Will The Playstation 3 Save Sony?
Posted on January 7, 2009
Filed Under Uncategorized |
After Sony said that they would be cutting jobs in their electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview: "Sony doesn't have any core businesses that generate stable profits". But will the Playstation 3 be able to save Sony?
Although some people may point this woud that ever since the Playstation 3's release back in 2006, it hasn't been making a profit. And that it because of the rather odd but simple fact that Sony are selling the console for less than it costs to make. And it has been like that since it's release, Sony purposely reduced the price below their manufacturing costs so they could break into the market.
However, it may seem odd, but Sony has use this tactic every time they have released a console, even though the competition was tough, they did it with the Playstation 3.
Their plan is that they release a high spec console at a loss which will last for many years and eventually turn them in a profit. But will it work this time? With the high pressure of Xbox 360 and the new market that Nintendo Wii generates, will Sony manage to make enough profit?
The biggest problem is that the price of the Playstation 3 console will not be reduced until Sony begin to make a decent profit. But as the consoles price currently is alot higher than the other consoles on the market, they won't get a huge proportion of the console sales, which will cause them to loose money for longer.
Although all that sounds a bit bleak for Sony, there is one upside that they have, Blu-ray. It was lucky for Sony that Blu-ray came out on top of the DVD battle. If HD DVD has won, it would have been alot worse for Sony.
So, currently, it's not looking good for Sony, also, with their release of Playstation Home, their new online 3D community, which is already being shot down by Microsoft and EA. Both of them have said that Sony's attempt at a social community is outdate and not directed.
Senior manager at Xbox 360 game console division, Aaron Greenberg, said: "When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.”.
Hawkins said: "I can't tell if they're going towards this mass market idea…or if they’re being lured into essentially trying to compete with Warcraft or Second Life”.
After Sony has spent alot of time and money on their new online community, it has just been shot down, personally to me it just seems like an idea of earning money, there are several things within the new world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm pretty sure that not all gamers will want to be spammed with adverts while walking around.
Overall, it's not a bright future for Sony as they are relying on a over priced console to make them profits, and they won't reduce the price of the console until it makes them some profit. Who knows where Sony will be if their console doesn't sell more.
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