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Why Sony Should Ditch Everything But the PlayStation

An anonymous reader writes: A couple weeks ago, we were surprised by news that Sony was spinning off its game development studio. More recently, the company has been thinking about exiting both the mobile phone market and the TV market. An opinion piece suggests Sony shouldn't stop there, focusing more on the its PlayStation division and a few other areas — and giving up on the rest. "Continuing to concentrate on phones and other products actually makes the PlayStation experience worse for most people. Take the PS4's ability to stream games to mobile devices — a killer feature needlessly limited to the PS Vita and Sony's Xperia Android line. Why can't I play Destiny on my iPad when the TV's occupied? The iOS PlayStation app, meanwhile, is a confusing mess that hasn't even been updated for the iPhone 6. These sound like minor points, but imagine what Sony could do if everyone at the company were focused on making its most important product as good as possible. As Microsoft is learning with its recent iOS and Android experiments, you have to serve the customers where they already are."

22 of 188 comments (clear)

  1. Sony doesn't care for electronics for a reason. by BarbaraHudson · · Score: 2, Insightful

    Electronics are a low-margin business. Sony is making huge money from Sony Entertainment. Movies, licensing syndicated TV shows, music ... they don't need PlayStation.

    --
    "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
    1. Re:Sony doesn't care for electronics for a reason. by Aighearach · · Score: 5, Insightful

      The PlayStation isn't electronics business, it is in fact entertainment.

      Electronics is low margin because of commodity parts and consumer demand for interoperability. Think, microwaves and computers. You don't need a special brand of microwave to heat Packaged Dinner Product.

      Console gaming is not a commodity market at all. You can't buy a game and then play it on whatever console was on sale that week. There are no generics, and there is no interoperability. If a particular console has low margin, it means the company is trying to make money off the games. It won't be low margin when considered in total. Generally speaking, the lowest margin consoles are associated with the highest margin game divisions!

      As to TFS, what a load. Spinning stuff off doesn't change anything about the products, it changes the corporate accounting. The different departments already had their own bosses. The presumption that people are somehow "distracted" by the parent company employing people (often in totally different locations) to work on other products seems especially daft. If they spin off a division, none of the employees went anywhere, nobody is more or less distracted. Ownership doesn't even change; the parent company simply uses a different set of procedures to manage their subsidiary. If they were truly being distracted by owning both divisions, they'll be equally distracted owning the stock of the subsidiary, and they'll be just as able to mingle their efforts if they desire spaghetti.

      And if they shut down a division and sell off the product line, those employees all get laid off, except the few that get hired by whoever bought the bits and pieces. That doesn't reduce the distraction for the other departments at all.

      Honestly, if changing the corporate structure was as disruptive as pundits are hoping and fantasizing, they wouldn't be doing it. ;)

    2. Re:Sony doesn't care for electronics for a reason. by RubberDogBone · · Score: 2

      The ups and downs of movies and TVs can't be used, rationally, to support a company like Sony. Sony Pictures is only as good as their last blockbuster, or perhaps their next. But in between those are lots of films that lose money even before Hollywood Accounting(TM) takes over. There are no guarantees. And it only takes one or two expensive flop movies (and Hollywood is paved with the carcasses of such films) to ruin a studio.

      TV is the same: ratings, networks, fickle viewing habits make it very hard to look at TV series as a reliable and steady source of revenue. Some years might be good, but many will be bad.

      Sony got into making movies because they thought it would be cool to see the Sony Pictures logo before a movie you play on your Sony DVD player and watch on your Sony TV connected to your Sony home theater. It is cool for the executives. But nobody else ever gave a damn. And if nobody cares, why bother owning a movie studio?

      --
      Sig for hire.
  2. Oh boy by Pikoro · · Score: 2, Insightful

    Next 40 posts will be about /. users who haven't bought anything from Sony since the rootkit fiasco, but reserve the right to complain about Sony products anyways.

    --
    "Freedom in the USA is not the ability to do what you want. It is the ability to stop others from doing what THEY want"
    1. Re:Oh boy by zlives · · Score: 2

      a shitty product should be shat upon regardless of actually being smart enough to not pay for it.

  3. Sony should return to its roots by MpVpRb · · Score: 5, Insightful

    They should dump the "content" divisions..the movie studio and record company

    The "content" divisions crippled innovation by insisting that the first priority must be content restrictions

    They should shift their focus from style to substance

    The "style" advocates crippled innovation by insisting that the first priority must be fashion

    They should do whatever it takes to return to being the world's best electronics company

    1. Re:Sony should return to its roots by serbanp · · Score: 2

      unfortunately these times are gone and won't come back. Consumer electronics carry too low a margin and there are too few potential customers willing to pay for quality but expensive(r) products for Sony to go back to their roots.

    2. Re: Sony should return to its roots by sk999 · · Score: 2

      The real roots were tape recorders. Those were the first Sony (consumer) products I saw. Also, transistor radios. Next came portable (B&W) TV's - ones that would fit on a small table. My brother bought one and then invented the world's first remote control - it was a long stick with wooden attachment that let him change the channel while remaining in bed. Lazy SOB. I did have a Trinitron for a while, and while awesome for its time, it has long been shipped off to recycling.

    3. Re: Sony should return to its roots by TapeCutter · · Score: 2

      Yeah, I had a luggable trinitron that worked for 30+yrs, the only reason my daughter threw it out was because all the (Aussie) TV stations changed to the new frequency. Sony had a reputation for quality and innovation in the 70's & 80's but they pissed that away, I think the rot set in after their huge success with the walkman. They don't need to sell off the rest of the company's arms to fix that.

      --
      And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
    4. Re:Sony should return to its roots by Mitreya · · Score: 2

      They should dump the "content" divisions..the movie studio and record company

      So you are saying they should dump the high-margin division that thrives in the non-competitive, cartel-controlled market with imaginary losses (Hollywood accounting, anyone?)

      They should do whatever it takes to return to being the world's best electronics company

      ...and go back to focusing on low-margin division where they would have to face real competition and where all expenses and losses are, in fact, real and not made up?

      That sounds like an excellent plan.

    5. Re:Sony should return to its roots by thegarbz · · Score: 2

      They should do whatever it takes to return to being the world's best electronics company

      By selling off the division that makes them money and keeping the ones which don't?

      Clearly if you were CEO Sony wouldn't exist anymore with that kind of thinking.

  4. Fuck the playstation by dunkelfalke · · Score: 2, Informative

    TFA writer is seriously myopic thinking that his console is more important than anything else. It would be s shame for Sony - for sll their faults they still are a quite impressive manufacturer - to be reduced to a one trick pony. And for what? A bloody game console? Why would anyone need another Nintendo? Besides, consoles cripple games. Deus Ex 2 could have been a much better game if not for consoles. And as for the xperia phones, they are actually decent. ANT+ support and IP55/56 is very handy outdoors.

    --
    "It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
    1. Re:Fuck the playstation by rmdingler · · Score: 4, Insightful
      Sony may not always be the smartest kids in the room, but they will not relegate their revenue stream to fewer segments of technology.

      Too many companies get rendered irrelevant by not diversifying. Looking at you Blockbuster: After years of domination of the block and mortar video rental and sales niche, they passed up a chance to purchase the fledgling Netflix for $50 million US in 2000. (Current Netflix market cap is $28+ Billion.) Carl Icahn waged a proxy fight for control in 2005, and by 2010 the once great concern filed for Bankruptcy.

      It's precisely why you see Facebook, Microsoft, Apple, Amazon, and Google making what appear to be crazy stupid acquisitions.

      --
      Happiness in intelligent people is the rarest thing I know.

      Ernest Hemingway

  5. Shallow and ignorant by Kohath · · Score: 5, Insightful

    Sony is a huge company with a lot of divisions. These articles are written from a western tech consumer point of view. Western tech consumers don't know about the non-consumer, non-tech, or non-western-facing business that Sony has.

    Rather than reading this article, find something better to do with your time.

  6. Insanity: Bet the farm on a dumbed-down-PC??? by UnknownSoldier · · Score: 3, Insightful

    Why the hell would Sony focus on _one_ division that basically sells a dumbed-down crippled PC ?

    They already bailed on the PC market last year

    Their TV division loses money hand over fist:

    Sony, the parent company doesn't stick to selling insurance policies. It sells TVs, too, even though it canâ(TM)t manage to do so profitably. Chief Executive Officer Kazuo Hirai said the company will lose money on its television business for the 10th year in a row, with the red ink for TVs this time amounting to Â¥ 25 billion yen.

    And you want them to focus on a shitty under-clocked PC ???

    Can we mod article: -1 Clueless Author

  7. Re:Exiting...Giving up...Spinning off by MrBigInThePants · · Score: 3, Insightful

    Sony have always wanted to be the giant behemoth that dictates the market and thus abuses it for their own profit at the expense of everyone else.

    They have always done this and become exceptionally arrogant in the process..

    The difference now is that they have become increasingly irrelevant while still vainly attempting those same business practices. It is a common progression for companies of this ilk. (e.g. Microsoft with the browser and search)

    I think what should happen is that we should streamline OUR lives and be rid of Sony.

  8. Low margin vs. High demand by tlambert · · Score: 3, Insightful

    Electronics is low margin because of commodity parts and consumer demand for interoperability. Think, microwaves and computers. You don't need a special brand of microwave to heat Packaged Dinner Product.

    Low margin vs. High demand

    There's room for both low margin, and there's high demand items in consumer electronics.

    When I needed a Windows laptop, before Bootcamp existed so that Windows could run on Apple hardware, I bought a Sony Vaio: it was the most beautiful non-Apple laptop on the market at the time, and when you are going into a VC to pitch your idea to them, you want to dress to impress, and that includes the machine on which you are giving your powerpoint on your business plan.

    Vaio's were a high demand item because they had very good esthetics. A lot of other Sony products were higher margin than their competitors as well, because they were aimed at the high esthetic market.

    The PlayStation is really a terrible product, comparatively speaking; the XBox is a much better product, based on Microsoft being able to leverage it to get game onto their desktop platforms as well (at some point), and potentially onto Windows Phones, as well (at some point), because the underlying platform technology is Windows on all three.

    I think the person writing the article is a gamer who has drank the PlayStation Kool Aid, and wants Sony to concentrate on it, even though Sony is one PSN hack away from losing out on a holiday season, as they did previously. A single product company is just too vulnerable to single point of failure due to externalities.

    It's a dumb idea because it would be a bad business decision on their part.

    1. Re:Low margin vs. High demand by tlambert · · Score: 2

      Yes, because VCs are so impressed by a good-looking laptop. I mean, forget the numbers on the spreadsheet, this candidate has an ugly Thinkpad.

      VCs tend to be impressed by polish.

      Typically, if you take an idea to a VC, unless you have some IP tied up, or there is significant work entailed to get to a first mover advantage, they are already thinking about one of their go-to teams that can take your idea and run with it. Frankly, ideas are a dime a dozen, and beyond that, the only thing that matters is an ability to execute, and that means they are not investing in your product, per se, they are investing in your market segment and the team.

      Usually, they will prefer their team to the team that you have put together because they are familiar with their team. Their team has a track record, and they have an existing relationship with the teams they typically work with on new projects. It's one of the reasons there are so many serial entrepreneurs, and so few new entrepreneurs that make it past the friends-and-family or angel funding stage of their startup into series A financing.

      If you are a new entrepreneur, or someone with a proven technical track record, who has never been on "The VP Gravy Train", unless you are already profitable (and are therefore trying to give away a very large chunk of your company and control of your board of directors, in exchange for capital to bring your venture to scale), you need every advantage going into the meeting that you can lay your grubby little hands on.

      Packaging of yourself is therefore almost as important as the content of the presentation itself.

      So yeah, they're "impressed by a good looking laptop", if that's part of the overall package impression that convinces them that your team is the right team, and that they won't need to replace you, the founder, with one of their go-to CEOs, or one of their VPs they've been cultivating to take a CEO position at some point in the future, and "Gee, I think it's time we gave Frank a shot at a CEO position; what do you think, other managing partners of this large venture fund?".

      If you are a technical person, you will be lucky to last in the C suite much beyond (mostly) losing control of your board of directors, which is going to happen some time between closing Series A and closing Series B. Typically, your series B will be contingent on you losing control to the point that they can replace you at any point their confidence falters, and they decide "It's time to bring in adult supervision".

      PS: One of the reasons there are so few women in higher up positions is that the women haven't taken their paydays from being an early employee, and acted as their own angel investor in a new company that has been successful. You kind of have to be a gambling addict to get to that point in the game, so that you are a known quantity. That said, technical companies in the Fortune 500 have done 2X as well asall of the other Fortune 500 companies, in terms of percentages, so tech is about 2X as egalitarian as any other industry in that regard.

  9. Re:The console for the master race by Aighearach · · Score: 2

    Right, but does the existence of a PC disguised as console and preloaded with Steam really say anything about Sony?

    Sony is in the console industry, and the broader entertainment industry already, and they have a history in set-top boxes.

    The railroad example only works in one direction; a company that ignores the larger market. It doesn't work to tell us about a company that already exists in the larger market, and other larger markets, and other large markets, and that sees many of these not being profitable.

    The railroads lost out because they failed to even compete. Sony isn't in that situation, and the current restructuring plans don't implicate that situation. Sony is instead exiting from some areas it failed in, and moving around the rest so that the profit centers are in the corporate package together, and other parts are hidden away in owned subsidiaries. From a nerd perspective the whole thing can be summarized as, "some Sony divisions will be getting new names to make the bean-counters happy."

    Steam being disruptive and having further disruptive potential is a totally different thing, and some brand of PC-fake-console is irrelevant to that, and doesn't drag Sony in.

  10. Re:Exiting...Giving up...Spinning off by JoeMerchant · · Score: 2

    >I think what should happen is that we should streamline OUR lives and be rid of Sony.

    Done. Bought a PS3 in around 2008, and won a killer Vaio notebook in a contest around 2009 - severely disappointed in both for multiple reasons. Sony is off my approved vendor list, I just don't consider products with their brand anymore. Haven't encountered anything since the PS3 that is a "Sony exclusive" that I remotely care about owning.

    I do give the PS3 credit for one thing, video games are essentially a way to waste time, and PS3 has taken that to a whole new level, wasting tons of time without even having to play the game at all. Update required x 100, only plays media in very specific formats, Alternate OS takes an inordinate amount of time to install, Alternate OS pulled as a feature after spending an inordinate amount of time giving it a chance to "own" my living room TV. Done.

    I have an Intel NUC running the TV now, and instead of PS3 games, I have Steam. Instead of a crappy Media cataloging and playing experience I have Kodi and VLC. Instead of a gimped up web browser, I have Gimp and Chrome. Much better now.

  11. Re:The console for the master race by Aighearach · · Score: 2

    A Playstation is a proprietary black box, regardless of what is under the hood. It doesn't interoperate. The characterization has nothing to do with however crappy the Sony crap is, but rather with what you can do with it, and what it is marketed as being able to do. A Playstation is a totally proprietary black box with a whole proprietary ecosystem built around it.

    The whatever-its-called Steam box is just a generic PC with no special ecosystem whose entire purpose is just to run the same software available already for generic PCs.

  12. Re:Exiting...Giving up...Spinning off by hairyfeet · · Score: 4, Interesting

    The previous CEO burnt all the bridges and it will take the better part of a decade to rebuild them, if they ever can.

    Say what you will about Sony but in the 80s and 90s you want a damned good cutting edge piece of gear that will easily last the better part of a decade if not longer? Then YOU BOUGHT SONY because everything from the solder to the picture tubes was the best quality you could get, just well built through and through. Then they got arrogant, spread the company too thin, and every time profits didn't hit what wall street wanted? Well just drop the quality without dropping the price and there ya go! It didn't take too many failed units before folks got wise to that shit and now everybody knows you buy Sony? What you get is a Vizio with a higher price tag.

    So no shit they are thinking of bailing, like so many companies from IBM to Seagate they sold out the quality of the brand for short term gains, now its time to pay the check.

    --
    ACs don't waste your time replying, your posts are never seen by me.