Sony to slay "sacred cows" for cost-cuttings?

[WastedJoker]

UK newspaper The Times reports today that radical corporate upheaval is coming to Sony.

Long-overdue cost-cutting moves will, according to company sources, result in "sacred cow-slaying measures" that will "will abolish or fundamentally alter many of Sony's long-established business practices."

The reorganization will likely be made public following CES in Las Vegas. The massive trade show ends on January 11th.

Could the PlayStation hardware business get the chop?

That's hard to say, but the PS3 has been bleeding money since it launched in November, 2006 and the PSP is struggling as well. One ominous sign: there is talk of a shift that would turn Sony from a manufacturing to a content-driven business model.

PS3 manufacturing costs have generated huge losses for Sony over the past two years. Content would include games, of course, but Sony also has a stake in movies and music. If the company judges its console business as too costly to continue, it could decide to pursue a system-agnostic approach like the one adopted by Sega after it abandoned the Dreamcast in 2001. Ironically, back then it was Sony's PlayStation 2 which steamrolled the well-regared Sega console.

Alternately, the PlayStation business might be salvaged in whole or in part and manufacturing cuts could be made on the consumer electronics side of Sony's house.

In any case, we should know more next week. In the meantime, PlayStation 3 fanboys may suffer a few sleepless nights as they worry about the future of their system.

Sauce: http://www.gamepolitics.com/2009/01/05/quo...tation-jeopardy & http://business.timesonline.co.uk/tol/busi...icle5446963.ece

Not sure how valid this is since I'm pretty sure the PS3's just started making Sony some decent profits recently as opposed to losses?

[+Audioboxer Subscriber²]

Sony have already denied any more cuts

Sony Denies Report of Further Restructuring

Sony(SNE Quote - Cramer on SNE - Stock Picks) said it has no plans to announce additional restructuring actions, denying a report that says the company plans a big corporate upheaval that could see job cuts and sweeping changes to management and manufacturing processes.

Company sources told the Times of London that operations across the electronics company are braced for a series of "sacred cow-slaying" measures that they believe will abolish or fundamentally alter many of Sony's long-established business practices.

The report said the restructuring at Sony is likely to be announced after the Consumer Electronics Show in Las Vegas in January. Most of the changes will occur at Sony's domestic Japanese operations in the form of factory closings and the abolition of several major divisions.

However, Bloomberg reports Monday that Sony has no plans to announce any additional reorganization beyond the job cuts and plant closures it unveiled in December.

"We announced the restructuring of the electronics business last month," said Sony spokesman Atsuo Omagari, Bloomberg reports. "We are not planning to announce further restructuring at this time."

Source: http://www.thestreet.com/story/10455917/1/...cm_ven=GOOGLEFI

This console wars crap is really starting to grate my nerves.

Oh look, MS are rumoured to be cutting 17% of staff, better somehow relate that to the 360 and post it on a gaming website.

[kyro]

sony haters . ps3haters have some thread to puke their hate out now. nothing else .

[+virtorio MVC]

Sounds like a load of bollocks to me.

[HTF]

Oh look, MS are rumoured to be cutting 17% of staff, better somehow relate that to the 360 and post it on a gaming website.

lol.

i guess some people don't realize that sony does sell other products other than the playstation.

just seems silly to me.

[Fourjays Veteran]

One of the articles that I read about Sony today said that they are losing money on their TVs too, which surprised me. I don't think Sony are about to pull out of either TVs or Playstation, but if the basis for this supposed "pulling out" was to be losses alone, then Sony might as well just give up altogether.

Edit: Was in the Reuters article on it.

[+Audioboxer Subscriber²]

One of the articles that I read about Sony today said that they are losing money on their TVs too, which surprised me. I don't think Sony are about to pull out of either TVs or Playstation, but if the basis for this supposed "pulling out" was to be losses alone, then Sony might as well just give up altogether.

Edit: Was in the Reuters article on it.

They'll be losing revenue in the TV industry (compared to previous months/years) due to sales dipping from the credit crunch (TVs are a large investment), but they won't be losing money on their TVs in terms of how they lose it on the PS3.

TV manufacturing prices haven't suddenly shot up over the last few months or anything.

All of these remarks are valid studies of what the crunch is doing to corporations, but the irrational grabbing at assumptions like

Could the PlayStation hardware business get the chop?

and/or everyone thinking Sony will pull the plug on their gaming division are just silly.

If anything was to be plugged, it would be things like the walkman which has practically no marketshare (Sony keeping it going for historic reasons).

The gaming division will be one of the biggest profit earners in the long run and always has been. It's the PS3 that has massacred revenue right now, not the actual gaming division as a whole - The PS2 and PSP are happily raking in profits, as well as software sold.

Profits are higher than losses also for said division, as each fiscal year the overall loss has decreased.

New gaming hardware always does that though at the start, it's heavier hitting for Sony this generation due to Blu Ray going into the PS3, but the upside of that was always going to be winning the HD war which benefits Sony movie studios/hardware tied to Blu Ray.

We're probably going to see more lost jobs/cost cutting measures, but like I said above it drives me nuts when gaming websites take these articles and somehow try to impose doom on consoles to incite console wars.

Such prestigious and important pieces of hardware such as the consoles and gaming divisions themselves won't be going anywhere for neither MS or Sony (both seemingly having to cut jobs and cost cut). Nintendo is still printing money though :p

Apparently these are earnings figures for the divisions

	  Sony			Nintendo		 Microsoft		   Industry
Y/E 1998	 $902,811,090   $1,023,333,867					  $1,926,144,957
Y/E 1999   $1,102,563,557   $1,301,350,000					  $2,403,913,557
Y/E 2000	 $722,738,949   $1,368,207,547					  $2,090,946,497
Y/E 2001	-$449,776,290	 $677,576,000						$227,799,710
Y/E 2002	 $629,101,056	 $895,872,180   -$1,135,000,000	  $389,973,237
Y/E 2003	 $935,569,253	 $834,333,333   -$1,191,000,000	  $578,902,586
Y/E 2004	 $627,195,212	 $993,161,303   -$1,337,000,000	  $283,356,515
Y/E 2005	 $419,888,799   $1,056,056,202	 -$539,000,000	  $936,945,001
Y/E 2006	  $69,129,058	 $774,478,055   -$1,339,000,000	 -$495,392,887
Y/E 2007  -$1,970,923,859   $1,914,666,388   -$1,969,000,000   -$2,025,257,471
Y/E 2008  -$1,079,994,103   $4,322,637,887	  $426,000,000	$3,668,643,783

Y/E 09Q1	  $51,113,208   $1,124,452,830	  $178,000,000	$1,353,566,038
Y/E 09Q2	-$379,471,154   $1,278,759,615		

Total				
	   $1,579,944,775  $17,564,885,209   -$6,906,000,000   $11,339,541,523

Full Year Average
		 $173,482,066   $1,378,333,888   -$1,012,000,000	  $907,815,953

Profitable Years				
			8		11		   1			 9

Non Profitable Years				
			3		 0		   6			 2

Average in Loss Year				
	  -$1,166,898,084		   N/A   -$1,251,666,667   -$1,260,325,179

Average in Profit Year				
		 $676,124,622   $1,378,333,888	  $426,000,000	$1,389,625,094

Source: http://www.neogaf.com/forum/showthread.php...42#post13448142

That's just to show, while there is losses, these divisions are very profitable, amongst all the other brand benefits of being involved in gaming.

[kyro]

well audioboxer , we need to realize the reality here, there are more Anti ps3 ppl among vocal gamers (vocally on internets) than Anti Xbox users (even when it massively fails and slams lots of proprietary stuff and goes anti-linux)

specially the guys in USA are very anti ps3, even check the board here, many anti ps3 posts and posters are allowed even when they are openly trolling even if they label it as open discussion.

I think we need to get thick skinned and get used to this "Death to PS3" chants we will keep hearing.

[Rookas]

well audioboxer , we need to realize the reality here, there are more Anti ps3 ppl among vocal gamers (vocally on internets) than Anti Xbox users (even when it massively fails and slams lots of proprietary stuff and goes anti-linux)

specially the guys in USA are very anti ps3, even check the board here, many anti ps3 posts and posters are allowed even when they are openly trolling even if they label it as open discussion.

I think we need to get thick skinned and get used to this "Death to PS3" chants we will keep hearing.

I've always seen it as the other way around, it seems like the Sony crowd has nothing but hatred for Microsoft and the xbox whereas the 360 crowd is just indifferent. Regardless, I'd hate to see anything happen to either console. While everyone yells about who will win the console war the real winner is always the consumer.

[kyro]

just saw this in my local newpaper, ( i read online epaper version)

[Elessar]

The PS3 will breakeven in 2009, and with proper cost-cutting Sony could even turn a profit on the PS3 near the end of 2009. Add to the the fact that the PS2 and PSP are both MAKING Sony money and i see no reason for Sony to cut the PlayStation division. I don't think it's even been considered, honestly.

[rajputwarrior]

:s who knows what will happen, could you imagine they killed their gaming division? (i know it's prolly bs)

[The Teej]

For a second there I thought they were literally going to slay sacred cows to advertise a game (like what they did with that poor goat). I was thinking "Well, that won't go down well with the Indian audience" :laugh:

[Mr. Gibs]

For a second there I thought they were literally going to slay sacred cows to advertise a game (like what they did with that poor goat). I was thinking "Well, that won't go down well with the Indian audience" :laugh:

LOL I thought along similar lines.

I was like how will slaying cows save costs? Unless sony now owns a farm or something and they plan to enter the meat industry.

Sony Beef

Like.No.Other

[The Teej]

LOL I thought along similar lines.

I was like how will slaying cows save costs? Unless sony now owns a farm or something and they plan to enter the meat industry.

Sony Beef

Like.No.Other

Live in your world, eat in ours?

Don't underestimate the taste of the beef?

This is eating?

:rofl:

[Ci7]

LOL I thought along similar lines.

I was like how will slaying cows save costs? Unless sony now owns a farm or something and they plan to enter the meat industry.

Sony Beef

Like.No.Other

:D

nah i prefer

MS chicken crispy !, ms buyed out 90% of KFC in year 2050

much better haha

:rofl:

the title is a bit wiard anyway