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Sony On Economic Condition: "We Simply Have To Suffer A Little"

In these economic conditions, everyone is feeling the strain. Sony, a company that just reported its first operating loss in 14 years, isn't exempt from the strife. However, SCEE president David Reeves says that, despite being forced to "suffer a little," everything is going "according to plan" in regards to the PlayStation 3.

In a recent interview with UK publication The Guardian, Reeves spoke about the PlayStation brand's current position, and alluded to the poor holiday season that saw the PS3 bring up the rear once again. In response, Reeves had this to say:

"We simply have to suffer a little; go down in market share and mind-share. It's like Ali v Foreman - go eight or nine rounds and let him punch himself out. We're still standing, we're still profitable and there's a lot of fight in us. I don't say we will land a knockout blow, but we're there and we're fighting."

When Sony posted their $3 billion loss in their 2008 financials, some became concerned that cuts would be seen on the PlayStation front. Instead, Sony opted to lay off 30% of their HDTV work force and shut down six manufacturing plants in Japan; the gaming division, which managed to turn a small profit, remained mostly untouched. And Reeves knows why:

"My objective is financial - to make a profit in our territory by the end of March, and we will. Our priority has always been the PS3; the forecast was 10m at the beginning of the year and it's still 10m. If we'd cut the price, lost another billion dollars, we might have had a huge Christmas but it would have been followed by a huge loss. The company could have thought: 'Hmm, I'm not sure I want to be in this business at all.' But we've shown Sony this is still a good business to have."

Of course, because Reeves mentioned the price, it became a topic of conversation. The PlayStation 3 remains the most expensive console on the market, and although Reeves admits that consumers would certainly respond to a lower price in these tough times, he says they still make a profit and that's what ultimately matters. "Admittedly, in the current climate, more people will go for the lower price, but we still make a profit and that is our objective." And in the end, Reeves is confident that the PS3 is in just the right position, despite all the global difficulties.

"We took our cuts in 07 and 08, we restructured and streamlined and we're as lean, as mean as we can be. I have seen no plans to cut jobs and it wouldn't be productive to do so. We're always looking at ways to reduce costs, replacing the current 65 nanometre Cell chip with a 45 nanometre one probably in middle of year. But will it be anything as off-strategy as releasing a PS3 with a DVD rather than a Blu-ray drive? I doubt it."

2/5/2009 Ben Dutka

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Comments (17 posts)

Ewillis911
Thursday, February 05, 2009 @ 10:52:36 AM
Reply

Sorry guys this is off topic but the killzone 2 demo is on the euro store now, figured everyone wants to know that.

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wano
Thursday, February 05, 2009 @ 10:52:50 AM
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demo is on psn guys..........sorry Ben, just delete this coment later.

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ShooPooMagoo
Thursday, February 05, 2009 @ 10:55:35 AM
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Sony has been kicking around since the 50's. It's a mature established corporaton. I think they have a good idea how to run their business and have come through recessions before.

BTW Ben, the KZ2 demo is now live here in the UK! Mine's coming down now!

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noshownogo
Thursday, February 05, 2009 @ 10:57:59 AM
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Time to create a Euro acct :) Can't wait three more weeks for the game...

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Ben Dutka PSXE [Administrator]
Thursday, February 05, 2009 @ 11:02:49 AM
Reply

Geeez, give me half a second to write it. LOL

The KZ2 pre-order/demo story is up. Put these comments in there. :)

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isaya85
Thursday, February 05, 2009 @ 11:39:55 AM
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I'm sure they'll price cut later this year once they've made a good enough profit, what I don't understand is why the PS3 is still $399 if the price of the blu-ray player dropped to $150 why is PS3 still so high I mean if the blu-ray player inside the PS3 was the most expensive part it should have came down in price with the other blu-ray players?? I don't know


PSN ID Biggest_GMoney

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coverton341
Thursday, February 05, 2009 @ 12:08:03 PM
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So I am wondering how some people say that Sony is broke and a sinking ship and all their money is gone from the PS2 days and blah blah blah blah...........

If this is the first year in 14 years that they are showing operating losses?

I mean we all have heard it over and over. "Sony's money is all gone because they squandered it all on R&D for the PS3"

But how can that technically be true if they have been making money for 14 years straight and they are just posting losses in an economic climate where everyone is losing money even little kids that are opening Lemonade stands are not turning a profit because the cost of lemons and sugar are outweighing the sells figures they make from a cup of lemonade?

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NightHawk17
Thursday, February 05, 2009 @ 1:03:57 PM

Coverton your crazy, lol kids in lemonade stands losing money

Last edited by NightHawk17 on 2/5/2009 1:04:06 PM

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coverton341
Thursday, February 05, 2009 @ 1:07:44 PM

Times are getting rough dude. I saw four 8-year-olds holding up an ice cream truck yesterday. If the economy doesn't get better soon then we are all in trouble

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NightHawk17
Thursday, February 05, 2009 @ 1:20:28 PM

LOL, holding the ice cream truck these kids are getting worse...i just hope it summer or hot wherever you live cause ice cream trucks and winter don't mix

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coverton341
Thursday, February 05, 2009 @ 2:03:01 PM

It's always summer in California.

EDIT:
Sorry strike that. It is always summer in California unless El Nino is heading our way.

Last edited by coverton341 on 2/5/2009 2:03:48 PM

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keaton
Thursday, February 05, 2009 @ 4:35:08 PM

well i saw some kids here selling shots on the street at night time, i wasn't sure what was going on but they seem to be doing what it takes to keep the money rolling in

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atomaweapon
Thursday, February 05, 2009 @ 3:17:58 PM
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299 would be a nice sweet spot. And add back BC for pete's sake!

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Joe_III
Thursday, February 05, 2009 @ 3:39:15 PM

I don't see how their margins would really get hurt that much if they offer a couple of early in house games with the console. RFOM/Heavenly Sword sales must be down by now. Why not bundle those into the 399 price? that would generate a good number of sales most likely.

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bamf
Thursday, February 05, 2009 @ 6:26:35 PM
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I always thought that their HDTV division was doing great and that bravias were the number one selling TV's in NA, after playing catch up to companies lilke Samsung? I must of read it wrong.

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Scarecrow
Thursday, February 05, 2009 @ 8:12:11 PM
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Hey all companies are hurting
Even Microsoft lol....

Anyway good to see them keeping the v-game division intact since it's the one which makes them a lot of money.

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BikerSaint
Friday, February 06, 2009 @ 4:00:21 PM
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It takes a lot of guts for Sony to come out and admit to having problems(what other company has said the same too????NONE!!!!).

At least Sony's willing to take corrective measures to make them rise to the top,(like nice block of slow churned butter), LOL

Anyway, just wanted to say "Thanks Sony", I know you'll always be there for us!
(but bring back B/C to "all" consoles, dammit!)

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