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Report: Major Sony Restructuring Brewing
Following Sony's December announcement that it will cut 16,000 permanent and temporary staff, a new report says the CEO of the Japanese-based PlayStation house will make even wider-reaching changes to the company to avoid multibillion dollar losses.
The Times U.K. on Monday paraphrased unnamed company sources who said Sony will "abolish or fundamentally alter many of Sony's long-established business practices." Changes would be primarily focused on Japanese operations with "factory closures and the abolition of several major divisions."
The extent to which Sony's game division will be affected by the rumored restructuring is unclear.
Such changes by British CEO Sir Howard Stringer have met resistance from Japanese management, the report said, but analysts say sweeping restructuring, expected to be announced early next month, is long overdue.
Creidt Suisse analyst Koya Tabata said, “The most important thing is that, to improve organizational strength in the areas of development, purchasing and marketing, it will be necessary to further concentrate power in the hands of [Sir Howard] and unless this is achieved we believe [Sony] will be unable to close the gap with competitors such as Apple and Nintendo."
UPDATE: Sony Japan has denied the report, with spokesman Atsuo Omagari stating to Reuters, "We do not plan to announce additional restructuring measures at this time. We don't have any such plan."
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Wow, i hope this place doesn't turn into RLLMUK i.e. the worst forum on the net!
What is up with this hate? Again anti SONY in a SONY only thread... Its getting annoying. Go to the kid forums and do that... leave this for simple news reading!
I'm sick of this anti-sony nonsense as well. You can't go on a gaming site these days without some idiot bickering shite about a certain electronics company.
I seriously doubt any of this restucturing will even come close to the Playstation division exspecially since the PS1 and 2 were the most profitable technologies Sony has ever had and they plan from wut I read to expect the same thing from the PS3 in the long run, I guess we'll see though.
A 400% increase over an incredibly low number, is not that impressive! That's pathetic considering it's the first full year that BluRay has had zero competition in the physical HDef space. With our economy what it is, I bet next year you'll see an equally dismal increase.
Sony aren't the only firm cutting costs. MS are doing it too.
http://www.mcvuk.com/news/32809/Microsoft-to-see-thousands-of-redundanci...
As for Blu-ray it's seen a 400% rise from last year. So that technology won't be made redundant.
http://www.mcvuk.com/news/32807/Blu-ray-sales-boast-strong-gains
The only firm doing well this gen is Nintendo and kudos to them for having the balls to try something different.
Do you know if Sony gets licensing fees for the players or the movies themselves (or both)?
The news that BluRay had that good of an increase in sales only makes me wonder even more that if Sony only gets revenue from 3rd party BluRay player profits, maybe that is a much better revenue stream as a whole when compared to their bottom line in the games division. If they get $$ from the BluRay discs that are sold as well, it would be stupid of them to stop making PS3s as they no doubt boost BluRay penetration more than any other BluRay player (I would guess).
My question is with BluRay, I know Sony was involved in the development of BluRay but how does that work with licensing fees? Does Sony make a percentage of every BluRay player sold and/or ever BluRay disc sold? Isn't the advantage of developing something like that the revenue created by licensing? And if so, would it be more cost effective for Sony to (hypothetically speaking) pull the plug on the money losing PS3 hardware itself and just rely on the licensing fees? Or is the PS3 selling in the millions just adding to the overall BluRay player market penetration which would naturally lead to more BluRay discs being sold? I guess if Sony makes money on every BluRay DISC sold it would seem the PS3 is only helping immensely, but if Sony only makes money off fees solely from the players (3rd party, Samsung, Panasonic, Sylvania, etc), it seems they wouldn't need to worry about the burden of the cost of making the players themselves (or at least one that is a gaming machine thus costing more to produce) and as I said before just make money from fees from competitor's/partner's player fees.
If someone is more knowledgeable in this area (actually knows, not just thinks) please shed some light on this as I think with the economic climate the way it is and Sony in the shits they way they SEEM to be maybe they'd consider such a move (dumping the PS3) if a division has been in the red for so long. As many of the readers on this site have already said, some feel Sony has a very strong 1st party lineup and strong in-house development, maybe making money on strong software for...dare I say it, MS or Nintendo they could make money off software and licensing fees without the cost burden of producing money sucking consoles? I honestly don't think that'd happen with the PS3, but it wouldn't be the first time a console manufacturer switched to just doing software.
Nobody "really" knows what divisions will be terminated? So i won't even begin to speculate.
As doomed I pick:
Cellphones, Walkman, navigation, non-PS3 BluRay players, DVD Players, car audio, low price HiFi and Vaio media centers (can be done by PS3 or PS3 based platform), maybe even Vaio laptops.
Safe Zone:
PS3, LCD TVs, all sorts of cameras.
Rebirth:
Single portable video cellphone, MP3, PSP, navigation device. Challenge iPhone with a Mylo 2.0 convergence of all those other "almost purchases".
Collateral:
Marketing departments and assembly workers.
Interesting predictions. What about audio receivers (DD5.1, DTS, DTS-ES 6.1, DD-HD, DTS-HD), speakers? I'm not sure if Sony has produced an HD compatible (not just HDMI, but DD-DH/DTS-HD) audio receiver but I'd think the audio receiver department could get the axe, too (or not).
My guess is, Sony will do to each department, the thing they did to their TV department. Cut down anything behind the technological curve. Eliminate the low price segment if the profits per unit are too low. Don't throw 10 receivers on the market, concentrate on one. Focus on the segment Sony is actually renowned for. Quality electronics with a high, yet okay price.
How else would they ever be able to cut 16.000 jobs? They have to remove whole market segments, not just products.
In a nutshell, one lineup for the ideal Sony household. The Bravia TV, the PS3 with digital TV and HDD recording, the Mylo 2.0 for navigation, cellphone, PsP, mp3, social networking, the one receiver and the one 9.1 cubic surround BS box system. Videocameras and digital cameras still sold separately, everything linked up to the the PSN store for HD videorentals, music and games. At best, a price optimized and a luxury version of all that, but no more 10 of each in price segments $30 apart. THIS would be living. No more pink laptops and cheap stereo systems for teenage rooms made in China.