Will Sony cut games group?
It has been rumored by the London Times that Sony will be making major cuts to several business units in an effort to save the company. Over the past three years Sony's game divisions have lost hundreds of million competing against Nintendo and Microsoft. The PS3 has had moderate success but is losing group in the console war. How the question has become will Sony be abandoning the PS3? Is it possible that in the current economic slowdown that Sony would kill off it's video game business that was so profitable in the past?
It's hard to believe a company of Sony's stature in the video game business would ever call it quits. That could also be said about Sega some eight years ago when they stopped production of the Dreamcast. At the time it was believed Sega was a better at making video games than consoles. Sega is still around today making games for all three console makers.
Unlike the Dreamcast, I think Sony can make drastic changes to the PS3 to make it more profitable. Sony has to lower that $399 price of the PS3 and forget about the $499 version of the console. Sony has an issue where they have kept changing the hard drive size but kept the price the same when they introduced new iterations of the hardware. We saw a 20GB and 60GB version at launch and have seen a 40GB, 80GB and 160GB released to retail with the last two the only ones available for purchase.
Why offer so many different hard drive options? Instead of placing a new hard drive in the system they should have offered something similar to how Microsoft approached the problem. Microsoft has help three different models at different price points to make the console more affordable. If Sony still had a 20GB unit out there maybe they would have a $299 console that would complete with the Xbox 360 or Wii.
What I really think we'll see is Sony will kill off the 160GB PS3 and dramatically drop production of the PS3. They will not kill off the PS3 but I would not be surprised if a PS4 was in the works for a Holiday of 2010 release. Sony will offer a new console that will be cheaper to manufacture and will come out at a much lower price than the current PS3. Sony must realize they will not sell enough PS3s to ever make a profit on the hardware so starting over makes sense. By forcing a new generation of consoles they can sell a new console to their loyalists and hope the developers will comeback and support their new system.
I think it is clear the PS3 is a failure this generation. Sony can choose to lose more money on this current hardware or start fresh. I would be very surprised if they chose to abandon the home console business entirely like Sega. Sony has several top notch developer studios and it would be shocking if any of them closed their doors.
Sources:
Wired
Yahoo
Wall Street Journal
It's hard to believe a company of Sony's stature in the video game business would ever call it quits. That could also be said about Sega some eight years ago when they stopped production of the Dreamcast. At the time it was believed Sega was a better at making video games than consoles. Sega is still around today making games for all three console makers.
Unlike the Dreamcast, I think Sony can make drastic changes to the PS3 to make it more profitable. Sony has to lower that $399 price of the PS3 and forget about the $499 version of the console. Sony has an issue where they have kept changing the hard drive size but kept the price the same when they introduced new iterations of the hardware. We saw a 20GB and 60GB version at launch and have seen a 40GB, 80GB and 160GB released to retail with the last two the only ones available for purchase.
Why offer so many different hard drive options? Instead of placing a new hard drive in the system they should have offered something similar to how Microsoft approached the problem. Microsoft has help three different models at different price points to make the console more affordable. If Sony still had a 20GB unit out there maybe they would have a $299 console that would complete with the Xbox 360 or Wii.
What I really think we'll see is Sony will kill off the 160GB PS3 and dramatically drop production of the PS3. They will not kill off the PS3 but I would not be surprised if a PS4 was in the works for a Holiday of 2010 release. Sony will offer a new console that will be cheaper to manufacture and will come out at a much lower price than the current PS3. Sony must realize they will not sell enough PS3s to ever make a profit on the hardware so starting over makes sense. By forcing a new generation of consoles they can sell a new console to their loyalists and hope the developers will comeback and support their new system.
I think it is clear the PS3 is a failure this generation. Sony can choose to lose more money on this current hardware or start fresh. I would be very surprised if they chose to abandon the home console business entirely like Sega. Sony has several top notch developer studios and it would be shocking if any of them closed their doors.
Sources:
Wired
Yahoo
Wall Street Journal
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