Can The Playstation 3 Save Sony?
After Sony announced job cuts for it's electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview with the BBC: "Sony doesn't have any core businesses that generate stable profits". But will the Playstation 3 save Sony?
Even though some people may point out that since the Playstation 3's release in 2006, the console hasn't actually been making a profit, and that is because of the simple fact that Sony are selling the console for less than it costs to make. And it's been like that ever since the release in 2006. Sony cut the price in an attempt to break into the market.
Although this may seem rather odd, Sony have used this tactic every time they release a console, even though the competition was tough, the did it with the Playstation 3.
Their plan is that they released a high specification console into the market at a loss, but because of the spec, the console will last many years, making them profit some years on. But will it prove to be successful this time? With high pressure price reductions of the Xbox 360, and the new market of the Nintendo Wii, will Sony manage to cope and make enough money to cover their losses?
The problem is that Sony will not reduce the price of the console until they begind to make a decent profit. However as the consoles price is alot higher than the other consoles on the market, they won't get a huge section of the overall console sales, which, in turn will cause them to loose money for longer.
Although all that sounds a bit bleak for Sony, there is one upside that they have, Blu-ray. It was lucky for them really that Blu-ray came out on top of the DVD battle. If HD DVD had won the battle, it could of turned out to be even worse for Sony as the Playstation 3 wouldn't have ahd any advantage over the competition.
So, at the moment, it's not looking good for Sony, also, with their release of their new online community, Playstation Home, already being shot down by Microsoft and EA. Both of them have said that Sony's attempt at a social community is outdate and not directed.
Aaron Greenberg, a manager at Xbox 360 game console division, stated: "When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.”.
Tom Hawkins stated: "I can't tell if they're going towards this mass market idea…or if they’re being lured into essentially trying to compete with Warcraft or Second Life”.
After Sony spent alot of time, money and effort on their new social community, it has just been shot down, personally, it just seems like an idea of earning money, there are several things within the world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm sure most gamers will hate the idea of being spammed with adverts as they walk around.
Overall, it's not looking good for Sony, they are relying on a Playstation 3 that is over priced to the consumer and under priced to the makers. Who knows where Sony will be if their console doesn't start to sell more.
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