Sony Set to Post First Annual Loss in 14 Years

[Isaac]

I really don't want to discuss failure and success with a bunch of Sony apologists.

[Hewson]

It doesn't matter. I was responding to mushashi's laughable point that the reason that MS is 2nd is because they've never innovated.

Live is one of the great cultural shifts in multiplayer gaming, dismissing it as anything else is being hugely reductive.

I totally agree that it is innovative and beautifully put together. But it isn't a great cultural shift. I know on here the huge numbers of online gamers makes it seem that way, but in the real world, the matchmaking, chat facilities and clan stuff don't actually matter all that much. It's a brilliant service for what increasingly looks like a niche hardcore market. I think the Wii is all the massmarket want from gaming online - a fallback option should there be no one around to play with and one which offers almost no possibility of kids being put in contact with anyone unknown. I understand that it's a bobbins service for those of us used to Live, but I think Live actually represents a massive over-investment in refining technology that only gamers really, really want.

[Stanley]

I really don't want to discuss failure and success with a bunch of Sony apologists.

Sony doesn't come into it.

[MK-1601]

Its got to be said that having played GOW on windows Vista i was seriously impressed by how it all set itself up but this doesn't change the fact that without consoles gaming would be massively complex and expensive for everyone.

So MS still need to make consoles.

12m+ people playing WoW and tens of millions playing The Sims series and Popcap's games beg to differ. Gaming is a commodity now.

MS would only 'need' to make consoles indefinitely if either of the following were still true:

1. The need to have a closed system as a copy protection method (no longer the case thanks to digital distribution and online activation).

2. The need for hardware to be heavily subsidised to allow the most profitable types of games to be supported.

They will get out of hardware manufacturing at the first opportunity they get. (Within two years of an 'entry level' PC - meaning very basic, with integrated graphics, etc - being comfortably able to run current X360 games.)

Live is one of the great cultural shifts in multiplayer gaming, dismissing it as anything else is being hugely reductive.

They'd really need to have more than maybe 1% of the total gaming population using it for this not to be hyperbole. It's a great technical achievement, but one that the Wii has put into perspective in terms of actual mainstream demand.

...

Anyway, the whole "have MS met their goals" question. Usually by this point someone has said something about a ten year plan. The problem is, it's now been 14 years since DirectX was proposed as a project to emulate the success of the Playstation 1. While they've convincingly succeeded in making Windows an attractive platform for games developers, it's clear they're not going to sell 100m+ consoles.

[Ryan]

Ifs, buts, and maybes are dirty words in business. If only Sega realised the importance of 3D sooner. If only Nintendo hadn't stuck with carts and a dated licensing/distribution model. If only they'd all seen the Wii coming. Anticipating the market is what all those heavily paid evangelists should do.

Microsoft seem to be forever playing catch up.

The evangelists are there to convince you to buy an product / buy into an system.

Analyst are there guess what the market's going to be. I assume.

[Stanley]

The evangelists are there to convince you to buy an product / buy into an system.

Analyst are there guess what the market's going to be. I assume.

Yeah I used the wrong word there.

[Troublegum]

Microsoft will never be number one in the console space without a BIG, BIG, BIG strategy change. They will have to abandon or, at the very least, really piss off their (hard) core user base, but I don’t think they have the balls to do it. The Halo/Gears of War reliance and the intimidating, competitive, antisocial online experience of Live are never going to pull in 100+ million sales, no matter how they try to repackage with Kung Fu Panda or Scene It.

[cantonarv]

Microsoft will never be number one in the console space without a BIG, BIG, BIG strategy change. They will have to abandon or, at the very least, really piss off their (hard) core user base, but I don’t think they have the balls to do it. The Halo/Gears of War reliance and the intimidating, competitive, antisocial online experience of Live are never going to pull in 100+ million sales, no matter how they try to repackage with Kung Fu Panda or Scene It.

Well then they are fucked - they obviously have no track record of improving their products or changing their strategy look how Netscape and Novell run the world, and they aren't exactly well know for having cash to spend are they ?

[Boyatsea]

Microsoft will never be number one in the console space without a BIG, BIG, BIG strategy change. They will have to abandon or, at the very least, really piss off their (hard) core user base, but I don’t think they have the balls to do it. The Halo/Gears of War reliance and the intimidating, competitive, antisocial online experience of Live are never going to pull in 100+ million sales, no matter how they try to repackage with Kung Fu Panda or Scene It.

Err, no.

The PlayStation and PS2 are the perfect examples of how you could appeal to more than one market at once. Final Fantasy to Buzz, Metal Gear to Singstar, Grand Theft Auto to Gradius.

[SeanR]

So, PS3 then. Fucked without a price-drop, isn't it.

[Lorfarius]

So, PS3 then. Fucked without a price-drop, isn't it.

I'm not even sure that would help at this stage.

[Grey Fox]

<<<<<DS = N64

I don't think this one really stands up. It's more like 2xSnes + a Playstation graphics chip. There's quite a lot in there. It isn't really very similar to N64. >>>>>>>

Fair enough I was guessing based on the number of N64 type ports (Mario 64x4, Diddy Kong Racing etc that deliver similar type graphics to N64 (to my untrained eye) but I am happy to admit I am wrong on this. Guess what I should have put was:

DS = 32/64 bit era standard on one screen, SNES on the other (or SNES on both if you prefer) :-) but I was on a roll.

I guess if we take the view that Sony are a hardware company that want to sell you cool technology and Nintendo are a software company that want to sell you cool games as stated by wiser men than I then it is difficult to place Microsoft. I guess you could argue they have a lot of experience in Networking and Online Delivery and this could be seen in Live?

[cantonarv]

So, PS3 then. Fucked without a price-drop, isn't it.

I dont like your new avatar SeanR!

<<<<<DS = N64

I don't think this one really stands up. It's more like 2xSnes + a Playstation graphics chip. There's quite a lot in there. It isn't really very similar to N64. >>>>>>>

Fair enough I was guessing based on the number of N64 type ports (Mario 64x4, Diddy Kong Racing etc that deliver similar type graphics to N64 (to my untrained eye) but I am happy to admit I am wrong on this. Guess what I should have put was:

DS = 32/64 bit era standard on one screen, SNES on the other (or SNES on both if you prefer) :-) but I was on a roll.

I guess if we take the view that Sony are a hardware company that want to sell you cool technology and Nintendo are a software company that want to sell you cool games as stated by wiser men than I then it is difficult to place Microsoft. I guess you could argue they have a lot of experience in Networking and Online Delivery and this could be seen in Live?

Well Sony are masters of content to be honest with their film and music divisions

[Troublegum]

Well then they are fucked - they obviously have no track record of improving their products or changing their strategy look how Netscape and Novell run the world, and they aren't exactly well know for having cash to spend are they ?

They have spent a load of money for a small console market share and no profit. I'm not saying they haven't done good work, they have, I own one for goodness sake. To succeed in winning the whole industry and the universe ala PS2 and Wii, though, they will have to change what Xbox stands for. That means less focus on Halo, hardcore pandering and call-centre headsets. Whatever Xbox stands for right now, it isn't enough to be loved by the magical 100 million strong mass market army. It's going to take a gutsy and maybe quite humiliating decision from Balmer, Bach or J Allard (is he still there?) if they really want to expand their business. If they continue on the same path they will find themselves joint second place forever.

People have short memories about the perception of PS1 and PS2, sure, now all the hardcore love them. The forums were full of 'casual/chav console' derision for the two in the early days from Edge to the wretched Gamesradar boards. The rest were all wanking over Halo or posting laughing smilies at the Gamecube's handle.

I like Master Chief and the lunch box design.

That Sony, though, eh!? They made an Xbox as well this time round, tsk.

[Lorfarius]

The Gamecube's handle is fantastic

Exactly. If the PS3 had an extendable handle it would make an ideal suitcase. Sony has learned nothing

[SPE]

Without Microsoft, you can bet that Sony wouldn't have even bothered sticking anything close to their lacklustre PSN in the PS3. PSN was a response to Live, Microsoft kickstarted the move towards online play. You can point at the Dreamcast, but it wasn't really the same as Live, nothing close to a unified online communication system.

Sony had been evangelising digital distribution and networking long before the first Xbox (even before the PS2), so PSN would have happened regardless of whether Live existed or not. The network adapter for the PS2 was released before the Xbox launched. Sony have no doubt been influenced by, and copied many of Live's functions. But MS didn't invent online console gaming or digital distribution.

[Lorfarius]

The network adapter for the PS2 was released before the Xbox launched. Sony have no doubt been influenced by, and copied many of Live's functions. But MS didn't invent online console gaming or digital distribution.

So? The DC had a built in modem and was out way before the PS2 netowrk adaptor that could even take a broadband adaptor.

[SPE]

So?

What do you mean 'So?'. I was responding to 'Microsoft kickstarted the move towards online play' which isn't true. Nintendo, Sega and Sony all got their first. It was a certainty that this gen would have a significant online component, due to the ever increasing uptake in broadband.

[Stanley]

So? The DC had a built in modem and was out way before the PS2 netowrk adaptor that could even take a broadband adaptor.

The point is that it was a model everyone would adopt at some point. Microsoft especially as their expertise is online systems. Live is the best at what it does but it wasn't exactly difficult for the competition to second guess.

[womblingfree]

DC had some great online titles and a browser and no one cared. Nintendo doesn't rely on online gaming and has the least graphical power. PS2 also had the least graphical power at the time. Cutting edge graphics and online play really aren't important to the mainstream.

I wouldn't be surprised to see the console format as it is today disappear altogether to be replaced by some netbook gaming thingies that just play Pop-Cap games. All the functionality of set-top boxes media centres like PS3 and 360 will probably be standard in TV's anyway, stuff like storing files, browsing and shopping for movies, games, music anyway. Live reminds me of early AOL portals in the way it ties you to a single community.

Of all todays console the one that feels the most like a development into something new for me is the DS. Might be a new era of bedroom coding just around the corner. Hope Edge start a POKES page.

[DCharlie]

With XNA there's bedroom coding as well

Even better, everything you need to code an XNA game is free and , more importanly, well supported (though everyone loves the DS, it's an amazing machine)

That Sony, though, eh!? They made an Xbox as well this time round, tsk.

that's what has been so shocking from out her in Japan. The PS3 has shifted to copy the new challenger and the heavy western focus in the early PS3 life has been a noted (bad) shift IMO.

It's gotten incredibly strange out here. The X360 has had a whole slew of JRPGs , then we get WKS on the PS3 and the advertising campaign is, basically, "IT'S AN RPG! .... ON THE PS3!!!"

Early pushes of Resistance, Motorstorm, Uncharted... it just doesn't strike me as very "old sony". It used to work well : Ps2 for Japanese titles, Xbox for western. But now it's all pretty much a wash and i'm down to X360 for pretty much everything, PS3 for a few exclusives and Bluray.

I'm not sure what sony can do to get themselves out of this : they need a drastic price cut and i don't think they've got the coffers to do it. Cutting the cost is going to increase their losses and i'm not sure Stringer will go that route.

[layten]

What do you mean 'So?'. I was responding to 'Microsoft kickstarted the move towards online play' which isn't true. Nintendo, Sega and Sony all got their first. It was a certainty that this gen would have a significant online component, due to the ever increasing uptake in broadband.

Do you honestly think that PSN would be as developed as it is without them seeing what Microsoft has done with Live? Others might have given us online gaming on a console before Microsoft did, but it was MS who picked up the baton and ran with it. Nintendo don't care, and Sony still cannot seem to copy obvious features from Live's initial showing on Xbox1.

It was only a certainty when Microsoft made it one of their big selling points, Sony needed to tick that box somehow themselves.

[Sprite Machine]

and Sony still cannot seem to copy obvious features from Live's initial showing on Xbox1.

Like what?

[Sng]

Global invites would be nice.

THE MOST IMPORTANT ONE!!!

[mushashi]

It doesn't matter. I was responding to mushashi's laughable point that the reason that MS is 2nd is because they've never innovated.

Live is one of the great cultural shifts in multiplayer gaming, dismissing it as anything else is being hugely reductive.

Some little company called Catapult Entertainment launched something which had a lot of the basic ideas behind XBL a long time before any of the majors got it into their head it was the future of console gaming, XBAND

Current XBL itself is an evolution of ideas from the previous generation Xbox and what exists on the PC.

[layten]

Some little company called Catapult Entertainment launched something which had a lot of the basic ideas behind XBL a long time before any of the majors got it into their head it was the future of console gaming, XBAND

Current XBL itself is an evolution of ideas from the previous generation Xbox and what exists on the PC.

wut?

Fine, if we are going to play this game, then Nintendo never innovated with the DS, as PDAs had pointer based games and the Wiimote is just a Gyration mouse.

Claiming that Microsoft did not innovate with Live is just churlish.

[MK-1601]

Claiming that Microsoft did not innovate with Live is just churlish.

A fair point - innovation is not the same as invention.

[mushashi]

innovate:

1. to introduce something new; make changes in anything established.

2. to introduce (something new) for or as if for the first time: to innovate a computer operating system.

3. Archaic. to alter.

Origin:

1540–50; < L innovātus ptp. of innovāre to renew, alter, equiv. to in- in- 2 + novātus (novā(re) to renew, v. deriv. of novus new + -tus ptp. suffix)

I should look at dictionaries more

Anyway, my original point, in reply to someone else was that Microsoft don't do much in the way of left field thinking, so will have a very hard time ever being #1 in this industry. bringing a more robust online gaming system to the console space ain't exactly setting the wider world on fire compared to the introduction of simple, accessible motion controls, is it? hence why they'll have trouble ever being #1, if that's the best thing they could come up with as a USP.

Sony's attempt at the portable gaming sector hasn't exactly resulted in global domination for them either versus the Dual Screen, they innovated by making a powerful portable multimedia machine which could surf the internet and other things, yet are getting crushed.

[layten]

I thought I would get use of that picture.

[RubberJohnny]

Sony to Announce Restructuring Details Soon

SONY, CONSUMER PRODUCTIONS, RESTRUCTURING,

Reuters | 21 Jan 2009 | 12:31 AM ET

Sony will announce details of its restructuring plan this week amid internal company resistance to job cuts in Japan, the Financial Times said on Wednesday.

The maker of Bravia LCD TVs, Cyber-shot digital cameras and PlayStation game consoles outlined plans last month that called for curbing investment, closing five to six plants and cutting 16,000 jobs to save $1.1 billion a year in costs.

But analysts and other industry watchers have said Sony will likely need more drastic measures to fight a crippling appreciation in the yen and a sharp slowdown in demand for electronics as the global recession spreads.

"Sony's not in a position to halt all domestic production but it has to do something that drastic," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. "If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive."

Sony earns more than three quarters of its revenues overseas.

In December, Sony said it would reduce headcount by 8,000 regular workers worldwide and by an equal number or more of contract workers.

But analysts say drastic measures at home would not only meet with stiff opposition from within the company, but also political resistance as well.

The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company's focus to software from hardware and cutting jobs in Japan.

Sony spokesman Atsuo Omagari declined to comment on the report.

Sony in October cut its annual operating profit forecast by 57 percent and said profit would fall further if the yen's strength persists.

A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years.

A stronger yen makes Japanese exports less price competitive and eats into overseas revenues when converted into the Japanese currency.

Copyright 2009 Reuters. Click for restrictions.