[bjmarchini]

I was reading this article on yahoo during dinner

Quote:
Could PlayStation get the axe?

Jan 5, 2009


Drastic cost-cutting is in Sony's future, and the games division could be one of the business lines on the chopping block.


That's the specter raised by a Times of London piece published Monday, which credits anonymous company sources with news that a massive restructuring program, beginning in a few weeks, will "abolish or fundamentally alter many of Sony's long-established business practices."


That doesn't necessarily mean the end of the PlayStation, but it's hard to see Sony quitting any of its major markets, PlayStation or otherwise. Can you imagine shopping for a TV without checking out the Bravia line, or for a laptop without looking at Vaio?


Although Sony's games division reported improving performance last year, it still lost over $400 million in the third quarter of 2008, and although the PS3 is the most expensive of the three major consoles, it's by far the costliest to produce. After a disappointing holiday season and the prospect of harder economic times on the horizon, could Sony's games division be contemplating a software-only future?

I am not a PS3 hater (Sony disliker maybe, but it is a well made unit). When I considered tearing down my HTPC, the PS3 seems like the best replacement for me as the storage is easily modified.


I couldn't help but wander what effect it would have on blu-ray and HDM overall.


Personally, I don't think it would have as much at this point. It is not like the PS3s out there will suddenly stop working. Furthermore, I don't know that the PS3 is even bought as much anymore just for BD with players dropping under $200 now.


Any thoughts?

 

[markrubin]

sounds like stuff that used to appear in the old rumors thread

 

[Richard Paul]



Quote:
Originally Posted by bjmarchini /forum/post/15488583


Any thoughts?

An improbable scenario but hypothetically speaking it wouldn't have much of an affect on Blu-ray now that there are $150 to $250 Blu-ray players being sold at retail stores.

 

[bjmarchini]



Quote:
Originally Posted by markrubin /forum/post/15488635


sounds like stuff that used to appear in the old rumors thread

I don't know. I got this from yahoo, not some no name webblog.


I was reading another story they had about their PSP. I always new the DS outsold. My kids each have one of those DS. (Those things are like crack for kids. I don't know how many times, I have to tell the one to put it down.) Apparrently, they sold just under 400K PSPs this december while the DS did over 1.5 million.


I read another article on yahoo the other week about how the PS3 is still by far in last place in its console war.


Their latest commercials seems to be pushing downloads on the PS3. Comes across as a "desperation, we can't sell it as a gaming console so lets try something else" tactic. I am not saying that it isn't, but for the most part it has been marketed as a game player first, bluray player second. Now they seem to be hedging on the HTPC type market more than they have.


Strangers things have happened in the gaming world. People never thought Atarii would get out of the gameing business. Remember Sega's chokehold with the Genesis?


For the most part, even Nintendo almost lost it if it wasn't for their dominance in the portable market and their re-emergence with the Wii.


Its important to remember that Sony is alot more than a game console maker. They have other division to concentrate on, not the least of which is their studio and record label.


I don't think the PS3 would get pulled anytime soon either. I think what has happened will definitely have an effect on their next console whenever that is released.

 

[jvillain]



Quote:
sounds like stuff that used to appear in the old rumors thread

No doubt. I fear you are going to wish you had locked this thread when you had the chance.

Quote:
Any thoughts?

The first one is there isn't any chance at all of this happening.


Next. Even if every thing shut down today all of the allready sold PS/3 players would still be out there. I guess people looking for some thing to use it for would have to buy movies once they ran out of games.


The big bang from the PS/3 was at the begging of the format war due to being able to provide a large number of players up front. The farther you get from there the less value the PS/3 has to BD. The reason being that the total number of standalones will soon dwarf the number of PS/3s.

 

[bjmarchini]



Quote:
Originally Posted by jvillain /forum/post/15488903


No doubt. I fear you are going to wish you had locked this thread when you had the chance.



The first one is there isn't any chance at all of this happening.


Next. Even if every thing shut down today all of the allready sold PS/3 players would still be out there. I guess people looking for some thing to use it for would have to buy movies once they ran out of games.


The big bang from the PS/3 was at the begging of the format war due to being able to provide a large number of players up front. The farther you get from there the less value the PS/3 has to BD. The reason being that the total number of standalones will soon dwarf the number of PS/3s.

I think it is a valid question. Makes you think about it. and their bigger question as well.


Which is, was it worth it to jeopardize their next gen console to push bluray?


I think we could all agree that the state of bluray would not be what it is today without the PS3. Until it came out, bluray players were not positioned at all to compete with HD DVD. The PS3 offered the most advance, most updateable player that has probably every been produced. But now that it is no longer the cheapest most complete product for BD, is it still needed?


If we would look at how much Sony has lost buy forcing bluray drive sales through its console, compared to how much they will revenue back in, would they still have followed this route?


------------


I know it is hard to ask these questions as sometimes people come in posting things just to discredit a format that they dislike. This is not one of those.

 

[cdoosc21]



Quote:
Originally Posted by bjmarchini /forum/post/15488962


I think it is a valid question. Makes you think about it. and their bigger question as well.


Which is, was it worth it to jeopardize their next gen console to push bluray?


I think we could all agree that the state of bluray would not be what it is today without the PS3. Until it came out, bluray players were not positioned at all to compete with HD DVD. The PS3 offered the most advance, most updateable player that has probably every been produced. But now that it is no longer the cheapest most complete product for BD, is it still needed?


If we would look at how much Sony has lost buy forcing bluray drive sales through its console, compared to how much they will revenue back in, would they still have followed this route?


------------


I know it is hard to ask these questions as sometimes people come in posting things just to discredit a format that they dislike. This is not one of those.

I think losing backward compatibility was the big mistake with the PS3. There are an unbelievable number of PS2 owners out there who are apparently satisfied enough with their old consoles at this price point. Backward compatibility allows you to replace your unit without losing the playability of all your games.


That said, I love my PS3 and hope it has a long future.

 

[bjmarchini]



Quote:
Originally Posted by cdoosc21 /forum/post/15489103


I think losing backward compatibility was the big mistake with the PS3. There are an unbelievable number of PS2 owners out there who are apparently satisfied enough with their old consoles at this price point. Backward compatibility allows you to replace your unit without losing the playability of all your games.


That said, I love my PS3 and hope it has a long future.

Do you know what their reasoning was with that? I heard a clerk telling a customer that the other day as a selling point for the pre-owned. Guess it was to save a few dollars. I think backwards compatibility was one its best selling points.

 

[jvillain]



Quote:
Do you know what their reasoning was with that?

Cutting costs.


I have yet to see any one provide any evidence that all of the cost of the PS/3 is contributable to the BD drive. If it was then the cost of the PS/3 would be half of what it was last year because the cost of the drives have plummeted. There is obviously more at play like the cell processor etc.

 

[rlsmith]

I don't expect this to happen. They are now just about profitable on the sales.


I do expect the prices to be dropped this spring on the PS3, which will reinvigorate sales.


Sales were going very nicely in 2008 until the XBox dropped its prices and the PS3 didn't follow suit. We will see this pattern repeat.


The fact that Blu-ray is included will continue to be a big plus for the PS3 as Blu-ray establishes itself. I still expect the XBox and possibly the Wii to have new models that include Blu-ray, just not yet.

 

[Bozster]

I think it's questionable how much PS2 backwards compatibility affected sales of PS3. I think not a lot.


I understand that a lot of people have PS2 games but overall when they get PS3 they intend to play new next gen games and they've already played the old ones.


For me personally it was important because there were a couple of titles I really wanted to replay over and over until next gen version is released. One of such titles/series is God of War that looks great upscaled to 1080p on PS3.


That's why I am happy I still have the original PS3 with full hardware compatibility but I imagine for a lot of people PS2 compatibilty shouldn't be a huge issue.

 

[Hughmc]

My belief, with a bias as an owner of two PS3's and familiarity with game systems and Sony's history, is if Sony pulled the PS3 at this point it would be close to pulling BD completely or getting rid of the SOny name. Sony has to much riding on the PS3 right now and it is set to be profitable on it in the early spring with cost cutting and price reductions on hardware. I just don't see it happening unless they want to give over a large share of the BD hardware market to competitors and give up what game sales they do have to MS and Nintendo. Another myth is that the PS3 is causing Sony's financial woes, but if one does the research they will find it is really the failing global economy and the falling yen that is really hurting Sony, but don't let anyone be fooled, Sony is not alone in this mess of an economy.

 

[bjmarchini]



Quote:
Originally Posted by Hughmc /forum/post/15489660


My belief, with a bias as an owner of two PS3's and familiarity with game systems and Sony's history, is if Sony pulled the PS3 at this point it would be close to pulling BD completely or getting rid of the SOny name. Sony has to much riding on the PS3 right now and it is set to be profitable on it in the early spring with cost cutting and price reductions on hardware. I just don't see it happening unless they want to give over a large share of the BD hardware market to competitors and give up what game sales they do have to MS and Nintendo. Another myth is that the PS3 is causing Sony's financial woes, but if one does the research they will find it is really the failing global economy and the falling yen that is really hurting Sony, but don't let anyone be fooled, Sony is not alone in this mess of an economy.

+1


Even Wii sales have dropped off some because of it. And the price scalpers aren't getting their premiums on ebay as much anymore.


I don't think it is the BD as much anymore that is costing them money. Alot of times, the actual units cost far less that what they claim as the cost. The "cost" they are usually using includes the R&D that was spent developing it.


Realistically, if you take the now non-state of the art GPU, not as impressive though still powerful cell and other items with it, it can't cost more than $300 to produce at most.


You can pick up a BD drive retail at newegg.com for

 

[miata]

This would really impact all those little companies making IR to blutooth converts for universal remotes.

 

[josephcoatar]

if the ps3 goes, i'm definitley buying a backup unit

 

[briankmonkey]



Quote:
Originally Posted by miata /forum/post/15491124


This would really impact all those little companies making IR to blutooth converts for universal remotes.

That would be like 4 people laid off in China!!

 

[vancouver]

I hope it doesnt happen, but in todays ecomonic situation it could. There have been bigger issues that have already come and gone world wide since Oct 2008 then sony chopping the PS3.

 

[kevivoe]

They should first sell all of their fab's to semiconductor companies. Then they should sell/spin off MGM and Columbia to allow a real studio to run that business.


Sony really is not a semiconductor fab OR a studio, they are a consumer electronics business.


I used the PS3 for 6 movie downloads but now have a Vudu on order. I have 2 games and about 20 blu-ray movies ... it's no big deal to me if they dissappear. I will add them to the VHS, HD DVD, CD and other boxes of formats I have in storage. Actually VHS tapes were trashed in our last move and we watch an HD DVD every now and then. Rare to even load a CD anymore.

 

[JBlacklow]



Quote:
Originally Posted by kevivoe /forum/post/15495234


They should first sell all of their fab's to semiconductor companies. Then they should sell/spin off MGM and Columbia to allow a real studio to run that business.


Sony really is not a semiconductor fab OR a studio, they are a consumer electronics business.

What's wrong with the studio? It seems to be doing at least as well as the others financially (although Warner and Universal got shellacked in 2008), and they're consistently at or near the top in PQ, AQ, and extras for Blu-ray. And since all their semiconductor business seems to be jointly owned, wouldn't that mean the others should pull out too?

 

[bjmarchini]



Quote:
Originally Posted by kevivoe /forum/post/15495234


They should first sell all of their fab's to semiconductor companies. Then they should sell/spin off MGM and Columbia to allow a real studio to run that business.


Sony really is not a semiconductor fab OR a studio, they are a consumer electronics business.


I used the PS3 for 6 movie downloads but now have a Vudu on order. I have 2 games and about 20 blu-ray movies ... it's no big deal to me if they dissappear. I will add them to the VHS, HD DVD, CD and other boxes of formats I have in storage. Actually VHS tapes were trashed in our last move and we watch an HD DVD every now and then. Rare to even load a CD anymore.

Seems to me that their studio is one of their few performing divisions right now. I think this is a strength.


The way I see it is that they got away from their core.


Sony used to own the portable music industry. Remember the walkman. I think it is too late to get back in on that.

Their laptops were always among the best and probably the closest thing to an apple on the PC platform, but their quality dropped from the reports that I have read. I know my brother has had nothing but problems with his Vaio and it is only 17 months old.

They made the tactical mistake in thinking the best hardware on a gaming platform = success. Furthermore, they were so confident of its success that they decided to try and force BD acceptance through it. They forgot about innovation. They also forgot what made their PS1 so successful... the games.

I really don't know enough about their display division so I won't comment on that.

It seems that the SA players they produce are very good, but almost more of an afterthought product. Especially the early ones.


We won't really know what the solutions until after they recover.


My guess is that they need to do this:

• Drop the PSP. Their is no way of overtaking the DS at this point or even coming close. It is unfathomable to me how they have sold 84 million of those worldwide so far. They have sold less than half that with the PSP.
• They need to make a decision on the PS3. Do they continue to keep it at the price point of $400 and continue to lose market share or do they continue to lose money by dropping the price of their unit.
• Continue promoting bluray. They have gone too far in on this one. They need to see it through.
• Make quality job 1 again throughout their company.

It seems that the safest bet for them is to push their display division. Would be the least volatile, I would think.