News Article

PlayStation 4 May Well Be Make or Break for Struggling Sony

Posted by Kell Andersen

Not playing around

We recently reported on Sony's less than successful second quarter financial results – a respectable ¥3.5 billion ($35 million) profit in the first quarter was followed by a dismal net loss of ¥19.3 billion ($197 million) in the second. The poor performance was attributed to a sluggish turn by the organisation's movie division, Sony Pictures.

These numbers are no doubt giving the company's president Kazuo Hirai a major headache – and a Bloomberg report reveals the extent of this. Tokyo-based investment officer Kazuyuki Terao notes that Hirai's hold on the business is tenuous. "It seems like Hirai is standing on ice that’s melting right under his feet,” Terao said. "The market is changing a lot faster than anyone expected, and Sony hasn’t been able to keep up.”

But the recently appointed president has a plan for the Christmas period that's set to get the company back in shape again, and the impending PlayStation 4 is right at the forefront. As previously announced, Sony aims to sell five million next generation consoles by March 2014, and hopes to supplement this with annual PlayStation Plus subscriptions.

While pre-orders are certainly looking strong, the PS4's performance this holiday season will still be closely watched says analyst Damian Thong. "How fast the PS4 comes off the blocks will be a closely watched indicator of Hirai’s performance," he explained. "If they miss targets, there will be a lot of questions about whether they can turn things around.”

What do you make of these troubling trends? Are you picking up Sony's next-gen super machine at launch? Sound off in the comments section below.

[via bloomberg.com]

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User Comments (13)

BornOfEvil

#1

BornOfEvil said:

I'm not worried, Sony has a way of bouncing back from these kinds of situations. I'm just surprised Sony Pictures lost so much, Olympus Has Fallen, Cloudy With a Chance of Meatballs 2 and Whitehouse Down were all very successful if I'm not mistaken.

KALofKRYPTON

#2

KALofKRYPTON said:

New Spider-man film on the way too, should bring some pennies in.
Selling Spidey film rights to Marvel could be a bit of easy money.

Bliquid

#3

Bliquid said:

These days you never know where the market goes.
Very few are able to surf on it for a long and stable time.
Apple comes to mind first, but even they are always under the spotlight, for good or bad (especially since Jobs' passing)
Nevertheless, i have a feeling that PS4 is going to be successful.
But hearing about Square Enix's complaints about multi million unit games like Tomb Raider, Hitman and so on, i'm not sure if my idea of success is the same as these enterprises.

Scollurio

#4

Scollurio said:

What I really hate is, since its all the same company really, if one department of sony sucks, and there are actually many departments that are not doing so well, I've heard their television and home entertainment departments aren't doing so good either, it will "pull down" the PS4 brand. I don't want PS4 to sink if it could swim on its own only because its pulled down by so much ballast...

Shaolin

#5

Shaolin said:

The commercial landscape is far more competitive nowadays with the likes of Samsung and Huawei attacking across a broad range of products and in various markets. In the past you could release a dud product and still make money but nowadays the market will punish you much more severely for those mistakes.

Sony will never disappear and the PlayStation brand will always be strong. Having said that, Sony needs to improve it's standing in order to retain its key talent and in order to obtain finance it needs for Research & Development on future products and services. Samsung is accumulating large cash reserves and is recruiting some unbelievable talent and it's this type of company that Sony will be concerned about right now.

rjejr

#6

rjejr said:

I think the PS4 will sell well this holiday, heck even the Wii U sold well last holiday, the bigger question is how will it due in the winter. inFamous 2 and W_D should help keep the momentum going though. And having it launch in Feb. in Japan guarantees a sales boost then as well. I don't know if that was the plan but it should still be a net positive when the time comes. I just think the PS4 has too much going for it, and the $499 X1 price doesn't hurt.

That said, Sony may need to rethink it's Vita business. The 3DS shows that gaming machine handhelds can still succeed, and I think even the PSP is selling well in Japan, but having a high priced system w/ an even higher priced proprietary memory card and a lack of must have games isn't going to work. Drop stand alone handhelds and just make phones or tablets or something. Or a $100 Vita 2 w/o all the bells and whistles that uses SD cards. I think even a VitaGo could succeed now as people are more used to digital only as long as it works w/ cheap standard SD cards. The PSPgo was too far ahead of its time.

Itachi

#7

Itachi said:

If Sony really wants to sell 5 million units by March then they better get them PS4's back in stock, cause I'm ready to pre order one right now and can't find one anywhere. I imagine I'm not alone in this.

I think Sony is going to be alright because there Playstation brand is still strong and their mobiles are improving as well. However, they need to do something to pick things up at Sony Pictures and boost their hardware sales. Sony's name seems to have gotten old or played out in comparison to the Apples and Samsungs of the world. Perhaps the success of PS4 can be the beacon of light they need to remind people they're still a trusted brand and get back on top again. Sometimes it all starts with that one giant piece of the puzzle. Ever since Apple came out with iphone business has been booming for the company and expanded to their other products. The same can happen for Sony with PS4 because PlayStation is still very very popular.

Ginkgo

#8

Ginkgo said:

I think that it is less a question of PlayStation saving the company, and more about its movie division not sinking it.

Itachi

#9

Itachi said:

@Bliquid I think this is the reason why Sony is reaching out so hard to Indies. They understand the strain that big budget titles puts on developers and not to mention the impact on price it has for gamers. Indies are becoming more and more as a medium, meaning they are able to fill that gap with smaller and cheaper yet innovative games.

When you look at the PS4's launch games like Kill Zone and BattleField instantly come to mind. But I think once people get to experimenting with the smaller games like Resogun, Octodad,Transitor, those are the kind of games that will even everything out and lessen the strain.

JayMiller1988

#11

JayMiller1988 said:

Ugh, this is the kind of thing that makes me fearful for Sony. I have been a faithful customer since PS1. I hope that Sony can turn this around. I hope PS4 isn't the last console we see out of them, their consoles are always amazing.

WolfSpirit

#13

WolfSpirit said:

getting day one worth it for inFamous series plus i like some of the indies(and they are way cheeper)

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