly Sony isn't the electronic powerhouse it used to be, but things changed with time and competition.
vidGuy @ Sep 9th 2006 5:21PM
"Clearly Sony isn't the electronic powerhouse it used to be, but things changed with time and competition."
Bingo. And with the moves they've been making with the PS3, it looks like they won't be a powerhouse in the videogame realm any longer.
DBX00 @ Sep 9th 2006 5:29PM
vidGuy
I don't disagree with you on that at some point Sony won't be #1, but I don't see that happening with this generation. None of the competition is offering anything compelling enough to challenge the playstation brand.
XBOX360 - still lacks a broad range of titles that are single player focused (not everyone wants to constantly get their butt kicked online)
PS3 - currenlty expensive as hell, but gives you all the cutting edge stuff in one package
Nintendo - innovative controls (which may prove as risky as adding Blu Ray to the PS3 if they aren't as accurate as people expect), relatively cheaper, lack of next-gen graphics, and only has its current first party franchise titles (that has put it in 3rd place)
JJ @ Sep 9th 2006 5:30PM
Cant fault the guy for being honest about his companies manufacturing technology. I mean heck with all the new upstarts in the hardware business that are gaining ground, I think a LOT of brand names like Sony/Samsung/Toshiba/Panasonic aren't doing as well as they used to.
Heck I myself just bought a brand new 42 inch Plasma from Vizio...since it was cheaper than the brand names and Vizio aint a bad little company, but still companies need to realize you need to back up your brand name with substance...Even the mightiest of corporations seem to be have brand name problems, like take the original xbox, with the amount of money behind MS, it should of been simple to just strong arm everything to get your way on brand name alone, but things dont always work like that.
Hopefully sony will realize this too and they cant depend on their brand name all the time, which is why i guess they're trying to push the envelope in a sense with the PS3 and all its new fangled tech.
In cases like this though... i cant help but think the companies "behind" the system will have the last laugh i mean... look at IBM its making money off of all 3 next gen consoles as its helped developed the chipsets for each one, so no matter which one wins, IBM gets the money! Thats the way to do it.
Chris @ Sep 9th 2006 5:34PM
This is getting pretty bad... whether you're a Sony fanboy or anti-Sony Wiitard or XBot, this bad PR for Sony is just making things seem... bleh.
The console war isn't any fun without equal backing on each side. I still won't call anyone 'biased', but this is just... *sigh*
Ninegauger @ Sep 9th 2006 5:35PM
The real story here is the lack of hyperbole...
"Sony Exec Open Mouth Without Making a Fool of Self"
Nigeria @ Sep 9th 2006 5:43PM
Rupert is begging for the spotlight. Give him the attention he clearly deserves.
Tobor @ Sep 9th 2006 5:49PM
The real quote is not much better there Rupert. I'm supposed to spend $600 on a complex piece of electronics from a company who admits there level of manufacturing has declined? No thanks.
TSO @ Sep 9th 2006 5:52PM
Rupert, are you fucking stupid or just severely challenged? It's fine that you are to bat for Sony, but give it a rest. Read this you shmuck:
http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=reutersEdge&storyID=2006-09-08T124607Z_01_T73859_RTRUKOC_0_US-SONY.xml
If that's too much for you than just read the article. It is a different source than what you are referring to. Just so you know, KK is not attacking your precious PS3 but is talkign about the company as a whole. Get a fucking grip you pussy and stop being abnoxious.
Have a GREAT day
elite @ Sep 9th 2006 5:55PM
http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=reutersEdge&storyID=2006-09-08T124607Z_01_T73859_RTRUKOC_0_US-SONY.xml
Did you not see this link here?
They quoted directly off of Reuters, not from InformationWeek of United Business Media.
vc @ Sep 9th 2006 5:56PM
Rupert got his ass banned for spamming the comments section with profanity. No need to respond to his trolling.
Izuna Drop @ Sep 9th 2006 5:58PM
I'll set the over, under at 5 overstatements/sentence by Kutaragi.
TSO @ Sep 9th 2006 6:04PM
Ahh, yes, thank you. I apologize for my post and the profanity used therein.
Sorry everyone.
Lone Starr @ Sep 9th 2006 6:09PM
Amazing picture.
the_game_master @ Sep 9th 2006 6:12PM
the bigger they get the harder they fall, and down they go into gaming obscurity as meager 3rd party developers.
will Sony be making a return as Sony Imagesoft and join the ranks of the defunk hardware party of:
Sega
SNK
3DO (bankrupted)
Atari (a mere shadow name of its former self)
Frosty22 @ Sep 9th 2006 6:20PM
With the way things are going for Sony, I bet that they will have to recall all of the PS3's to change out the power source because they are catching on fire like their batteries do. Just a guess :)
Poor Sony.
Pedro Van Faulk @ Sep 9th 2006 6:34PM
So what this means is that Kutaragi admitted something that even sony fanboys cannot.
Dave @ Sep 9th 2006 7:04PM
"So what this means is that Kutaragi admitted something that even sony fanboys cannot."
What, that Sony has more competition now for hardware manufacturing, meeting consumer demand for a system launch, and crappy PR? Coupled with unrelenting fanboyism attacks on THE INTERNET, etc., I find this shocking, SHOCKING, that someone might consider report after report after report on this site about the crap Sony does wrong to be a bias. It may very well be, but for the record, wouldn't the reaction to what Sony has to show at TGS be more indicative of whether or not the site here is expressing an overt bias?
I can't exactly think of any Sony related articles coming from Joystiq here regarding an actual strong lineup for the PSP, a decent Winter lineup for the PS2, or clear explanations that blue-ray diode manufacturing isn't something controlled by $ony (argh! grr!). Again, without them actually having their crap together to showcase, I would imagine they'll try to lowball expectations as much as possible before the TGS. PR certainly isn't going their way right now...
Now considering ALL that, this launch for the PS3 wouldn't be any different from other system launches, except Sony had very high expectations, which they can't follow through with. Does that really give carte blanche to a site that considers itself (and it's content) to be unbiased, informative, and accurate? Weren't there the exact same problems with shortages and software complaints at the launch of the 360? Isn't it true that the Wii controls might not be as fine and dandy as people say/think they are? They may very well be- and it's something that people will learn once the hardware starts making its way into people's homes. But again- I don't expect the tide of bad news/perception by a lot of people out there to turn favorably towards Sony before the end of the month, provided they're pulling out all the stops. Barring something insanely positive to critics' perception in general coming to light before then, naturally. But we'll see.
AK @ Sep 9th 2006 7:08PM
I am willing to bet, that if sony does not come out on top this generation, they will exit the console business altogether.
In the business market, in order to be considered successful, you have to beat your previous performance by 15%. The ps1 did well. The ps2 did well. If the ps3 doesn't capture 75% of the marketshare, it will be seen as a failure. Especially given the much higher production costs of the ps3.
In my opinion, the ps3's on ebay will stay on ebay. Retailers remember the 360 shortage. The only difference is, there was no alternative to the 360, besides the current gen consoles.
Retailers know now, more than ever, that there will be ps3 production shortages and they will be scarce. Every person that walks out of a store without a ps3 is a potential sale lost.
Why wait for the ps3 (who knows when we are going to get more?), or spend $2000 on ebay, when half of the games are on the 360?
If $400 premium 360's were going for $800-$1200 on ebay, you can expect a 200-300% markup for the ps3. The only difference is, now you have an alternative.
People that were looking to buy the 360 when it launched, weren't in the market for a current gen console. They had no interest in buying a ps2, or Gamecube, or xbox. They wanted a new console console.
The 360 will have plenty of good titles come christmas time, a lot of which are also on the ps3.
We know the wii shouldn't have any production problems.
(Thanks Robert ;)
It should have plenty of launch games to boot.
You can spend almost half of what you'd spend on the premium 360, and get a wii, with some sweet games.
Either way, you win.
Dealing with ebay, hoping you get the item you bought, spending close to $2000 for a video game machine.
Why put yourself through that?
The 360 and wii are here now, with games to boot.
Retailers can't sell what they don't have, and they aren't going to tell your average mom to goto ebay and risk getting ripped off $1500.
It is a different market now, than when the ps2 launched. Half of the games weren't on the dreamcast, and the xbox and gamecube weren't out yet.
I'll put money on it, when your average mom or dad comes in to buy a ps3 and it's not there, the first questions out of the sales persons mouth will be
"Do you have a HDTV?", and "How old is your child?"
The answers to those questions will determine which pitch the parents are going to get. Like I said, the stores can't sell you what isn't there, but there are cheaper alternatives.
devian @ Sep 9th 2006 7:18PM
Maybe someone should tip him off that their reputation is declining too.
Kevout @ Sep 9th 2006 7:29PM
I guess now maybe I probably won't be getting a PS3 until it's $400, more than likely.
hey alex @ Sep 9th 2006 7:48PM
Sony faces an uphill battle. Is the worst over? Hard to tell. I'll reserve my opinion until sometime after the PS3 is launched. Sony is betting the entire company on Blu-Ray, which is not yet mainstream.
What we do know about Sony: They're in debt. They've borrowed a huge sum of money (almost a billion dollars). They've closed or consolidated divisions. Robots are out. It'll take years to recover the billions spent on developing and marketing the PS3 (+ Cell & Blu-Ray). Their TV business is making a comeback, although they stubbornly want nothing to do with plasma. Digital camera sales are healthy. The rest of the business remains a question mark. Both the movie and music divisions have ups and downs. And those divisions have a large say in protecting digital content, which unfortunately cripples/inhibits some of Sony electronic product offerings. Sony is more apt to develop proprietary technology than embrace existing technology.
Sony needs to be more nibble. They need to react faster to the marketplace and consumer demands. They need to listen to what the consumer wants.
Had Blu-Ray and HD DVD come to an agreement over the next generation format, we would have all be much better off, instead of the two competing formats we have today.
Anonymouse Rep @ Sep 9th 2006 7:37PM
Couple of choice quotes from the actual article:
"Sony now has a market value of $43 billion, less than half of rival Samsung Electronics Co. Ltd.'s $112 billion, which was smaller than the Japanese firm before 2002."
"Shinko Securities analyst Hideki Watanabe sees both the PS3 delay and the battery recall as manifestations of deeper problems rooted in poor management decisions taken during the 90's when Nobuyuki Idei was at the helm. He says Sony was slower than rival Matsushita Electric Industrial Co. to recognize the rapid shift to digital from analog technologies and was quicker to adapt. Matsushita worked harder at shortening lead times and cutting costs. In the digital era speed is everything," Watanabe said. "This is Idei's legacy. The new management knows what it has to do but there is such a big gap. Matsushita is running at full speed and it won't be easy for Sony to catch up."
"He sees the PS3 production problems as a far more dangerous development because the game division has been a cash cow for Sony, helping keep the group afloat as it posted heavy losses on core electronics products.
"I see a major risk that Sony's presence in the game market will weaken," he said. "Investors will have to start considering the possibility in the future that the game division will not produce any real profits at all."
These three little snippets from this article are MUCH more important than anything that Ken said in the article. For example, the note about Samsung - it wasn't that many years ago (about 5, actually) that Samsung was MUCH smaller than Sony, as the article states.
About that time, Samsung made several major changes, and now in the field of LCD and plasma TV's, they not only have twice the market value, but they have a much better reputation in the marketplace itself. This can be seen at your local Wal-Mart in the game cases. All those high def TV's that they put up - they're ALL Samsung - even the one over the Sony game case. When you walk through a store, all of those TV's hanging all over the place showing ads - they're all Samsungs as well.
Obviously Microsoft made a big plunge when they went with Samsung for the TV's for their interactives as well - that was sort of a given that they wouldn't use Sony.
If this was isolated to a retailer and a competitor, then it wouldn't be a big deal. But go into casinos, where there are hundreds and thousands of high def televisions. With few exceptions, they're all Samsung as well.
Now - as a corporation, Microsoft always has and probably always will have software as the base. As much as Apple and Linux users would like to think otherwise, Microsoft software still runs 95% of all PC's in the world. With an OEM license for XP running the manufacturer about $70 per computer (according to Lockergnome and CNNMoney - "Microsoft gets more than 80 percent of its $13 billion in annual Windows revenue from PC makers, who install the operating system on new PCs. The cost of Windows - estimated at around $70 - is included in the price we pay when we buy a new PC") and as a company, Microsoft itself has a market value of $284 billion.
It's common knowledge that Microsoft has deep pockets. They could afford it if the 360 tanked - which it's obvious to just about everyone in the business that it has not. Sony has made some moves to diversify - purchasing CBS records and Columbia and Tristar Pictures, owning Sony Assurance (automobile and life insurance) over the years. BUT - they don't have a steady basis for what is effectively guaranteed income. Movie studios have come and gone, record labels have done the same - and obviously electronics firms have done the same as well, since it's basically impossible to actually find an American made TV anymore. (Anyone else remember Magnavox?)
Net result - Sony has lost market share to Samsung and to others in the tv market. Sony has lost market share to others in the movie and music market - which is one reason they're gone almost completely spastic on the DRM issue. Now, the one bright spot on the Sony horizon has been their video game market - and they're shooting themselves in the foot again by irritating (and ignoring) Europe, and by being caught in blatant lies.
As a culture - and this is NOT racial bias, it's merely an observation - a sincere apology goes a LONG way with the Japanese. Remember that in the actual AP announcement, Ken said, "I am so sorry not to be able to answer to all the expectations." Effectively, that covered them in Japan. They could've shipped 100 units to Japan, and they'd be okay now. (Which, come to think of it, might've been the brighter thing to do, and sent 50,000 or so to Europe, just to NOT completely dump on Europe.)
I honestly expect that, if Sony can ship 400,000 units to the U.S. this fall, that they will all sell. I have no doubts of that happening, presuming that they do ship. As a corporation, though, Sony has to be scrambling at this point, and holding on by their fingernails. As was said earlier, the ONLY thing really keeping Sony afloat at this point is video games. If, as Watanabe considers, investors start to see Sony as losing it's profitability in the gaming market and then pulling out, Sony WILL go in the tank - period.
I've not mentioned Nintendo in here for a simple reason - and this is NOT to pick on the Wii (other than the name) - it's just that the Wii is NOT in the same graphics category as PS3 and Xbox 360. Gameplay MAY be pretty close - but raw computing power and video capabilities - you're not even in the same league. You know it, and we're all fine with it. It's not an issue, quite honestly. (Hell, that's one reason I run DOS-Box on my PC - the graphics don't matter as much as being able to get the gameplay from some of those old PC games - although it's almost amusing running a game that was designed for a 20 MHz PC on a 2 GHz machine.)
IceTeeth @ Sep 9th 2006 7:49PM
So, now that sony is destroyed, what are u guys doing next?
Dr.Swiss @ Sep 9th 2006 8:45PM
"So, now that sony is destroyed, what are u guys doing next?"
I'm going to Disney World!
Jecrell @ Sep 9th 2006 9:01PM
"So, now that sony is destroyed, what are u guys doing next?"
"I'm going to Disney World!"
I'm going to have sex with a woman!
Muttley @ Sep 9th 2006 9:03PM
"So, now that sony is destroyed, what are u guys doing next?"
Play Wii!!!
PSWii360 Fanbot @ Sep 9th 2006 9:07PM
@ 35
I guess that rules out any more sex with men?
makesevenupyours @ Sep 9th 2006 9:15PM
"33. So, now that sony is destroyed, what are u guys doing next?"
HAHAHAHAHAHA!! LMFAO!!
some reason i think thats really funny...
and 31 and 28 both made great posts.
even if the ps3 is far inferior to ps2, i think the MINIMUM it will grab is 30% of the market...now thats QUITE the drop, but i dont think that will stop them. if this is a flop, they will make at least one more console.
H-QB @ Sep 9th 2006 9:29PM
Wheres all the blind Sony defence? Especially from the person who said "I'll expect Nintendo to go 3rd party etc etc etc" ... lol, these people must be suffering from Foot IN mouth disease
Negativecool @ Sep 9th 2006 9:30PM
Honestly, if Sony goes the way of Sega (though people can't seem to fathom it, it CAN happen) and completely tanks...I will shed a tear. Some of the best games I have ever played have been on either a PS1 or PS2. Games that have tugged my heart strings and changed me in some way. It is a rare thing to really care for characters in a game, so I will mourn the loss of the company and its console that brought those games to me.
I don't want to see any of these systems go belly up, I want to see hard faught competition between the titans of gaming. But I fear Sony has made it nye impossible for them to keep up.
Since it is football season, I will explain it this way. Sony, Microsoft, and Nintendo are the best of the best in the gaming arena.
Now, when the two best football teams play eachother, the only way to hope to win in a game like that is to execute perfectly, and NOT make any turnovers.
Sony is fighting against the best of the best, but since they've made so many turnovers at this point, it is impossible for them to win the game.
They have dropped the ball and handed the ball over to Microsoft and Nintendo that by the time they launch in Novemeber and sadly also in March, it is like Sony is going into half time down 40-0.
Night Elve @ Sep 9th 2006 9:34PM
@ 31.
Well yeah considering that Samsumg is one of the two companies that develop the RAM that is used in every PC, of course it should earn more money than Sony per year =P
Spudnick @ Sep 9th 2006 10:03PM
the more you lie that more ugly you get
its the Pinocchio effect
Tom @ Sep 11th 2006 5:48AM
Some of the best Playstation 1 & 2 games are third-party. If Sony tanks, we can all look forward to more games from the Final Fantasy, Metal Gear Solid, and Devil May Cry serieses being released for Wii and Xbox 360. Some games I'll truely miss (assuming Sony never becomes a third-party developer themselves for other consoles) include Gran Turismo, Jak and Daxter, and ICO/Shadow of the Colossus. All are great franchises. All are on the verge of extinction....
Psaakyrn @ Sep 9th 2006 10:56PM
You know, I can't believe no one has mentioned he may be trying reverse psychology.
oops. :P
But eitherway, this is plain damage control after their blue diode bombshell. Sony had to to this in order to calm the stockholders down; I'm almost 100% sure this speech would come up with the "reforms" buzzword as well.
PSWii360 Fanbot @ Sep 9th 2006 11:08PM
This is the thing:
Sure all of this bullshit has changed my mind about even trying to buy the PS3 at launch, but it will still sell out. There are enough stupid fucking parents that spoil their children in order to ensure that happens. And it will continue to sell out for the year to come, but it doesn't change the fact that the real gamers (the ones with purchasing power past their parents allowance, birthdays and christmas) just aren't buying into the hype. I don't want a PS3. I just don't. Maybe in three years but a weeks worth of pay for a system, a game and some extra controllers, is horseshit.
Anyone that claims otherwise just isn't paying attention.
Negativecool @ Sep 9th 2006 11:19PM
What a huge ironic embarassment it will be when Sony doesn't sell out its initial shipment and instead has a large surplus its entire lifespan.
I mean seriously, I hear a lot of internet chatter about people who've decided to wait to buy the PS3 but are sure it will sell out.
Now, what if, and I do mean WHAT IF, by some hilarious twist of tragic irony, the #1 game console company on the planet can't sell 500,000 of its launch units because of Sony's PR blunders and production problems EVERYONE decided to "wait and see."
Ha ha ha...mmmm, yummy.
PSWii360 Fanbot @ Sep 9th 2006 11:45PM
Oh, come on. As I said earlier, there are so many confused parents that this thing will SELL. And it will continue to sell. The PS3 will be a status symbol. If parents are buing their kids $300 iPods, what's to stop them from buying $600 PS3s? Not much I assure you.
These people are pawns of commercialism..
LaughingTarget @ Sep 10th 2006 9:42AM
The problem with the idea of the PS3 being a status symbol is its lack of portability. The iPod is perfect for this because you could clip it to your belt and the whole world knew you were on the cutting edge. The PS3 sits snugly under your television, and because of the wireless controllers, may be hidden behind a wooden door. It is very difficult to show off to anyone but people you're comfortable letting into your home. I'm sure Mom and Dad would have issues with Junior bringing in tours of kids just to stare at the entertainment center.
LaughingTarget @ Sep 10th 2006 9:42AM
48 -
I hardly see the humor in that. While I believe through armchair analysis using my still somewhat underdeveloped skills that Sony is going to do poorly, this is not something I, or any rational person for that matter, should actually hope for. I would preferably see the three console makers on equal footing, each getting only a third of the market. This would be optimal for competition and usher in a gaming Renaissance.
I will use a modified quote from The Dragon Knight series by Gordon R. Dickson (I still miss ya Gordie, your series died way too often), which was spoken by the character Carolinus when he was threatening to pull out of the Magical Bank:
"I'd like to see those arrogant fools after I've pulled my support. Lets see the table of gaming stand on two legs."
Original quote has "magic" instead of "gaming".
Night Elve @ Sep 10th 2006 12:08AM
@ 47.
Judging people just because their videogame console choice, it is just plain stupid.
You just can not say that someone is stupid because they will buy a PlayStation 3 and some other people are very smart because the will buy a Xbox 360 or a Nintendo Wii.
If you think like that then your mind is so childish.