Why Sony needs to stop drinking its own Kool-Aid
Sony is in deep trouble. The company has been forced to slash its earnings forecast by 57 percent amid deteriorating economic conditions and its inability to compete more effectively in markets throughout the world.
Of course, Sony will still post a profit--most analysts claim that it'll be about $500 million--but the downturn speaks to Sony's issues and the fact that this once-dominant company has been downgraded to an also-ran in the industry.
Remember the days of Sony dominance? It was a time when the Walkman was on the minds of tech lovers around the world and the PlayStation moniker was held in the highest regard. Sony TVs were everywhere, and the company's ability to capitalize on any market was truly astounding.
But since then, Sony has lost its way. It's no longer a company that can rely on its name to beat other companies to a pulp, and with more competitors realizing how to beat Sony, it has quickly become irrelevant in many markets.
Sony's presence in the digital-camera sector is suspect, and its gaming business, once one of the most profitable departments at the company, has become an embarrassment of epic proportions. Although its PlayStation Portable is expected to beat forecasts, the Playstation 3 has proven to be one of the biggest blunders the company has ever committed.
At a time when Sony couldn't afford to make the wrong move in the game industry, it did. As Nintendo found a way to solidify itself in the market by offering innovative gameplay and an affordable price, Sony stuck to old conventions and played the "better graphics, higher price" game instead. Microsoft did too, but the Xbox 360's price tag and online experience were able to coax prospective owners to its side.
Much like other markets in which Sony competes, I just don't think it understands how to win anymore in the video game sector. Doesn't it realize that although it believes that the PS3's price point is fine for consumers, it really isn't? And doesn't it realize that it needs to differentiate the product in some way? Games that can be purchased on an Xbox 360 don't cut it anymore.
Oh, and neither does Blu-ray Disc.
Sony is living in the past on too many fronts. It thinks that selling products on its name will work like it did years ago, but I think it has finally become clear that it doesn't. Sure, Sony is still a "household brand," and there are millions of people clamoring for its products, but its name has lost significant appeal over the past few years, as it failed to tailor its strategy to consumer desires.
If Nintendo has shown us anything, it's that consumers want innovation and affordable consoles. Sony has failed on both fronts. And if countless competitors in the other markets Sony competes in have shown us anything, it's that consumers will pay for high-quality products as long as they're priced according to their value. In other words, paying a premium on Sony products because they're made by Sony doesn't appeal to anyone anymore.
There's absolutely no reason why Sony LCD HDTVs are priced as high as they are. Why should I pay a few hundred dollars more for a 46-inch LCD from Sony when I can get an even better HDTV from a company like Samsung or Panasonic for the same price, or even cheaper? I'm not willing to pay for the Sony name, and as Vizio and Westinghouse have shown, most customers aren't willing to do so, either.
And now, as Sony executives look in the mirror and try desperately to find what's wrong, they need only to look at the company they're operating. The culture at Sony is one that tries to make you pay more for a name that isn't held in the high regard it once was. And in the process, it's losing its standing in the industry as more consumers realize that better products can be purchased at a lesser price.
If Sony really wants to turn things around, it needs to do something it never thought possible: bring prices down to a more competitive level. Bring the PlayStation 3 prices down to compete on the same level as the Xbox 360. Get rid of the premium pricing on HDTVs. Eliminate the higher price tags on digital cameras.
And for goodness' sake, stop pretending like it's the 1990s all over again. It's not.
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Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
In bad economic times, why pay the premium when you don't have to. This makes no sense. Isn't this what Don is pointing out and the reason for Sony's troubles right now?
They have the same problem Microsoft has; they are too big for their own good.
Apple has become the Sony of the 21st century, providing a near full-circle solution for content creation, distribution and consumption.
This is what Sony did in the 80's.
The PS3 and 360 are fairly equal in what they're capable of delivering game wise, but most would argue that the 360 has a much larger catalogue of games. When you have one console at $400 and another at $200, and they both deliver basically the same thing, the cheaper of which having much more content....well, it doesn't take a genius to figuere that out.
Most people buy games consoles to play video games...
If they had introduced the PS3 after winning the HDVD wars, when component prices became much cheaper, it could have competed against the Xbox on features at relatively similar price points. However, by beating Sony to the punch and discontinuing the Xbox, Microsoft bought itself time to develop a good online presence and start planning for the next console. In this case, Microsoft has a great strategy in being the gen 1.5 console every time. By the time software houses get all the power of the PS3 down, they'll be competing for development resources on Xbox 720.
So, there's the niche each occupies: Nintendo = games that are actually fun for casual gamers and therefore attractive to the mass market, Microsoft = games that have the best online experience and therefore attractive to the mass market, Sony = highest high end graphics wiz bang power wo hoo! Sony's is a strategy, but not a mass market strategy.
The author of this article is as short sighted as your usual trolls. Get back under that bridge wid yer!
At any rate, to reed a non biast article please follow the link below. ?The company attributes the fall largely to the strong yen, which drastically reduces earnings from outside of Japan. Poor sales of televisions, compact cameras and camcorders were also responsible, along with the general global economic slowdown and increased price competition.?
http://www.gamasutra.com/php-bin/news_index.php?story=20781
You should probably consider the possibility that you do not represent the majority of people in the market for a gaming console?
Given recent sales figures and all, I'd say you are very much in the minority.
I'm not quite sure if, somewhere along the way, you just admitted defeat in the face of the hardships that accompany professional journalism, or if this is all a part of your "style", but know this: It's becoming increasingly more difficult taking you or your topics seriously.
Why, do you ask? Well,
http://news.cnet.com/8301-13506_3-10067855-17.html?tag=mncol;title
weekly reminders about why Blu Ray will FAIL, FAIL, FAIL aren't helping your cause much, as is your now-infamous assumption that Sony SLASHING it's prices on it's Playstation 3 entertainment system down to $400 last fall was a blatant act of "desperation", as you eloquently put it.
http://news.cnet.com/8301-13506_3-9794764-17.html?tag=mncol;title
Apparently, even hypocrisy is no longer longer a taboo element for you. Well done, skipper.
I look forward to your next little blog subsequent to Sony announcing a brand new pricing strategy for their products discussing how this is a sign that the company's on its way out.
also, all the games i want to play are either exclusive on PS3 or on both systems. sure, Gears of War was cool, but i would rather play Metal Gear Solid 4 any day of the week.
and don't get me started on the hardware. the PS3 is just the better all around machine. the 360 in comparison is a piece of garbage. you keep railing on about how the PS3 is more expensive than the 360, suggesting that they are equal machines hardware wise. they are not. 360's failure rate? hope you got the extended warranty.
so, Don, since you're such an 'expert', tell me why i should buy a Xbox 360? please, i really want to know.
I'm not sure how online gameplay can be any better on the PS3. For games that are available on both systems, they are practically identical in every way. The only thing that could make the experience any better/worse is lag, which of course is present on both consoles and depends entirely on whom you are playing with, whose hosting, etc. Why is Xbox 360 better for online? Like you said, Xbox Live is loaded with features, constantly updated content, and EXCLUSIVE downloadable content (GTA IV ring a bell?).
Please, get started on the hardware. The Playstation may be packed to the gils with power, but game developers are struggling to code with 7 cores! How do you explain all of the titles available on both consoles that have IDENTICAL graphics? I mean the Xbox 360 is a piece of garbage like you said. Playstation Magazine has recently gone as far as saying that Fallout 3 looks better on the Xbox 360.
As for the 360's failure rate, that I can agree with. I've gone through my fair share of consoles, and by now they really should have had this issue laid to rest. Is it a pain to get my console repaired? Sure it is. Does it cost me anything? No. I'm not sure what extended warranty you are talking about, but every Xbox 360 comes with 3 year warranty to cover the RRoD. Pick up the phone, make a call, a week later I have a new Xbox. Gives me a good reason to go outside and get some fresh air... maybe you should do the same since this article seems to have gotten you pretty wound up.
If Sony wants to get back into the game, they need to start by getting rid of memory stick and go with SD like everyone else. Right now I won't even look at any Sony/Ericsson phones, cameras, etc. that require memory stick. Everyone I know thinks Sony is overpriced and crap-laden junk.
Sony: standardize and lower your prices to be in line with the rest of the market. Until then, you're banned from my household.
Why do people buy the 360 with all the failures and the poor quality? I just don't get it. but yet people buy a new 360 console to replace the one that failed after 15 - 18 months of use. Say what???
MS denied there was a problem for over a year until people got fed up and started legal action.
And frequent readers know CNET is VERY biased towards MS and all their poorly designed and executed products.
If any other company pulled the crap MS does, it would dominate the CNET web site.
The $199/$299 is selling consoles but one has no hard disk and neither have built in wi-fi.
The face of the game industry has changed though. Nintendo is once again the leader with the DS and Wii while Sony and MS vie for second place. Instead of relying on third-party games like the PS2 did, the PS3 will live and die by their first-party titles, which are miles ahead of MS's. For examples of that, look at Uncharted, LittleBigPlanet, Motorstorm, and Ratchet & Clank. As MS pays companies to lead on their consoles in development, PS3 titles suffer as a result because MS is the weaker platform in terms of capabilities. Games that are developed on the PS3 first are often better than the 360's and plus the quality of the game is enhanced on the 360.
We all know that MS is weak everywhere but the US and the PS3 and Nintendo are world-wide leaders. I for one, hate everything that MS touches because of the reputation for low quality hardware and software that, while easily accessible by millions, is of lower quality than the competition. I do not own a Windows computer, I own a Mac. MS doesn't have the best reputation for building stable operating systems and stable hardware, even in their games division. That alone is what makes the PS3 worthy of my dollar, in addition to what the future capabilities hold for the console.
Right now, the PS3 is coming into its own and gaining steam.
- by Don Key October 24, 2008 1:57 PM PDT
- And as Steve Jobs said recently and don't forget that he is on the board of directors of the Blu-ray group... he said that the Blu-ray licensing right now is a "bag of hurt".
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