Newsmaker: Sony's brave Sir Howard

Sony has been in the news a lot in the last year, but mostly for the wrong reasons.

The electronics giant had to recall millions of notebook batteries. The hotly anticipated PlayStation 3 came out, but in lower volumes initially than expected. The fight over Blu-ray and HD DVD crimped sales of future high-definition players. Sony has picked up momentum in flat-panel TV sales, but the whole industry is experiencing fierce price competition.

Clearly, Howard Stringer, CEO of Sony and a Knight Bachelor in the British honors system, has his hands full. The former CBS newsman, however, was as ebullient as ever when he sat down with CNET News.com's Michael Kanellos and other reporters at the Consumer Electronics Show in Las Vegas earlier this month. Stringer, along with CFO Rob Wiesenthal and Sony Electronics President Stan Glasgow, discussed this year's product lineup for Sony, future products such as OLED televisions, the PlayStation 3 and an upcoming plan to right Sony.

Q: What are the current status and the goals for the electronics group?
Stringer: We set out a year and half ago (in June 2005) when I became the CEO to recover the electronics business to profitability. You will remember that for the first time the electronics side of Sony was unprofitable. Well, in the space of this time we are now at 4 percent margin on electronics, and that's significant. The cost of the PlayStation has raised some challenges on the consolidated numbers that we have promised, but we have to find a way to reach those targets as well. And that's what we'll be working on over the next few months, deciding how to get to the 5 percent consolidated number.

Despite understandable concern about the cost and so forth, the whole purpose of PlayStation 3 is to create future opportunities.

--Howard Stringer, CEO, Sony

You all know about the (PlayStation) delays because you all covered that thoughtfully and elegantly and unkindly--but we've now reached a million PlayStations shipped to the United States, as ultimately promised.

And we're now very comfortable with our research program for PlayStation 3, which one researcher recently described as the Mercedes of games players, for obvious reasons. The million is more than we delivered of PlayStation 2 so, for all the anxiety, I think PlayStation 3 is well on the way to living up to that promise. That's a good sign.

What are the goals for this year for PlayStation?
Stringer: I think it's 6 million units by the end of the quarter, worldwide. And then we have got the European launch in spring, which is very important to us. (Editors' note: Stringer intitally said it would launch in April, but Sony later clarified it would occur in the spring.) I think we have 20 games out there. I assume we're going to increase the number of games.

Lost in the shuffle is the fact that the current games that are out there are only using about 20 percent to 25 percent of the bandwidth. Once the publishers' excitement reaches a level of intensity that they start using more of the bandwidth, that will create additional excitement.

Secondly, there now are 1 million Blu-ray players in the market, and each of those in the United States has a Blu-ray disc because we put Talladega Nights inside. I'd say 90 percent of the people who (own) PS3s are playing that Blu-ray disc on it or playing other Blu-ray discs on it. Contrary to some of the reports, it is an effective Blu-ray player. The people who like Blu-ray are the people who play PlayStation 3, just as people who play PS2s were the early proponents of the DVD format. It drove the DVD format.

The Cell chip group is beginning to come up with Cell applications that are quite exciting. And I don't mean just the Stanford supercomputer (type of application) but beyond that.

--Stringer

I did read all the HD DVD excitement, but I think they sold 60,000 players, and we actually put out a million Blu-ray players. (Editors' note: Stringer initially said 60,000 HD DVD discs, but Sony clarified that he meant players.) So Blu-ray format is a strong format. You have to have a high-definition television; you have to have an HDMI link-up. But if you've seen the Blu-ray disc on the PlayStation, on the television set attached to PlayStation 3, it's a remarkable image.

Do you think the PlayStation 3 might become a vehicle for other applications or other forms of entertainment?
Stringer: Absolutely. Despite understandable concern about the cost--the whole purpose of PlayStation 3 is to create future opportunities. The early anxiety is that the Cell chip is expensive for consumer electronics applications. But prices come down, and for the first time in the last few months the Cell chip group is beginning to come up with Cell applications that are quite exciting. And I don't mean just the Stanford supercomputer (type of application), but beyond that. We're clearly at the stage where the opportunities for that high-powered processor are gathering momentum.

Somebody said to me before Christmas, "Well, yes, but this is very risky." Well, on the one hand you tell us we're not innovative enough, and on the other hand you tell us if we are innovative, it's too risky. It's a wonderful balance, and it is true. In the short term it's risky. But between the excitement of its potential and the availability of bandwidth that you have unused for interactivity as well as movies and 3D, it's worth the price of admission.

More Newsmakers

[ddesy]

Playstation 3 goals...

Gee, is that 6 million shipped, or 6 million sold? I see plenty of those black boxes sitting on shelves in my neighborhood. They aren't selling out anymore.<br /><br />The Nintendo Wii, on the other hand, still cannot be found.

[ray08]

Forget you sony!

If you think we, the consumers, have even come close to forgetting that DRM mess you pulled on us with the rootkit, think again!<br /><br />SONY BITES THE BIG ONE!<br /><br />My HDTV will be any brand but sony, even if it doesn't have as a good of a picture. Tossed ALL of the sony audio/video gear. Didn't try to sell it, it's landfill fodder!

[rtripathi]

Boycott Sony

Yes, I'll never buy anything Sony.

[gw188397]

If Sony has taught me anything...

it's that pirated content is the only safe content.

[Bluray-disc]

HDTV

You probably cant afford a SONY HDTV!

[umbrae]

Horse wash...

PS3's look pretty on the store shelves. Shame you can't even find a Wii display model.<br /><br />Once again Sony is taking credit for DVD's which were already well excepted before the PS2 came out. And they claim every PS3 owner is someone that supports Blu-Ray. However, when you actually listen to what PS3 consumers are saying, they could care less about Blu-Ray. I know a couple that have HD-DVD players and don't plan on buying any Blu-Ray movies.<br /><br />But hey, whatever Sony has to do to make the numbers look good. I can't wait to see the huge PS3 pyramids the stock boys create at Target after Sony is done "shipping" the 6 mil. Should be a beautiful thing.

[bemenaker]

They never learn

Maybe Sony should study their own history better. Blu-Ray is dead. Without the adult cinema producing content on Blu-Ray which Sony forbids, it's a dead format. Betamax died when the adult films standardized on VHS, now that they are standardizing on HD-DVD, no more Blu-Ray.

[Dravont]

It's not decided yet

"Vivid Entertainment will release its first adult film on Blu-ray and HD-DVD in late March or early April"<br /><br /><a class="jive-link-external" href="http://www.tvpredictions.com/debbie011207.htm" target="_newWindow">http://www.tvpredictions.com/debbie011207.htm</a><br /><br />The adult industry will be going with the format that is best for their sales. The factors that have been discussed so far include: 1) the cost of the media, 2) the number of players, and 3) if the industry is allowed to use the media.<br /><br />Here are my reasons for thinking that Blu-Ray can still win over the adult industry. 1. The media prices are constantly dropping. Within a year or two there will most likely be little to no difference in the prices HD-DVD and Blu-ray. 2. By including a Blu-ray player in every PS3, Sony has made sure that there are now far more Blu-ray players sold than HD-DVD players. 3. So far there is no official policy that Blu-ray media cannot be used by the adult industry. In fact, everything I have seen coming from Sony is saying that they are welcoming the industry. <br /><br />Also, with the backing of several movie studios, and the makers of every game for the PS3, I think Blu-ray is strong enough to survive even without the adult industry.

[Dr. B]

I feel sorry for society

It's a sad comment on our society when "adult films" are a deciding <br />factor in something like what media format "wins".

[ewelch]

Not any more

A photographer friend of mine was assigned to cover two Adult <br />industry shows in Las Vegas, and it turns out that some of the <br />biggest adut companies are now going Blu Ray. Sony has <br />dropped the no XXX rule. I don't remember the names of most of <br />the companies he told me about, but Vivid (one of the biggest) is <br />now Blu Ray exclusively, and one other one as well. More are <br />saying they'll do Blu Ray as well. So HD-DVD no longer controls <br />the adult video industry.<br /><br />I agree that it's sad that such crap is determining and has <br />determined technologies viability. But that's the world we livei <br />in.

[fred dunn]

Arrogance and Ignorance, Sony's Downfall...

I feel that neither of the current HD content optical "standards" will be the winner. In the time it takes for one to try and vanquish the other into oblivion someone will come out with a single higher density drive using the newer shorter wavelength solid state lasers.<br /><br />It was a mistake for them to take this "winner take all" contest of incompatible formats to the consumer. The consumer wants a "rock solid" standard that everybody is behind. Too many have been and continue to be burned by new technology that the industries as a whole don't get behind.<br /><br />I wouldn't call Sony's Sir Howard Brave but arrogant and ignorant. this is one of the reasons that Sony is failing to provide the consumer what they want at a pricepoint they can afford.<br /><br />Fred Dunn

[jchandler15]

How does Sony Know the Bluray will win

Surely Sony shouldn't be saying anything about the Bluray until they know it has won.<br />Josh Chandler<br /><a class="jive-link-external" href="http://www.josh-chandler.blogspot.com" target="_newWindow">http://www.josh-chandler.blogspot.com</a>

[ralfthedog]

Better format, more content.

Blue-Ray is technically far better than HD. Unfortunately, the content has yet to live up to the potential. I guess low loss 1080P is expensive to produce.<br /><br />Blue-Ray also has more exclusive content. The content gap will grow over time.

[Bluray-disc]

It has won

Bluray-disc has won.

[mbenedict]

Welcome to the internet & PPV age...

The internet wasn't around for VHS vs. Betamax. The adult industry was able to play a huge role in the format wars because video tape (in whatever format) was the only distribution channel available.<br /><br />With the advent of (broadband) internet -- plus Pay-Per-View streams on cable and satellite TV -- the importance of physical delivery of adult content is much less today. <br /><br />And since the regular DVD format will still be with us for a long time, high-definition DVD is only one among many distribution channels available to consumers today. Big change from 20 years ago.<br /><br />The net effect is the adult industry can no longer dictate which physical format the rest of the world uses. <br /><br />So even if the industry standardizes on HD-DVD as the physical delivery method, it wont matter much because those with Blueray can still access the same content through one of the other channels. Most consumers might even prefer non-physical delivery for their porn.<br /><br />I would suspect at the end the adult industry will produce Blueray content after all.

[ralfthedog]

You can't pay cash on the internet.

I can't picture someone wanting to use there credit card to purchase Marmots Gone Wild IV over the internet. PPV is less of an issue. Purchasing anything on the internet from a company you do not know is an iffy proposition. I trust the porn company's much less than I do the makers of CoffeeMattic (TM).

[ralfthedog]

My problem with Sony

My problem with Sony is QC. Sony Quality Control bites the big pickle. Don't get me wrong, the Root Kit was a very bad issue, but I see that as another QC issue.<br /><br />I purchased a PS-3 because I wanted a chance to play with the Cell processor (PS-3 running Linux is a very easy way to write Cell code).<br /><br />PS-3 games and Blue-Ray movies look great. The sound is stunning. PS-2 games look very bad unless you drop resolution to 420P. <br /><br />All Sony needs to do is Auto change to 420P when a PS-2 disk is played, or let the user set a different resolution for PS-2 games and users will have a much better experience. <br /><br />Please Sony, it is a very easy fix.

[ajbright]

Sometimes even the lowest resolution doesn't help

I haven't witnessed this myself, but a few friends of mine have games they say look bad no matter what resolution you set the PS3 to.<br /><br />But the problem has nothing to do with the PS3, its the games themselves.<br /><br />If the game is written for say the 320 x 240 standard def resolution, if you play that game on even a 640x480 480P resolution you've either got to scale the picture to double its size (try doing that with a photo in a paint package to see the effect).<br /><br />The alternative would have been to have the game appear in miniature on the screen (in the same way a background picture will appear to shrink if you increase you computer's resolution but don't stretch the image to re-fill the screen).<br /><br />In my mind this would have been the better option, except that on smaller TVs games may have become unplayable.<br /><br />Progressive scan games such as God of War should not have this problem as they are written for both 480i and 480p resolutions - and other games appear to have better scaling algorithms written by the coders that can mitigate the jaggie effect somewhat.<br /><br />But generally there's not much you can do if, as Sony have done, you install the original PS2 graphics chipset on the motherboard instead of emulating the chipset as the 360 attempts to do.<br /><br />In the case of the 360 you can write upscaling algorithms to smooth out the jaggies when you double the size of you bitmap images. The PS2 hardware won't do this, because on the original PS2 it was completely unnecessary.<br /><br />So Sony could fix the problem by writing a PS2 emulator in a new firmware update - but this would probably lead to more compatibility issues.<br /><br />Personally I have no particular desire to play PS2 games on my PS3 - yes I realise that you probably have a few you enjoy too much to wait for PS3 equivalents to be produced - but unless you use the composite cables and play the PS2 games on smaller SD tvs, there's no answer to this unless Sony change their minds and produce PS2 emulation for the PS3.

[mahuti]

Brave Brave Brave Sir Howard....

Just replace "Robin" with "Howard" and imagine him being followed <br />by a medieval singing troupe. Actually, I think I can better imagine <br />a Sony exec being followed around by some type of crappy pop <br />rock group singing in a whiny emo voice....<br /><br />Bravely bold Sir Robin rode forth from Camelot.<br />He was not afraid to die, O brave Sir Robin!<br />He was not at all afraid to be killed in nasty ways,<br />Brave, brave, brave, brave Sir Robin!

[gw188397]

Apparently Sir Howard doesn't understand

Sony's problem is product quality. And their steadfast refusal to acknowledge product quality problems and fix them. For consumers, it's frustrating to buy a defective product. But when the vendor refuses to acknowledge or address the defect, it generates active hostility toward the brand. Sony is going to continue to have a difficult time in the electronics market if it doesn't get this.

[Karl Konnerth]

Quality AND Product Support

I've also been disappointed over the past five years with the quality of Sony support. I've never received very good technical or customer service support from them. And I was just disappointed to learn that they couldn't repair the ear pads on a $500 Dolby Digital Surround Headphone system that I bought five years ago.<br /><br />Ten years ago my living room was all Sony: CRT, A/V Receiver, DVD Player, Cassette Deck, Turntable, several CD Changers, WebTV, and the fancy headphones. I've had problems interfacing them (changing Ctrl-A, S1, etc. standards), early obsolescence, etc. And now very little Sony product remains.

[ajbright]

PS3 as a media PC

I own both the XBox 360 and the PS3, and I love both systems. Eventually I will get the HD-DVD add on, because some movies will only come out in that format in the short term, although I'll probably wait for a $50 price drop before I do.<br /><br />Personally I can't tell the difference between the formats and I don't care. An uncompressed 2hr digital movie is approx 1 terabyte in size - that's 1024 gigabytes. So whether the disk stores 25 or 50 gigs is irrelevant, as they're both hugely compressed. Both look great, although the XBox HD-DVD player does do a decent upscaling job on regular DVDs (as do stand-alone blu-ray and HD-DVD players), so it has the edge in that regard. However I already have a 1080p 5 disk upconverting DVD player, and my next TV will do the upscale/conversion itself, so all that will become irrelevant as well.<br /><br />But what excites me the most is the use of either platform as a media PC. I can't speak for the Mac, a great computer to be sure, because I have owned one since the days of the Amiga. But the Windows PC is total garbage when it comes to using it as a everyman media center. It is too unreliable, too clunky and as with all media systems, too tied down with competing DRM software screwing up the potential of sharing media throughout the house or handheld players.<br /><br />The PS3 itself excites me the same way the Amiga did when it first arrived. Sure it is primarily a game player, and so was the Amiga to start with. But some of the most innovative software and ideas were developed for that platform - it became the first affordable DTV system, the first affordable desktop 2D and 3D animation system, and a great development platform that kickstarted most of the major game studios of today. It was the only computer system that allowed real time visual affects to be applied to live TV feeds for more than a decade.<br /><br />And sure you could set up a PS3 or 360 to run Linux, but that just scratches the surface of possibilities.<br /><br />I realise there can never be another Amiga, Atari ST or Archimedes computer - such things belong in the past. But there does exist the possibility of using these consoles for heavy weight media purposes, such as a media server for the home, or an editing system for movies, photos and sound.

[slim-1]

Actually Sony's problems started when they started acting like Microsoft

Very bad teacher. Sony doesn't have a monopoly and will find this a bad road to follow.<br /><br />Bad QA, hidden Virus', hurting their own customers, etc... is something that is a normal business practice for Microsoft. It will slowly take them down.<br /><br />For Sony it will rapidly take them down.

[richto]

Its in the shops, but No one is buying the PS3!

I have just come back from CES 2007 - While I was in the USA I visited 4 different Walmarts, a Sears and a Toys-R-Us - they all had stock of the PS3 - and the sales guys universally said it simply isnt selling.<br /><br />So that one million PS3s 'shipped' in the USA is exactly that - units shipped - most of them are still sitting on store shelves<br /><br />No one want to pay such a high price when the Xbox 360 provide superior graphics and better looking games at a much lower price point.<br /><br />I note that the price on the Xbox 360 is steadily moving downwards and / or being discounted, with bigger bundles added for the same money - as Microsoft are close to break even on the current hardware pricing.<br /><br />Sony simply cant compete with that as they are already massively subsidising the PS3 hardware costs.

[Dr. B]

Same old story

I faced a similar deal when I was looking for my Wii. While I don't <br />know about the PS3 deal in any other stores, I saw 6 60 GB PS3s for <br />sale when I went to Toys R Us looking for a Wii. The guy I asked to <br />see if they had any in stock (In case I simply couldn't see them) said <br />basically that. They were out of Wiis but has PS3s for sale.<br /><br />I was probably only able to get my Wii by chance, as I went in to a <br />different store the next morning and they had JUST gotten a <br />shipment in.

[richto]

Its in the shops, but No one is buying the PS3!

I have just come back from CES 2007 - While I was in the USA I visited 4 different Walmarts, a Sears and a Toys-R-Us - they all had stock of the PS3 - and the sales guys universally said it simply isnt selling.<br /><br />So that one million PS3s 'shipped' in the USA is exactly that - units shipped - most of them are still sitting on store shelves<br /><br />No one want to pay such a high price when the Xbox 360 provide superior graphics and better looking games at a much lower price point.<br /><br />I note that the price on the Xbox 360 is steadily moving downwards and / or being discounted, with bigger bundles added for the same money - as Microsoft are close to break even on the current hardware pricing.<br /><br />Sony simply cant compete with that as they are already massively subsidising the PS3 hardware costs.

[CeeDubbs]

Please tell Sir Howard about the Wii

I don't know if everyone has noticed yet but the nearest Gamestop most likely has the PS3 in stock. In fact, they can't seel them at $499 and $599 a pop. The Wii, however, is sold out everywhere. You can't even get a controller anywhere.<br /><br />I definitely thought that the PS3 would kill it's competition and that Blu-Ray would win because of it, but I know realize that people care more about gameplay that graphics. Always have in fact. For this reason, and the fact that it's half the cost, the Nintendo Wii will most likely beat out the PS3 and Sony is in a lot of trouble.<br /><br />Some call it arrogance or ignorance, but the simple truth is Sony has lost sight of what consumers want. They've always done business based on their brand name. General consumers always thought Sony represented a top of the line product - because it always cost more. Now, the only technology Sony has a good handle on is LCoS displays.

[vgm]

We don't need no stinkin Sony products

When they divest of their media holdings and start innovating again instead of working on DRM and root kits, maybe I'll start buying Sony products again.

[ReVeLaTeD]

A true Sony "suit".

So all he's doing is spitting off at the mouth. Not ONCE did he say the words that should be coming out of his mouth - that Sony would push to lower the price of the PS3. Instead, there's blatant arrogance that sheep will buy the thing. And true, sheep will...but the sheep are getting smart, evidenced by my recent visit to Circuit City where I saw 5 60GB PS3s sitting out on the floor. Literally, ON THE FLOOR. I saw 2 people walk right by them to see the Wii and 360 kiosks.<br /><br />I was really impressed when Microsoft said something to the effect of, "you should get a 360 and a Wii, that way you have the best of both worlds". I truly agree with that approach and intend to do just that when the Wii comes back in stock. Microsoft isn't taking an arrogant approach about it, they're just doing everything they can to give everything to the consumer. Their only problem is the whole "3 rings of doom" issue - to which I was glad they decided to increase the warranty.<br /><br />Overall I've been very impressed with Microsoft's handling of things.<br /><br />As far as HD, he lied...Universal isn't the only studio. Let's not forget the "adult" corner...which basically is ALL ending up on HD. He may be too blind to realize it but that's huge.

[ArbitraryThinker]

His timeline = death to Blu-ray

I was astonished by his quote regarding the timeframe for Blu-ray to become a mainstream product. If he is correct about this, Blu-day is doomed. I fully expect HD-DVD players to drop below $300 before the end of this year and below $200 in less than 2 years. If it takes Blu-ray three years to get to $299-$399 it will never survive, by then HD-DVD players will be $100. He is either wrong about the timeline, only talking to Sony?s pricing plans, or it?s all ready over.<br /><br />"When will Blu-ray players drop in price to become a mainstream product?<br />Glasgow: If you go back to when DVDs came into play, it took about three years until they got into price points of $299 to $399. I suspect it's about the same thing here with Blu-ray. I think it's going to take up to three years to get down to those price points, possibly a little longer. But I would assume it's similar to DVD."

[gamecheif]

BLU-RAY IN FLAMES

blu ray is the only thing hes taliking about foreal your not getting me to buy the system just on image im looking for gameplay and replay value not image but looks like when i buy ps3 im paying for the blu-ray player anyway see wats going to happen is they are going to come out with alot of games and over half of them are going to become crappy the same road ps2 went down. They thimk they getting over with graphics but that doesnt make up a game gameplay does. least with Xbox 360 you getting more quality and more fun factor with the system and the gameplay on most games are awsome.

[adlyb1]

Where Sony went wrong...

While I have always taken exception to Sony's arrogance over their technical prowess and their many attempts to push proprietary technologies on us (Mini-Disc, ATRAC, Memory Stick, etc.), the quality and progressiveness of their products made up for it...<br /><br />...until the entertainment divisions started calling the shots. More worried about protecting their precious content rather innovating with technology, they were slow to adopt digital anything and are still playing catch up.<br /><br />Sir Howard is from the same group that brought us these issues, so I don't expect any significant improvements to the situation.

[theprof00]

keep your millions

why dont yall just stay away and stop talking smack about a company that brought you the discman, and the walkman. Pioneers of the blue ray, the transistor radio, Betamax (a piece of hardware that was superior and is STILL used in the movie industries, it was the public that killed Beta,...for porn) The trinitron monitor(still produced today), with philips, they introduced the CD to the world...the CD and later the DVD. The brought SDDS and many other great products.<br /><br />The problem, is that Sony always spends all this money inventing superior formats, and a lot of people are just too damn lazy to pick up the newer technology until it is practically being given away.<br /><br />The millions that you speak of sir, is a minority. Much more people love Sony because they are always trying to create better hardware and this is a world where porn can hurt an industry, a world where companies can create pirating software (Bleem), and generally there are a million ways to take pot shots and take out lawsuits against a company that deserves better.<br /><br />IMO Sony is not failing right now, but if many of you took your own advice and looked at the historical aspect of Sony, you would realize that the populace, being tight with money and greedy, in one way or another, is what hurts Sony the most.