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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."
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
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.
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. ;)
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
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
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.
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.
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.