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Why Sony is Ready to Self Destruct
jammmma writes "Before even launching the PS3, Sony is ready to self destruct." From the article: "PS3 is doomed, thanks to Sony's ignorant attitude. None of us had the chance to seriously evaluate PS3 and the experience it has to offer. It's impossible without a series of titles and an official product at hand, but from where we stand, Sony's damaging attitude is all it takes to diminish the value of PS3. Kutaragi may be right in defending PS3; after all, he can't criticize his own product, but instead of exciting users with valuable features and winning them over so they can start saving, Kutaragi makes bearish statements in response to Nintendo's announcement and Microsoft's take on Sony. Last I heard companies were at E3 to impress media personnel, which yielded positive publicity, not make childish remarks when chances were against them."
SONY isn't ready to self-destruct, but it may be nearing the final disposition of its actions the past ten years including more and more proprietary technology, higher prices, and disdain for the customers.
Consider:
I don't know who's truly at the helm at SONY, but it's almost as if they've intentionally dug this hole, about six feet deep. I long ago eBay'ed and divested myself of all SONY equipment (still have SONY music CDs, sorry... ) and swore that, until SONY plays a little more nice, I'll never buy, recommend, anything SONY again.
I've never been a video game fan, so I don't know about SONY's escapades around those, but from what I see and hear it seems SONY is consistent across their offerings and markets.
So, it isn't SONY "ready to self-destruct", it's SONY reaping the rewards of what it's sown. It's too bad, they've shown they're capable of creating sophisticated and innovative new technologies.
provided it's at least 10 years old. The newer stuff just doesn't stand out from the fray very well, especially stereo-wise, since high-end companies are offering entry level equipment at prices competitive with practically any component system, even Sony.
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Unfortunately, they seem to be banking on the fact that people will think the PS3 is better and they'll dish out the extra money for it. Guess what? It's not. Sony isn't what it once was - Microsoft and Nintendo give it valid competition, and it's looking more and more like the Walkman-created giant is toppling.
It's nice to see that history hasn't taught them that the "We're the best, so people will like us no matter what!" attitude doesn't work too well.
Goo goo g'joob.
Honestly, if you had the choice between the PS3, Xbox 360, and Wii for your kids...well, I sure as hell wouldn't choose the one that costs more than the other two combined.
Goo goo g'joob.
Hmmm. While I do think that it is true that Nintendo won E3, based on all the blogs at Washington Post, Seattle Times, Seattle PI, and New York Times, as well as more typical ones on gamer sites, I don't know that, as an investor, I'd say that Sony killed themselves.
I would instead say that they missed an opportunity and need to rethink their marketing price points and possibly their game releases.
Sure, Microsoft (nope, don't own it, sold it to lock in a technical loss, and as of today don't own any of these companies) did manage to get the media to cover their GTA release on the xBox360 and most press never clued in that it is releasing on both the P3 and the 360.
Sure, Nintendo got all the buzz and those of us who really aren't into FPS very much are buying the Wii (hate the name). Heck, they even demo'd a really cool FPS or two, and Red Steel swordplay sold me on the controller more than even the fishing and driving demos.
But, in the end, if they pick themselves up, dust themselves off, reset the retail price for the non-crippled P3 to something reasonable - as in, less than $500 US and less than 500 EUs - then they can still regain the market.
Battles frequently can be won even with major setbacks - sure, Sony was routed at E3, but they've got six months to get their act in gear and learn from their mistakes.
-- Tigger warning: This post may contain tiggers! --
Because people on the internet hate them. I mean, just read any Slashdot article and you'll see. And just look at these cooltechzone.com people. They're clearly really cheesed off.
With the combined might of the Slashdot userbase and "cooltechzone.com" aligned against them, how can Sony possibly survive?
Sure Sony is run by a bunch of jackasses. Sure their PS3 product doesn't seem to match up to the current competition. Sure they're schizoid with regards to their music distribution, etc.
But they are not today, nor in the next 10 years, at all likely to "Self-destruct". This is a corporation, not a political party. They're not losing money at present, and if they pull off the PS3 thing well enough to set blu-ray as the new hd standard (who cares about the games?), their entire board of directors is going to spend the next decade snorting coke and gold dust off the asses of high priced prostitutes.
They're taking the long view in this situation, and I'll be surprised if we'll know how it worked out for a decade or more. The value of owning the dominant video standard cannot be overestimated.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
http://games.slashdot.org/comments.pl?sid=179036&c id=14837957
The problem with Sony is That the media division control the development division!
They can do thing that can eventualy and may be remove some little part of the profit of the media division !
So Sony will be in 5 (or lest) year a Media company only !(...)
Well if they don't change !
Ceci n'est pas une Signature !
Let's not forget video game history. The most recent example I can think of that's similar to what the PS3 is making itself out to be is the NeoGeo home system. The system was more expensive than its competitors (Genesis/SNES/TGX-16) and the games were up to $200. The system WAS higher quality. It DID bring the arcade experience home. But guess what? It was way more expensive than the competition and sold poorly (except as a coin-op machine).
I'm looking forward to seeing the PS3 in action on its release. And I'm wondering if the $600 price tag will stick for very long. It will be interesting to see what will happen. Will Sony get poor sales (at least initially)? I think so, but could be wrong. Will reducing the price of the system cost Sony a TON of money because of the major cut they will face at "giving" it away for less than it costs to manufacture, or will the adoption of the system and licensing fees balance it out and make the endeavor still profitable? It's tough to say, but if I was betting on this, I'd bet that Sony may have their first living room console flop.
It seems a lot of bad PR is coming up lately.
I'm not sure that spells the end of Sony in the video game arena, however. Anything can happen and Sony, as a whole, is not doing too shabby (yet).
Only time will tell...
Sony's philosophy of overpricing takes a toll with other items as well. For example, I find their computers vastly overpriced, thanks to their short lifespan. Unless you are producing a truly superior product, you shouldn't charge premium prices.
On the other hand, I'd like to mention one Sony product I fell in love with. A long time ago, I got one of their early Sony Clie PDAs. This was at a time before Sony realized they had a gem on their hands. The retail price of the Clie was $99; I guess they were selling it only as a platform for their memory sticks. I'm still using it on a daily basis, and I got a replacement unit, just in case.
Sony is not going to self-destruct because their console is priced high on release day, it was simply a tactical decision to attempt to capitalize on the willingness of their most eager fans to spend whatever it takes to get one on or near release day. Recall how with many console releases they can sell out the initial batches to the point where it is difficult to find one in a store for the first while? Sony is avoiding that by pricing their console higher on day one, they will make more money from the initial adopters and run less risk of selling out. THEN, when they have ramped up production and can produce more units at lower lost, then they will drop the price to a more reasonable level and all of a sudden the console looks a lot more affordable in comparison with the less-powered consoles from Nintendo and Microsoft.
At least that is the theory. It could easily backfire, as it seems to be doing judging by comments on this and other sites, by having a backlash against the initial price so strong that it actually turns people away from the console and onto the other platforms instead of them waiting for the price of the PS3 to drop as it inevitably will. But still, people are looking at this scene like it's all based on what happens in November and December of this year instead of looking at it like it's a multi-year game. In 1 year, in 2 years, in 3 -- the initial price of the PS3 will not be a big deal anymore.
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I don't think Sony is going to have nearly as big a problem with this generation of the console wars as people think. The entire American consumer system is based on a flawed precept anyway, and Sony is well-poised to take advantage of that.
It is expected that people will push their spending to match their income. This results in people with a lot more house than they need, a lot more car than they need, and so on. It's not uncommon for people working low-end jobs to have a new car that they can't actually afford, and sure as hell don't need (as an example, my brother works as a restaurant manager... he has a 2001 Honda something or other, with a $119/month car payment. One of his employees, a waitress, has just traded in her previous car, a 2004 something or other, because she couldn't afford the $379/month payment. Her solution: Get a 2006 something or other with a $325/month payment). This is, unfortunately, not the exception to the rule.
People will buy expensive stuff as a status symbol. How often have you been at some gathering of people (high school reunions are notorious) and heard people talking not about their kids, but about how much they spent on their boat? Doesn't matter that they're going to estate sales every weekend to stock their pantry (Sweet, 10 cents for a box of cereal, just because the guy who died opened it and had a bowl or two? I'm there!), they still have the status symbol of the boat, and their 3,000 square foot house, and their brand new H3.
It's soulless and evil to take advantage of that attitude, but Sony never claimed to be a church. And there are enough people out there who will buy the more expensive console for either the status symbol, or just to shut their kids up about the damn thing (you might be amazed how far that one will push parents... ever done a price-check on a Disney World vacation? Compare that with a run to DC to hit up the Smithsonian museums for a week). And hell, they don't even need the high market share they've enjoyed in the past... with that price point, they'll have outstanding revenues even if the number of units sold is only 30% of what the PS2 did.
As much as I hate to admit it (the side of me that co-owns a business is fighting with my pseudo-hippie minimalist personal life on this), my hat is off to Sony for this. I think they've found a capitalist's utopia for this cycle.
For those of you who can't be bothered to read TFA...
Unless their server can pick up its own pieces and reboot, that would be all of us.
"Everyone planning on getting one before the announcement will continue to do so".
Apparently you missed the thundering herd of people abandoning their PS3 plans in favor of Wii and Xbox 360.
Who is wearing the horse blinders again? Also I find it rather amusing that you write SONY with all caps.
I smell a plant.
"MILLIONS of blu-ray readers will already be in the clutches of PS3 owners. They'll get a next generation HD format with the bonus of a next-generation game machine."
Again, this is assuming that those MILLIONS actually want BluRay and PS3 at all, when they are tempted by competing products with much better prices.
Both HD-DVD and BluRay are a waste of time, but nonetheless, HD-DVD is already off to a big head start. The prices will drop faster than BluRay, and let's not forget that M$ has an add-on device for X360 which will still keep the price lower than PS3. Atleast with the X360 route you have a CHOICE whether to be flogged or not.
Let's also not forget that NEC backs HD-DVD while Sony backs BluRay. NEC is a true technology leader and pioneer, they will outweigh the cash-strapped Sony in this fight.
"They have a cool UI, online distribution, etc. But so will SONY."
Don't put the cart in front of the horse just yet. Sony has only announce plans, they don't have anything to show for it yet. If precedent is any indication, they will come up short against Xbox Live.
I would challenge that PS3 owners will own more games per console.
That's quite an assumption. For $600 people could get a Wii and 8 games, or an X360 with 6 games.
"The difference is that people with gaming PC's won't see much original (or better looking) content on a 360. They'll get unique titles on a PS3."
OK, by now it's obvious that you are a lunatic fanboy, or an astroturfer.
The unique games will be on Wii, not PS3. The best looking games will be on X360, as we learned from this E3. For all of Sony's hype, they won't be able to surpass X360, because X360 developers are a generation ahead and most Japanese devs haven't figured out how to use a pixel shader yet.
To be more specific, Nintendo has reported only 1 loss (partially due to the dollar-yen exchange) in 116+ years.
You're making the same mistake Sony is making. It's a game console, there's no excuse for it to cost six hundred bucks. It didn't work for Neo-Geo (which was by far the most powerful console in its day) and it won't work for the PS3. It'll work better than it did for the Neo-Geo, because it will have the shiny SONY emblem on it, but it's still going to hurt 'em, and bad.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Looking around at a lot of these posts, it seems even the basic facts aren't being referenced (just more alarmist articles from other sources). Let's get back to basics for a second.
from google finance
Sony (ADR)
2006 Revenue (USD): 67.53B
Net Profit Margin: 1.47%
2006 Employees: 152,700
Microsoft (MSFT)
2005 Revenue (USD): 39.79B
Net Profit Margin: 31.59%
2005 Employees: 61,000
What do these basic, high level overviews tell me?
Not much, really. I don't even know how revenue is calculated, and based on the posts I've seen, neither do you. It's okay. If you think the PS3 costs too much, that's fine. If you think Blu-Ray will fail, that's fine. But please, pretty please even, don't confuse your convictions with actual knowledge.
There are three kinds of ignorance: ignorance, abject ignorance, and quoting random statistics.
2 teraflops is the claim. And that's if all you do is run adds, subtracts, and multiplies all day with no flow control/branching, function calls, cache misses, pipeline stalls, or any of that other stuff that happens in "reality".
And reality has a well known anti-Sony bias.
I agree with the parent and grandparent's views as well. Sony always positioned itself as a "cutting-edge" premium brand, and priced itself accordingly. The difference between then and now was that in those days, Sony's products were THAT good that people were willing to pay even double for the brand.
We still have a Sony Trinitron television that is is over 10 years old but still runs as good as new. Those trinitron picture tubes were truly revolutionary and the quality of electronics that went in was excellent as well, which is why they still run like new and give the best of LCDs a run for their money. Looking at a product like that, i would gladly pay through my nose for it. The modern day equivalent would be, i guess, to drop $500 for a pair B&W (or equivalent) speakers, i guess.
The problem is, these companies end up suffering from hubris more often than not, and things get dramatically worse if say, they miss a couple of key innovations. Now, you have a company that's a little behind the technology curve, and is still pricing itself way more than the market. Perhaps, the company will ride on the strength of its brand for a few years but not for too long.
Intel is, i feel, in a very similar situation. Like Sony, it too considers itself not as a market competitor but as a market creator or as a visionary. Both these companies actually walked the talk for quite some time, but slid real bad when they missed a couple of key market signals. The only difference is that Intel has a sufficiently strong senior management to learn from its mistakes, or at least from the really horrible ones. It's really trying to turn itself around after it has got shafted in the backside with its NetBurst offerings. In fact, i predict that it will come back stronger than ever after it successfully ramps on Woodcrest, Conroe, and Merom. I'm not so sure if Sony ever will recover OTOH, but then i only say that with the stereotype of Japanese bureaucracy in mind.
Lastly, i see this growing trend of flaming or dissing companies like Sony or Intel. Remember, these might be giants poised to fall, but its only a very very lucky and nimble David that manages to beat a very dumb and complacent Goliath. Another thing is that these Goliaths have also been responsible for creating markets and pioneering technology. Give them some respect for that, at the very least. It's easy to leech off market share AFTER a market is created, but the pioneer at least deserves the credit for having the cojones to take the first step.