Sony Restructuring Plans Coming Soon, PlayStation Benefits?

By now, we all know about Sony's corporate troubles, as they're expected to announce their first operating loss in 14 years. There have also been much talk regarding a serious internal restructuring, which has the stockholders a little concerned.

But in the latest update provided by Reuters and The Financial Times, it appears that the PlayStation brand and video game division may actually benefit from this upheaval. The current report is that Sony CEO Howard Stringer is battling the "old guard" in Japan to shift the company's focus to software. Obviously, there's more to Stringer's plan, but perhaps he's not the biggest fan of continuing to support other pieces of electronic hardware, and would rather focus on both PlayStation and Sony Computer Entertainment, two divisions which appear to be gaining momentum. Previously, it had been reported that major internal strife between the regional Sony branches (North America, Europe and Japan) has been a problem, and Stringer appears to be railing against certain Japanese management with entrenched business positions that are difficult to alter. But at the same time, something must be done, as this restructuring is long overdue according to most analysts. We're not analysts, but just looking at this from an outsider point of view, we'd want to keep our company's focus on the industries that - for the most part - seem to be resisting the recession.

So far, one such industry is most certainly video games. Nothing is really "flourishing" right now, but the industry is certainly standing stoic in the face of the ailing economy, and some other entertainment industries are way, way down. Therefore, as Stringer may be hinting at, why not switch the focus a little to the products that appear to be on the upswing...?

1/21/2009 Ben Dutka

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Comments (50 posts)

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coverton341
Wednesday, January 21, 2009 @ 11:19:47 AM
Reply

When times are bad people tend to go out less eating and watching movies and tend to stay in more watching DVD's and Blu-Rays and yes playing video games a bit more than when times are good. When times are bad people like to do a bit of escapism from the daily uphill climb and I think it would be in Sony and a lot of other company's best interests to focus on that escapism media

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Frenchy17
Wednesday, January 21, 2009 @ 11:24:48 AM
Reply

I agree with Coverton, while gas prices were so high recently, I found myself not wanting to drive anywhere and instead staying home and watching movies and playing videogames.

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Orvisman
Wednesday, January 21, 2009 @ 1:09:26 PM

And now that gas prices are lower and the economy is in the toilet? Still not going out as much?

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King James
Wednesday, January 21, 2009 @ 2:16:52 PM

I know I'm not.

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Akuma07
Thursday, January 22, 2009 @ 5:36:41 AM

petrol prices in sydney were up to $1.80/litre

thats $6.80 (approx) per gallon

u get used to it.
for some reason i never care how much money i spend on petrol, but i whinge when i have to pay $10 to get into a club =S

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robinhood2010
Wednesday, January 21, 2009 @ 11:26:45 AM
Reply

i think most companies would benefit from restructuring right now. no company is benefitting right now, so anything that can help right now of course would be great.

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Tim Speed24
Wednesday, January 21, 2009 @ 11:34:23 AM
Reply

Coverton said it all. Video games seem to be recession proof. Very interesting.

By the way Software does sell the system and the PS3 is going to be around a long time yet. This is not a bad strategy for Sony, untill the economy gets better.

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Kingharris
Wednesday, January 21, 2009 @ 11:45:19 AM
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His requested name is Sir Howard Stringer.

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Akuma07
Thursday, January 22, 2009 @ 5:42:41 AM

he could be King Stringer for all i care.

so long as he helps our beloved Sony. and not hinders.

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vicious54
Wednesday, January 21, 2009 @ 11:52:46 AM
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I just want to keep the great games coming, so focusing on the software sounds great to me.

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Troy Powers
Wednesday, January 21, 2009 @ 12:23:18 PM
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I dunno. Sounds ominous. Xbots are gonna take this to mean Sony is going the way Sega did by getting out of hardware completely (as far as video games are concerned). I hope that's not what it means. Then again, even if they do, we've got plenty of time for them to change their minds and give us a PS4. Assuming it's not to late to start R&D.

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ec0li
Wednesday, January 21, 2009 @ 12:34:22 PM

One thing the Dreamcast never achieved was reach 20 mil consoles. I just can't believe that a customer base of that size can be ignored. After the restructuring, the gaming division should be fine.

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Ben Dutka PSXE [Administrator]
Wednesday, January 21, 2009 @ 12:57:38 PM

You don't have to worry about that. :)

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Wage SLAVES
Wednesday, January 21, 2009 @ 7:40:42 PM

The gaming division will be fine if they take Stringers advice. Ben you've said it yourself over and over, "software sells hardware".

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bamf
Saturday, January 24, 2009 @ 8:07:01 AM

Nintendo will disagree with you there.

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Joe_III
Wednesday, January 21, 2009 @ 12:46:23 PM
Reply

I dunno...I think that is a bad move...outside of the PS1/2 era, PS/SCE divisions are supported more by other areas of Sony rather than vice versa -- particularly now that PS2 sales are trending down as well.

Also, with DVDs still being the main source of entertainment, more people will be more cautious of which movies they buy on which media -- particularly since BR players play DVDs as well. Why pay $35 when you can pay $20 when picture isn't a big issue?

The only reason games haven't started the slump yet is that the majority -- a plurality at least -- of PS3/360 owners are over 18, and a large number of them still have the jobs that allowed them to purchase the consoles in the first place.

As the economic situation gets worse -- which is the most likely forecast for the next 9-12 months at the minimum -- more of the younger generations will be losing jobs while companies retain more experienced employees at a reduced cost.

That will mean that the younger employable demographic -- the ones currently driving sales on VG software -- will be losing their jobs more and unable to buy as many games per year.

That Sony needs restructuring is not in question -- especially since the past decade their priorities have been to screw customers, piss off the media, and make money. And usually in that exact order too.

Hopefully they will be able to bring out a number of good titles -- both VG and Blu-Ray -- as well as focus their R&D and marketing teams into products that not only fall in line more with their customers wants and needs, but have a price point to match too.

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Ben Dutka PSXE [Administrator]
Wednesday, January 21, 2009 @ 12:57:14 PM

This just has to be said: no company in the history of gaming has done more to screw over and piss off consumers than Microsoft.

Period.

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Orvisman
Wednesday, January 21, 2009 @ 1:12:58 PM

@ Ben, agreed!

@ Joe_III,

"As the economic situation gets worse -- which is the most likely forecast for the next 9-12 months at the minimum -- more of the younger generations will be losing jobs while companies retain more experienced employees at a reduced cost."

Ummm, barring a union being in place, most companies tend to lay off their more senior people and keep the younger employees because they make less money.

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ec0li
Wednesday, January 21, 2009 @ 1:15:41 PM

@Ben

What about f***ing VerizonWireless and their damn mandatory data plan on all PDA/Smartphones. Granted they have the best coverage but where I work and live, 90 percent of the time I get Wi-Fi. I pay for voice and unlimited texting and I sure as hell don't need to pay another 30 bones a month for something I won't need. WTF!

Oh yeah, I agree with you about Msft.

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coverton341
Wednesday, January 21, 2009 @ 2:46:46 PM

Orvisman is right in what he said about laying off the higher ups. My company is doing lay-offs as we speak and you know what divisions they are cutting? That's right the expensive ones like custom ASIC and prototype building. The divisions that have the highest paid employees and the ones with the most overhead to control. The lower end wage makes are now stuck with learning new skills that were just cut out and doing that job under a different title so they can be paid what they make now. It's bull nuts.

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Joe_III
Wednesday, January 21, 2009 @ 3:57:19 PM

@Orvis
That's usually the case for smaller recessions...But in larger ones like this -- which looks like it could trend to be the biggest since the Great Depression, things usually work backwards. Especially since in times like these the older generations are willing to work for the younger generations pay grade -- tenure gets to me a much smaller factor.

People start requiring more and more of their employees for hiring as well as employee retention. Back in the early 30's when the GD was going on, you needed a bachelor's degree to be an elevator operator -- you know, the person sitting there and pushing the buttons.

You will see the same happening soon with similar unskilled labor jobs unless The Chosen One (tm) fixes things soon.

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shindelion
Wednesday, January 21, 2009 @ 6:32:52 PM

Agreed big time.

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WorldEndsWithMe
Wednesday, January 21, 2009 @ 6:48:07 PM

The market went up today, let's hope that's the new trend.

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Wage SLAVES
Wednesday, January 21, 2009 @ 7:46:13 PM

At any rate Joe ya got a GOOD damn point. Sony's marketing scheme seemed to revolve around a healthy Economic environment. Really, everything is up to chance now. We are definitely headed into Globally dire times.

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jerocarson
Wednesday, January 21, 2009 @ 12:50:05 PM
Reply

all companies had a taste of the economic crises.
i m pretty sure we might also be seeing a restructuring form microsoft and more companies.

Barrack .H. Obama!

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King James
Wednesday, January 21, 2009 @ 2:13:14 PM

My President is BLACK, but his house is all WHITE!

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MirrorSoul
Wednesday, January 21, 2009 @ 3:11:57 PM

"My president is black.....MY LAMBO IS BLUE!!!"
lol love that song

Last edited by MirrorSoul on 1/21/2009 3:12:18 PM

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Wage SLAVES
Wednesday, January 21, 2009 @ 7:50:01 PM

I reserve my praise for good performance. Am I the only one that was shocked when he said we've got to "Spread the wealth"? Im excited about a change but not as far as socialism...

I guess the jackazz that just left office has me in a skeptical state. Skeptical is always healthy though.

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somethingrandom
Thursday, January 22, 2009 @ 12:39:47 AM

Anyone else realize that the name "Obama" is kinda like "Osama" (as in bin-laden)? And the middle name Hussein (hint: Saddam Hussein)? I laughed my ass off!

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PS3_Wizard
Friday, January 23, 2009 @ 8:35:09 AM

A yo MirrorSoul,

its more like "My President is Black, My Lambos blue"

you added a whole extra word (is)

sorry, its just a pet-peve of mine.

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city96
Wednesday, January 21, 2009 @ 12:52:01 PM
Reply

GOOD IDEA :)

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WorldEndsWithMe
Wednesday, January 21, 2009 @ 1:01:03 PM
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I'd like to get the inside scoop on this one, I wonder what entrenched Japanese business practices Stringer wants to uproot. Focusing more on software is a good idea since their hardware is already solid and they have the best in house games developers ever seen by the industry. So why not expand it if games are resisting the recession? That means more badass exclusives for us in the end, or at least ones that are even better quality. If 3rd party gomers wanna jump ship then it won't hurt PS3 as much.

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Gone
Wednesday, January 21, 2009 @ 1:09:41 PM
Reply

Sony needs to look back at how they worked with the PS1 and PS2 and not try to let Microsoft run their way of business. They should have kept the 60 GIG, like how they only had one version of the PS1 and PS2 (slimline included). A different SKU every 6 months just turns people off. Example 80gig $499 one month, 160gig $499 the other month. If I wait maybe I will end up with 320gig for $350 by summer time. Get back to your roots Sony!

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Orvisman
Wednesday, January 21, 2009 @ 1:13:43 PM

And pay for exclusives!

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King James
Wednesday, January 21, 2009 @ 2:23:47 PM

yea...NO!

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shindelion
Wednesday, January 21, 2009 @ 6:45:40 PM

What Sony also needs to do is to give us what they promise ASAP. Sony should not talk about a product, software or update and then take a year or two to deliver. Where are the PS1 and PS2 games on PSN? Omega Boost, Xenogears and other games should have been on the PSN from the launch of the PS3. Not a lot of games are uploaded. look at the Wii, old school games are upload almost every 3 months, same goes for the 360.

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ps92117
Wednesday, January 21, 2009 @ 1:51:27 PM
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Hopefully tvs & laptops stay, sony tv have always being the best, there laptops too. but anyway ps3 software seems great so I don't care bout it.

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King James
Wednesday, January 21, 2009 @ 2:12:21 PM
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Given how Sony hasn't posted a lose since the PS1, shouldn't everyone feel optimistic about Sony's future? I mean, history does repeat itself. A LOT.

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ec0li
Wednesday, January 21, 2009 @ 2:38:19 PM

I believe it was reported that they are going to post a 1.1 billion dollar loss at the end of their fiscal year. Their first loss in 14 years. Economy suxorz.

Last edited by ec0li on 1/21/2009 2:38:58 PM

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King James
Wednesday, January 21, 2009 @ 2:49:24 PM

yea a cool billion dollar loss. Sony can make that up this easily. As long as, they don't recall anymore products like last year.

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Wage SLAVES
Wednesday, January 21, 2009 @ 7:52:54 PM

That is a HEAP of cash. I don't know of too many companies that can take that in stride.

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Deadman
Wednesday, January 21, 2009 @ 3:06:55 PM
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It's way cheaper to go out and drop $60 on a game thats going to last you 2+ weeks depending on how you play or if the online multi is any good than to take your family/wife/girlfriend on a date to see a movie or go to dinner or any other experience thats only going to last 1-3 hrs. Its easy to see why sony is shifting focus and they got disc based and downloadable games to get out, now would be the time to get some more PS1 cassics on the network $5.99-$9.99 a game is just what some gamers need with stuff being the way it is I know I do.

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Ves
Wednesday, January 21, 2009 @ 4:50:54 PM
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I just hope he doesn't depend too much on software for his idea/plan to succeed.

This is probably the same resistance Phil Harrisson experienced before leaving.

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DarKn35s
Wednesday, January 21, 2009 @ 5:19:28 PM

Ves i think you maybe right!!!

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WorldEndsWithMe
Wednesday, January 21, 2009 @ 6:53:29 PM
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Some of you are saying they can make extra cash by just putting PS1 titles on the PSN, I thoroughly agree. People with a PS3, while most still own old PS1 games, just aren't likely to buy any except for second hand, but we are likely to buy up old ones for cheap on PSN. Even just putting a few "classics" on there each year is the biggest load of ballsweat I've ever seen. Half the library should be available by now, it wouldn't cost them much and sales would be great. So why don't they do this if they aren't making much money on the old titles anymore?

Last edited by WorldEndsWithMe on 1/21/2009 6:54:01 PM

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Wage SLAVES
Wednesday, January 21, 2009 @ 7:55:52 PM

Amen to that! I swear it can't be all that daunting since they used to fit on a regular CD!!! A lot of those games were classics and I'd love to play the original twisted metal. Even the first GT, I had mine cut like 3 times.

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Akuma07
Thursday, January 22, 2009 @ 5:49:14 AM

its funny. the old C&C on ps1 fit on a regular CD.

but the PSN version is almost 1gig...... -_-

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Qubex
Wednesday, January 21, 2009 @ 8:14:53 PM
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@WorldEndsWithMe

I think cheap $0.99 PS1 games would be a sure fire hit. They should start selling PS1 Platinum titles for a dollar or so; I am sure people will slowly build up their collection, even if they flog these PS1 games at $1.99 it would be good value... better than renting out a movie on the odd occasion; it makes people spend that little extra... add it all together and multiply by 5 to 10 million people making the odd purchase and you have a nice little earning there Sony...

Sony though still need to find the magic formula with Home... they need to do more and iron out the bugs... they should also - and I strongly suggest this - open up Home to the wider development community with tools support. I mean, if people want to model Home spaces or Community spaces why not! Why not let the community shape home physically to some extent - with guidance from Sony...

So much opportunity!

M!

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WorldEndsWithMe
Thursday, January 22, 2009 @ 12:00:55 AM

Yeah, Home needs some support, it may be Sony's baby but it needs to grow up fast.

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whooka
Thursday, January 22, 2009 @ 6:39:46 AM
Reply

As far as focusing more attention on the PSN, I do like the idea of downloading games at a lower price but I didn't spend $399 to play PS1 and PS2 games or even the higher end, HD, 'small' games they have on the PSN. I could've just kept going on my PS2 had I wanted that.

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