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'Sony Needs a Fresh Hit' (bloomberg.com)
Even as Sony's CEO Kazuo Hirai has done a remarkable job over the past five years -- taking bold decisions on the areas the company should be focusing on, and cutting efforts on those that aren't working -- his company desperately needs a fresh hit to boost its revenue and to become relevant in the mind of most, writes columnist Tim Culpan for Bloomberg. An except from his article: According to a company statement Tuesday for investors' day, the key will be to "remain the 'last one inch' that delivers a sense of 'wow' to customers," expand recurring revenue, and pursue new businesses.Those three strategies are closely linked. With TV sales in decline, its Vaio PC business spun off, and its smartphones barely a blip on the radar, Sony's last inch is heavily dependent on the PlayStation. Sony's Game & Network Services business has grown at both the top and bottom lines over the past five years, but the games console business is stuck in time. [...] Sony needs to build a device that will be far more ubiquitous and can appeal to consumers beyond the current male-skewed slowly aging hard-core gamer base. Amazon and Alphabet, with Echo and Home, are two such examples, and Apple will probably follow suit. With its background in audio, video, sensors and entertainment, Sony has all the right parts to make it happen. For the company that invented the Walkman, dreaming up another hit shouldn't be so hard.
OK, so it's not a mass-market product. But their mirrorless camera bodies, in the A7 and new A9 manifestations, should be making Canon and Nikon a little nervous right now.
Don't disappoint your bird dog. Go to the range.
I'll grant that they've come a long way from the rootkit scandal, such as when they responded to the Xbox One's original, draconian policy of tying discs to consoles so friends couldn't loan games to each other with their own, much better policy for sharing games, but that rootkit debacle destroyed a lot of trust.
I consider myself to be one of the more lenient ones around here, in that I'm fine with owning other products of theirs, provided they're sandboxed or disconnected from anything important, but the notion of running a Sony-developed OS that has the ability to tell them everything about my life? Not until I'm convinced their interests align with mine, which is to say, not a chance in hell as long as they are one of the major players in the media industry.
Sony (Electronics) has had a long history of being innovative. The problem often has been that they've had a long history towards pushing proprietary formats and devices. Some of those have been successful, many have failed to catch on, and some were spectacular failures (Betamax).
Somewhat ironically, their Android phones are relatively open - the failing there is likely that the devices are bland compared to an iPhone, and sit somewhere between a pure Android (a la Nexus/Fi) and a fully vendor customized setup a la Samsung. They haven't managed to establish a market niche with them, let alone dominate.
As for consoles, I'm not holding my breath on expectations that the Scorpio will be as dominant as you think. 4k gaming takes serious horsepower, and it's not cheap, even today. Past history shows that 'best hardware' doesn't always win, because there's a lot of other factors involved (price being one of them). That's not to say that the PS4 is going to 'win', though it's currently outsold the Xbox1 by about a 2:1 ratio. I find it ironic though that you slam the PS4 over something that is EXACTLY true of the Xbox1 though - they're both (an) "underpowered PC with added DRM".
Now, what would make me look at Sony products again? It doesn't have to be a world-breaking innovation, but there are definitely a few things that they could do, just off the top of my head:
1) Improve quality back to premium level. Sony products today are pretty much the same mediocre quality as everyone else's, because they're largely made in the same Chinese/etc factories, and use the same Chinese/etc parts. I'd pay slightly more for better quality, but I have to know I'm going to get it.
2) Strive for openness. Sony has a bad history, but they can do a lot to get past that. You don't need to choke the market to be a leader, and the downside of a failed proprietary format is way worse than an open one. They need to do more things the way they handled the game-sharing aspects in the runup to PS4 vs Xbox1, where Microsoft started talking about restrictions on sharing games, reselling etc, and Sony came out and mocked them for it (brilliantly), causing Microsoft to have to ditch those plans.
3) Get rid of the film division. Following in part with 2, get rid of the film division so that you're not tied into the entertainment side of things, because the studios/etc are always pushing for anti-consumer things.
I mean as far as consumer facing products go (which is really what this article seems to be looking at) Sony is three things: Media (TV*, movie, music studios), console gaming, and consumer electronics. Unfortunately that last market is a walking corpse right now. TVs are a commodity these days, with the difference between high end brands and low end discount brands being trivial to everyone but the home theater enthusiasts. And speaking of home theater, that's going back to being a niche market after growing rapidly in the late 90's and early 00's due to DVD, and Sony isn't even a strong player in it these days anyway. Even plain ol' TVs are falling out of fashion with younger consumers who prefer watching on phones and laptops. Don't ask me to explain that trend; I can't. I don't get it either but it's a reality that electronics companies are going to have to face. Physical media sales (and Sony's lucrative patent licenses) have also fallen off a cliff. Music players and home audio system markets are beyond dead for the average consumer.
Today smart phones are the media consumption device of choice for a growing number of consumers and between Samsung and Apple, that market is locked up tight on the high end, and Sony can't compete on the crowded middle and low end segments. Everything Sony was know for is being consumed by smart phones.
If it wasn't for the PS4 being a success, mainly due to Microsoft fumbling the XBox One and spending less on exclusive titles, Sony as a brand would be practically invisible to consumers. This generation has worked out well for them so far, but they can not count on out-maneuvering Microsoft forever. Microsoft is already fighting back on pricing and their upcoming Scorpio looks ready to trounce the PS4 Pro performance wise. If Microsoft decides to start throwing money at good exclusives again, they can claw back quite a bit of market.
Their only other bright spot they have is their camera division which is doing some really cool stuff in the mirrorless camera market. However that is mostly a niche pro market. Most consumers are perfectly happy to use their smart phone camera.
Honestly in a decade or so I can see them spinning off their consumer electronics business or outright selling it, keeping the gaming and media companies. I just can't see where they can go from here in the electronics business. Of course they still have commercial business units like their camera sensor business. I have no insight there, but again we're really looking at the consumer facing Sony here.
*They have reason to worry here too. Sony makes a number of TV shows for various networks, however due to the new realities of network TV (lower ratings, dropping viewers, and ad rate pushback from buyers) show ownership is playing a bigger and bigger part in what shows get picked up or renewed. Sony doesn't have its own network to fall back on so their only choice is to either field fewer and fewer shows, cut ludicrous first-run fee deals, or (and this is starting to happen now) give up a slice of their back end syndication and foreign rights money. Sony Television makes all their money on syndication deals, this is why you see shows like "The Rules of Engagement" stay on the air for 100 episodes despite poor ratings and odd timeslots. They practically give those final seasons to the networks to get it over the 88 or 100 episodes they need to create a syndication package.
I browse on +1 so AC's need not respond, I won't see it.
The worst part about that list is that many of the items on it were superior in many ways to their competitor, but due to Sony's greed failed to catch on.
Sony has come up with some great products, they just need to realize that nobody wants hardware that isn't compatible with anyone else's, and none of the competitors are willing to pay the kind of royalties Sony wants, even if the end product is better.
Beyond that though, Sony did at one point in the past stand for quality. There's a reason people wanted a real Walkman and not a rip-off. The Walkman was simply a better machine. Same with many of their products. Now though the quality of Sony stuff isn't "bad", but it's also no better than any of their competitors, but they often try to charge a premium for the brand. The brand just isn't worth a premium any more.