Report: Sony 'on brink of upheaval' - factory, division closures
by Christopher Grant 
{ Jan 5th 2009 at 11:16AM }
While there's no mention of specifics (will the PlayStation brand/division be affected?), the Times does quote a Credit Suisse analyst who says that, unless Sony takes aggressive steps to consolidate power in the hands of prez Howard Stringer – it will be unable to "close the gap with competitors such as Apple and Nintendo." Perhaps more evident to those of us watching the gaming industry specifically is the mention of "frustrations ... and a clear internal cultural clash between Japanese Sony and its US and European operations." We thought Kaz was going to bring some of that good, ol-fashioned American can-do attitude to Japan back in ought-six? Nevertheless, we want to talk to the investors directly:
Listen guys, we know Sony's got some problems. We know that. But you've got to just chill out and relax – chillax even – and wait until the Big S shows off whatever Team ICO's got in the oven. Not buying it? How about this: Microsoft is feeling the economic pinch also, but the grapevine seems to think the Xbox division will be spared. Nintendo isn't the only competition out there, you know?
Reader Comments (Page 1 of 3)
-Vexx- @ Jan 5th 2009 11:24AM
Trouble on the rise =(
superklye @ Jan 5th 2009 1:24PM
Maybe so...
But that picture of Stringer is HILARIOUS!
Lars @ Jan 5th 2009 4:48PM
A friend of mine told me not long ago that there's not gonna be consoles and games for the hardcore audience for much longer. I laughed at that... but perhaps there was some truth in it after all. I don't think hardcore games will vanish, but I do think they will become more of a specialty item, like black powder guns - hard to find, and not much variety.
AoE @ Jan 5th 2009 9:13PM
@Lars,
games that cater to the hardcore are a specialty item already... and have been since day one. It's not that the hardcore part of the industry is being sacrificed to the casual part; we're just watching the mainstream game industry grow up around us right now...
lokar82 @ Jan 5th 2009 11:29AM
So I guess this isn't a good time to get Sony to admit they have a serious problem with defective blu ray drives in PS3s?
*=Lord Negatron of the XBots=* @ Jan 5th 2009 11:50AM
I don't believe they had/have a "Microsoft-like" issue with Blu-Ray players, but i do know as Joystiq and other various sources factually state. Sony is losing money from production costs even the $399(US) bundles.
Even with all the USB's & SanDisk memory slot gone. Its still costs more to make than its selling price. WTF holmes?
*Removes boot from the back of your head*
You may rise...
E.J. @ Jan 5th 2009 12:24PM
With the lack of mainstream acceptance of the BluRay format, Sony can't bank on the licensing fees charged to other BluRay manufacturers due to the fact that a BluRay player is not a mass market product yet (from the mainstream perspective). On the same note, Sony probably cannot get BluRay part prices down to a desirable economies of scale level.
BIGGEN (LIVE-PSN: BIGGEN1103) @ Jan 5th 2009 5:20PM
see, i don't think the problem is the price of the parts to make the players or the price of the players themselves. i think the problem is the price of what the players play. $30 for most new movies is outrageous. yes, there are other places to get them cheaper, but not much, and not everyone knows this. face it, if the movies were cheaper (especially in these times), they would sell more. then again, if anything was cheaper, it would sell more. just look at the wii, gas sales (and where), wal-mart, amazon, any item or anyplace any item is cheaper than its competitors, sells more, period.
Deckard @ Jan 5th 2009 11:37AM
Between the imploding economy and the state of the PS3, I don't think a Shadow of the Colossus sequel or whatever is suddenly going to improve their chances. I think MGS4 proved that, while successful, there is no monolithic solution to Sony's problems.
Hyams @ Jan 5th 2009 11:39AM
GT5 is the card they need to play. GT is the best selling videogame franchise, even bigger than Halo.
Problem is, the game's taking a long time to make. I wouldn't be surprised if Sony started throwing more money and developers at the game, just to ensure it gets a Christmas 09 release.
Christopher Grant @ Jan 5th 2009 11:40AM
It would have to be a REALLY big Colossus, sure. But think about it!
Mitch @ Jan 5th 2009 11:53AM
"GT is the best selling video game franchise"
Any other facts you want to pull out of your ass?
Marty @ Jan 5th 2009 12:01PM
"GT is the best selling videogame franchise, even bigger than Halo."
Blind fanboyism makes one forget about those pesky Super Mario Bros, apparently. There ain't no way in hell GT has sold more games than Mario.
Fernando Rocker @ Jan 5th 2009 12:06PM
"GT is the best selling videogame franchise, even bigger than Halo."
There is a game this gen that has outsold Halo 3 and botht he 360 and PS3 versions of GTA4, and it's called Mario Kart Wii. And that game has been in the charts since the day it was released.
I don't think that GT5, with the PS3 current install base, will be able to even pull more than 6 millions of units sold.
WRE @ Jan 5th 2009 12:13PM
"It would have to be a REALLY big Colossus, sure. But think about it!"
I am. It would have to star 50 Cent and be rated "M" and be called something like "Big Mutha Fuckin' Colossus Blood in the Sand". It would sell billions!!!
wiki fact @ Jan 5th 2009 12:16PM
http://en.wikipedia.org/wiki/List_of_best-selling_video_games#Top_20_console_games_of_all_time
#1 Mario (201 million)
#2 Pokémon (180 million)
#3 The Sims (100 million)
#4 Final Fantasy (85 million)
#5 Need for Speed (80 million,includes Need for Speed Underground)
Maybe he meant PS3 franchise
Hyams @ Jan 5th 2009 12:21PM
Oops, my bad. Totally forgot about Mario.
Hyams @ Jan 5th 2009 12:30PM
... and Pokemon, and (although just) GTA.
So ... fourth best selling franchise? Whatever. It's still Sony's biggest exclusive. If any one game can help the PS3, it's GT5.
Hyams @ Jan 5th 2009 12:34PM
... oh, and The Sims. So ... fifth best?
...
... fuck it. I'm gonna go do something constructive.
Fernando Rocker @ Jan 5th 2009 12:45PM
Hyam
But you have to take into consideration that previous GT games were huge sellers but the install base was huge. That's not the case anymore.
Hyams @ Jan 5th 2009 12:58PM
GT3 (the best selling GT) released in the middle of 2001, when the PS2 hadn't even been out for an entire year yet (the console released at the end of 2000), when the PS2 had a *much* smaller install base than the PS3 currently has (not even 6 million, compared to the PS3's current 19 million).
And in case anyone is wondering, I did actually check my facts this time. ^_^
Little Big PSN ID: johnnynumber5 @ Jan 5th 2009 1:34PM
Fernando,
Another factor to consider is that the next iteration of Gran Turismo will also propel people to buy a Playstation 3. It's not only about the current install base.
Fernando Rocker @ Jan 5th 2009 1:40PM
johny
That has been said since the PS3 release. Every new PS3 title is the game that people are waiting to buy the PS3.
That was said about Lair, Heavenly Sword, Ratchet, even Haze, LBP, and no game has been a really system seller.
And I don't GT5 will be the system seller you are expecting to be.
Rayonic @ Jan 5th 2009 2:28PM
Remember when everyone thought that GT5 was going to go head-to-head with Forza 2? Seems almost comical now. Hasn't GT5 been delayed until 2010? By then the current gen will be 5 years old, and we'll probably be having previews of the *next* gen consoles.
Duke @ Jan 5th 2009 2:30PM
Sure GT5 would sell some consoles for Sony, but it sure doesn't have the power to boost their sales like they need. I don't think there are 5 million people sitting right now saying they can't wait for GT5 so they have a reason to get a PS3.
RagnarokAngel @ Jan 5th 2009 2:50PM
To his credit GT2 was the best selling PS2 game as well (more than FF7)
nathan @ Jan 5th 2009 11:37AM
What if Microsoft and Sony conglomerated? What if instead of having this console war, especially with the economic climate the way it is, they banded together? I feel like a move along those lines would help ease the economic hands squeezing around both their necks. They don't have to become one gaming division, they just have to become more friendly I suppose.
Mitch @ Jan 5th 2009 11:56AM
I don't think you'll be seeing Sony and Microsoft holding hands and singing kumbaya anytime soon...
nathan @ Jan 5th 2009 12:13PM
I am not saying that they should skip across a meadow and throw flowers at each other. Rather, I think it is silly that while the economy is ever so rapidly crashing, these two companies should still be fighting and competing. Picture an epic battle between two armies. If we superimpose the current economic situation on this picture, the effects would be, if you can imagine, that slowly weapons and armor would vanish. Slowly yet surely soldiers will have no weapons to fight with, the result being that both armies are left defenseless and totally vulnerable to any outside force (however minor it may be).
So again, they don't have to have to be best friends, they just need to come together to hold off this economic crap storm.
Farseer (GDI) @ Jan 5th 2009 12:17PM
yeah, isn't that akin to "crossing the streams"?
nathan @ Jan 5th 2009 12:28PM
Maybe not crossing the streams, because one should never let the streams cross! Instead, I would imagine it being both streams running parallel aimed at a certain target. Unless I am reading your comment wrong, and you are alluding to something totally different. In which case, my response looks odd and dumb.
marauder800 @ Jan 5th 2009 1:28PM
I think you mean "merge" or perhaps "cooperate". "Conglomerate" means something else entirely. Mitsubishi is an example of a conglomerate, as they make diverse items from earthmovers and cars, to TV's and medical equipment. GE is another example of a conglomerate with interests ranging from light bulbs, to jet engines to financial services.
nathan @ Jan 5th 2009 2:31PM
Haha! According to who you talk to conglomerate can mean different things, but I agree with you that my choice of word should have been something along the lines of cooperate. I guess it just goes to show you never to feed a live turkey to your lawnmower before 7 PM the next day!
ebola @ Jan 5th 2009 11:39AM
JUST AS PLANNED
Kweli @ Jan 5th 2009 11:42AM
Its too bad, When any of my friends ask me which console to buy I tell them the PS3 has alot more of the games I enjoy... although there are some 360 exclusives i tell them about...
Free online & less failure rate = Winner for most "regular joes"
*=Lord Negatron of the XBots=* @ Jan 5th 2009 12:32PM
Your blasphemous words will not go unpunished.
*Pew Pew!* Those are but mere warning shots. You terrible salesman you. :P
Hyams @ Jan 5th 2009 12:36PM
I personally always tell people to buy a 360. I can't figure out how people justify buying a PS3 over the 360, when the latter costs half the price of the former and offers a very similiar experience.
SoCoolCurt (PSN: KillaKornbread - XBL: SoCoolCurt) @ Jan 5th 2009 1:22PM
yea realistically, i tell them to get a 360 even when i let them know i personally prefer the PS3 but the 360 is a very very solid product for a fraction of the PS3 price.
plus, if someone hasnt already gotten a console from this gen by now then more than likely either A) they aren't really big into gaming and/or B) money is a factor. all this generally points to me making a 360 recommendation. at this point, the experiences with the 2 console are so similar that it basically comes down to price, and what your friends have (so all the extra stuff you pay for with your PS3 is not important to most).
aj @ Jan 5th 2009 2:03PM
It's gotten to the point that you just KNOW that a PS3 is going to be 50$ used and the games will all be 10$ eventually.
It's more than just money being a factor, there's just no reason to pay 500$ for something that will be a lot cheaper in the future. I've still got a stack of PS2 games until then.
And I know a bunch of other folk who will tell you the same.
Maybe that's the problem with the current gen? People see the price of the new stuff, the price of the old stuff, and realize that the old stuff is perfectly acceptable.
matt @ Jan 5th 2009 2:32PM
"It's gotten to the point that you just KNOW that a PS3 is going to be 50$ used and the games will all be 10$ eventually."
And when this day comes, I will be tearing. It. Up. I bought a PS2 for $100 last year and that thing has been spinning nonstop ever since.
Kweli @ Jan 5th 2009 2:38PM
Maybe im just bitter.... Im on my 3rd repaired Xbox, and when i have a choice between buying the same game on either platform i get it for the PS3....
SoCoolCurt (PSN: KillaKornbread - XBL: SoCoolCurt) @ Jan 5th 2009 5:29PM
dude you can't even get a PS2 for $50 (barring eBay). it's going to be a VERY long time before you can get a PS3 for anywhere close to $100. never mind the games and stuff, that thing has so much new and expensive technology in it that regardless of how bad it's doing, throw in the official Blu-Ray remote and the thing can run your Home Theater without a hitch. they'll drop the price soon, but not that far regardless of what happens. this gen is nothing like previous gens in terms of hardware.
giantenemycrab @ Jan 5th 2009 11:41AM
I don't think they'll shut down the PS division considering they've got a few games in the works now, like God of War 3.
However, drastic cuts are likely. I would hope this isn't the beginning of the end for Sony. As a video game fan, I worry what my favorite hobby would become if it was just MS and Nintendo, with only MS catering my kind of games.
We should all really be rooting for Sony right now. Having them pull out of the VG business would be a shockwave I'm not sure the industry could handle very well.
Marty @ Jan 5th 2009 12:08PM
"Having them pull out of the VG business would be a shockwave I'm not sure the industry could handle very well."
I am sure it'll be as devastating as when Sega pulled out, which resulted in the entire industry collapsing...
Oh wait, no it didn't.
That said, competition is good - I doubt you'd be able to buy an Xbox 360 for $199 without it.
giantenemycrab @ Jan 5th 2009 12:24PM
Sega wasn't as big, there was plenty of other competition to fill the void, and the economy was better. Sony pulling out, especially right now, would be much worse than when Sega failed.
Mr Khan @ Jan 5th 2009 12:27PM
But, Marty, SEGA was already on the way out before the Dreamcast even started. The Saturn actually had worse marketshare than the Dreamcast (ok, not if you count all the sales of the PS2 after the PS3 came out). SEGA had reduced themselves to a bit role, and then were finally destroyed
In Sony's case, Giantenemycrab would be partially right. With them out of the picture, Microsoft would be your only alternative for high-end HD gaming, but it wouldn't be as good as a total monopoly for Microsoft, because the Wii would keep the 360 in an aggressive price cut mindset
Ryan LN @ Jan 5th 2009 1:37PM
I absolutely agree. Being console agnostic I believe that with every fiber of my being that competition is *essential* to keeping game prices low and spurring innovation. Imagine where Nintendo would be if they hadn't gotten their asses handed to them over two console cycles and were left to innovate at their own pace. Yikes! We'd still be playing games on cartridges. As for the Sega example cited by Marty, that presupposes the notion that another Sony would step into the void. Not comfortable betting on that during a global downturn. Not at all.
Little Big PSN ID: johnnynumber5 @ Jan 5th 2009 1:41PM
Mr Khan,
Well thats assuming that the Playstation division folds in this console generation. I think that either the next Wii SKU or the next console iteration from Nintendo will include high fidelity HD graphics. If Sony's games division does eventually fold that will open another spot for a new console. Maybe an EA or Apple home gaming console. I think this is all highly speculative on our parts but I just don't see Sony going under or the Playstation division cease to exist. It's just way to much of an established brand and the hardware will be profitable sometime in 2009.
GundamWingEW @ Jan 5th 2009 2:34PM
"We should all be rooting for sony now"
LMAO! Are you fucking kidding me dude? I hope sony fails BIG TIME.
That's what you get for being arrogant.
bm @ Jan 5th 2009 3:29PM
"We'd still be playing games on cartridges."
And this is bad thing, how? I fucking hate loading times.
Oh right, I forgot, no 50 gig available for twelve different spoken language tracks (totally essential for gameplay, there) and duplicate data to make up for the slow read times. Man, the DS is -so- fail with those stupid game cards.