Is A Perfect Storm Sinking the PlayStation Vita?

[hdinred]

New York Times: Sony Is 'In the Fight of its Life'

[Badger3920]

The company needs to be stream lined. Fire the non-cooperative, stubborn, old guard of territorial engineers the article talks about; hire new people with new ideas, and coordinate from the top down with a strategy. Condense product lines down to a simple 2 or 3 versions of any given unit (like apple's iPhone only has 2 versions of a current model at any given time), and either figure out how to make great LED TVs and sell them at competitive prices, or get out of the TV business (which, to be honest, is probably the better idea since that space is so crowded and low margin anyway).

This whole "old japanese pride" thing can have no place in the company if they hope to fix this.

[Bane]

The company needs to be stream lined. Fire the non-cooperative, stubborn, old guard of territorial engineers the article talks about; hire new people with new ideas, and coordinate from the top down with a strategy. Condense product lines down to a simple 2 or 3 versions of any given unit (like apple's iPhone only has 2 versions of a current model at any given time), and either figure out how to make great LED TVs and sell them at competitive prices, or get out of the TV business (which, to be honest, is probably the better idea since that space is so crowded and low margin anyway).

This whole "old japanese pride" thing can have no place in the company if they hope to fix this.

Xbot .

[rm082e]

Makes me wonder if the rumors about Sony going with a more traditional AMD architecture for the PS4 are in part because Sony wants to be able to spin off the PlayStation division into it's own independent entity, no longer tied to Sony at large. That would be completely fucking crazy, but if that's a Business Unit that is making money while the others are not, I could see them spinning it off and then liquidating departments that aren't producing, like the TV division.

[Badger3920]

Makes me wonder if the rumors about Sony going with a more traditional AMD architecture for the PS4 are in part because Sony wants to be able to spin off the PlayStation division into it's own independent entity, no longer tied to Sony at large. That would be completely fucking crazy, but if that's a Business Unit that is making money while the others are not, I could see them spinning it off and then liquidating departments that aren't producing, like the TV division.

No, you wouldn't want to do that if that was their plan. Remember that huge loss Sony recorded recently, and it turned out to be a couple billion dollars lost on paper due to an asset write down?

Well if their goal was to actually liquidate some of their divisions and get down to only the profitable ones like Playstation, you would want to keep the profitable business because it could take advantage of the tax benefits resulting from all the losses from the other divisions. Those divisions are creating new deferred tax assets - which are financial instruments which Sony can use as a tax shelter in the future against its profits. But it does need to turn a profit to use those.

More likely, they will sell/liquidate/discontinue divisions which aren't making money. Going with more traditional architecture on the PS4 is probably just them trying to ensure that the PS4 won't be involved in the same quagmire the PS3 was with costs for years. Sony needs the PS4 to be profitable almost immediately, and they also know they'll need to play the pricecut game with MS - so they need to launch with something that loses very little cash (low subsidy) on hardware costs, will be profitable within a year or so, and can withstand a pricecut pretty quick off the bat.

If there's one thing we learned this gen, it's that if you're somewhat in the same ballpark as the other HD console insofar as graphics goes, it doesn't matter if you're not as bleeding-edge. The devs will make the games geared toward the lower common denominator so their games get maximum exposure. If I were Sony, I'd take that as a green light to simplify the PS4, ignore a lot of hardware bells and whistles in favor of inexpensive architecture, and focus on very pleasing software (GUI, menus, friends list and connectivity / etc) as a tradeoff. Make the machine do more with less.

[CorruptedDragon]

No, you wouldn't want to do that if that was their plan. Remember that huge loss Sony recorded recently, and it turned out to be a couple billion dollars lost on paper due to an asset write down?

Well if their goal was to actually liquidate some of their divisions and get down to only the profitable ones like Playstation, you would want to keep the profitable business because it could take advantage of the tax benefits resulting from all the losses from the other divisions. Those divisions are creating new deferred tax assets - which are financial instruments which Sony can use as a tax shelter in the future against its profits. But it does need to turn a profit to use those.

More likely, they will sell/liquidate/discontinue divisions which aren't making money. Going with more traditional architecture on the PS4 is probably just them trying to ensure that the PS4 won't be involved in the same quagmire the PS3 was with costs for years. Sony needs the PS4 to be profitable almost immediately, and they also know they'll need to play the pricecut game with MS - so they need to launch with something that loses very little cash (low subsidy) on hardware costs, will be profitable within a year or so, and can withstand a pricecut pretty quick off the bat.

If there's one thing we learned this gen, it's that if you're somewhat in the same ballpark as the other HD console insofar as graphics goes, it doesn't matter if you're not as bleeding-edge. The devs will make the games geared toward the lower common denominator so their games get maximum exposure. If I were Sony, I'd take that as a green light to simplify the PS4, ignore a lot of hardware bells and whistles in favor of inexpensive architecture, and focus on very pleasing software (GUI, menus, friends list and connectivity / etc) as a tradeoff. Make the machine do more with less.

We knew that last gen also, when games were tailored toward the ps2 and not the Xbox, and Xbox multi platform games suffered because of it sometimes.76

[rm082e]

If I were Sony, I'd take that as a green light to simplify the PS4, ignore a lot of hardware bells and whistles in favor of inexpensive architecture, and focus on very pleasing software (GUI, menus, friends list and connectivity / etc) as a tradeoff. Make the machine do more with less.

So you're saying they should design like Americans, not Japanese...?

I completely agree.

[Badger3920]

We knew that last gen also, when games were tailored toward the ps2 and not the Xbox, and Xbox multi platform games suffered because of it sometimes.76

If it was unclear then, it seems pretty clear now. It will be interesting to see how the Wii U affects this gen. Maybe devs will just make games that scale more easily. That'd by my bet.

So you're saying they should design like Americans, not Japanese...?

I completely agree.

Yes. Right now, they're not really in a position for expensive innovation - so for the PS4, make things shiny and streamlined but go with what's cheap and works.

[Averry]

If there's one thing we learned this gen, it's that if you're somewhat in the same ballpark as the other HD console insofar as graphics goes, it doesn't matter if you're not as bleeding-edge. The devs will make the games geared toward the lower common denominator so their games get maximum exposure. If I were Sony, I'd take that as a green light to simplify the PS4, ignore a lot of hardware bells and whistles in favor of inexpensive architecture, and focus on very pleasing software (GUI, menus, friends list and connectivity / etc) as a tradeoff. Make the machine do more with less.

This is precisely why I think Sony is still screwed. There's no way they can compete with Microsoft on this issue, who has a bigger ecosystem, and makes 6 billion in profit a quarter from selling SOFTWARE.

I think the only thing on the ecosystem side that Sony could do is build some Android ecosystem structure into it to have the Google Play video and music ecosystem, and that makes sense because if you have a Sony phone or Tablet, it's still tied into that ecosystem. I did just see that Sony gobble up a huge amount of back catalogue from EMI. Sony could leverage that, but it will never make up the difference if people don't GO to that ecosystem to purchase the music.

Windows 7 is obviously terrible evidence of Microsoft making a cool GUI, and you could make huge arguments for how the Xbox experience is really lacking. I personally hope Microsoft is holding back on the Xbox until we get a knew console. But I think the only reason Microsoft even did a redesign is to tie Kinect integration in natively, and to some degree to match the stylings of Windows Phone and Windows 8.

I think Sony is screwed as evidence by the fact that they use everybody else's operating systems and ecosystems because they have none of their own. And they can't even do that as well as Samsung does. I'd feel much different about all of this if Sony as a whole was a healthier company, but I believe that their gaming business is doing fairly well IN SPITE of the rest of Sony dragging it down. Chalk it up to their great developers basically.

[Badger3920]

This is precisely why I think Sony is still screwed. There's no way they can compete with Microsoft on this issue, who has a bigger ecosystem, and makes 6 billion in profit a quarter from selling SOFTWARE.

Opinions are opinions, but I think this is nonsense so far as they go. I think it's a lazy argument when people bring up the "Well sony is a hardware company and ms is a software company, so sony will have trouble with software and MS will have trouble with hardware." Sony makes all sorts of software ranging from games to programs used to run their hardware. They've also designed excellent, award-winning GUI's (XMB). Microsoft also hit a homerun on hardware with things like the slim, the zune, and the OG xbox. Each company has made obvious missteps as well that need not be pointed out.


Also, the argument is further undercut because each company outsources significantly for help. Neither build their own gaming consoles for example; that's all done in china.

I think Sony is screwed as evidence by the fact that they use everybody else's operating systems and ecosystems because they have none of their own.

That doesn't make any sense. They aren't an OS company, and there isn't any reason why licensing a tried and true operating system is a bad idea.


You're kind of a gadgets and gizmos/phone type guy, so I can see why you'd place a lot of importance on sony building all their own OS's and cogent ecosystems for some reason - but in the end, that's completely unnecessary and probably inefficient for the company as a whole. There isn't a reason to reinvent the wheel when there is a whole market place of great companies and ideas for OS's and you can pick and choose your favorite one and have it customized. Over the millions of units that would use such an OS, the cost would be a very marginal licensing fee that is mostly absorbed by the consumer.


The problem, at this point, isn't bells, whistles, and windows 8. It's corporate structure, inefficient management systems and compartmentalization, depressed CE markets, low margins and high costs, and a terrible Yen currency conversion rate.

[Averry]

Opinions are opinions, but I think this is nonsense so far as they go. I think it's a lazy argument when people bring up the "Well sony is a hardware company and ms is a software company, so sony will have trouble with software and MS will have trouble with hardware." Sony makes all sorts of software ranging from games to programs used to run their hardware. They've also designed excellent, award-winning GUI's (XMB). Microsoft also hit a homerun on hardware with things like the slim, the zune, and the OG xbox. Each company has made obvious missteps as well that need not be pointed out.


Also, the argument is further undercut because each company outsources significantly for help. Neither build their own gaming consoles for example; that's all done in china.



That doesn't make any sense. They aren't an OS company, and there isn't any reason why licensing a tried and true operating system is a bad idea.


You're kind of a gadgets and gizmos/phone type guy, so I can see why you'd place a lot of importance on sony building all their own OS's and cogent ecosystems for some reason - but in the end, that's completely unnecessary and probably inefficient for the company as a whole. There isn't a reason to reinvent the wheel when there is a whole market place of great companies and ideas for OS's and you can pick and choose your favorite one and have it customized. Over the millions of units that would use such an OS, the cost would be a very marginal licensing fee that is mostly absorbed by the consumer.


The problem, at this point, isn't bells, whistles, and windows 8. It's corporate structure, inefficient management systems and compartmentalization, depressed CE markets, low margins and high costs, and a terrible Yen currency conversion rate.

Apple hasn't had any of these problems, because they've found ways to profit off of similar hardware because of the ancillary value that they've added to their products. The Xbox has been successful because of ancillary value.

Software adds ancillary value, and Its my opinion that Microsoft has more leverage in that department. I also see Android and iOS eventually being on products that compete in home gaming, and then eventually Nintendo gets squeezed out, and then Sony...and even Microsoft if they dont' start seriously penetrating the ARM space by the end of the year.

If you can tell me how it's not about bells and whistles I'll understand, but form the Wii's early success, to the iPhone's stable success against better spec'd Android devices, to whatever else, all's I see is the consumers flocking to bells and whistles, perceived or not.

[Badger3920]

Apple hasn't had any of these problems, because they've found ways to profit off of similar hardware because of the ancillary value that they've added to their products. The Xbox has been successful because of ancillary value.

Well Apple is apple, and they've become (like google and facebook before them) the exception to the rule, or even the new standard setter etc. Apple isn't like MS or Sony insofar as consoles etc, so there's no real analogy there.

Software adds ancillary value, and Its my opinion that Microsoft has more leverage in that department.

For console operations, it's either hit or miss and it seems organic or it doesnt. MS definitely did a better job (outside of GUI) this generation than Sony did. That's because the network integration was a main focus from the get-go and it was hardcoded in from the beginning. Sony had to make it up as they went to compete and, while they eventually got to a point where the difference was negligible, I agree with you that MS had an obvious difference there for quite some time.

However, given the state of things now - it's pretty much hit or miss. MS has made it their mission to add all sorts of services etc to their ecosystem, year after year, for the last couple of years. And yeah, they haven't really gotten anywhere with it. Their bread and butter has been the way they handle parties etc.

Basically, each company is firmly in the space now. Designing GUI's and party systems for each console will be a priority for next gen. So long as the results work for each company, the differences and advantages will be largely, as you said "ancillary."

I also see Android and iOS eventually being on products that compete in home gaming, and then eventually Nintendo gets squeezed out, and then Sony...and even Microsoft if they dont' start seriously penetrating the ARM space by the end of the year.

Pretty unsure what you're talking about here. Nintendo and Sony are going to be squeezed out of gaming and MS is going to remain? This sounds like heavy fanboy speculation.

If you can tell me how it's not about bells and whistles I'll understand, but form the Wii's early success, to the iPhone's stable success against better spec'd Android devices, to whatever else, all's I see is the consumers flocking to bells and whistles, perceived or not.

Sony's problems are not bells and whistles, they're corporate management and exchange rate issues. That's pretty obvious from the financial articles floating around. Talking about stuff like "well MS will make the next xbox really pretty and throw windows 8 in there" is pretty much the least of Sony's worries. Pretty GUI's is a space theyve done well with etc etc.

[Almril]

Sony's problems are not bells and whistles, they're corporate management and exchange rate issues. That's pretty obvious from the financial articles floating around. Talking about stuff like "well MS will make the next xbox really pretty and throw windows 8 in there" is pretty much the least of Sony's worries. Pretty GUI's is a space theyve done well with etc etc.

Bells and whistles isn't the term I would use. But Sony really doesn't know what the consumer wants anymore. The Vita is the kind of product an insular stubborn company makes. Consumers want integrated and innovative products that do everything, and instead Sony makes an expensive gaming only system. And not surprisingly it's a complete disaster and a total fail. Now they have to go into Nintendo mode and cut the price to sell units but make no money. While Apple makes $11 billion in profit a quarter and eats into their market. It's just brutal at this point.

[Badger3920]

Bells and whistles isn't the term I would use. But Sony really doesn't know what the consumer wants anymore. The Vita is the kind of product an insular stubborn company makes. Consumers want integrated and innovative products that do everything, and instead Sony makes an expensive gaming only system. And not surprisingly it's a complete disaster and a total fail. Now they have to go into Nintendo mode and cut the price to sell units but make no money. While Apple makes $11 billion in profit a quarter and eats into their market. It's just brutal at this point.

Well, some of what you're writing about, I already wrote about. They're suffering from a compartmentalized firm with territorial and fragmented management. To turn this around, part of what they need to do is get rid of that. Also, for much of this gen, they had huge issues communicating things to audiences through marketing. They really need to figure out (whether it's in house or through a good firm) how to market, and how to market test.

I dont know enough about the vita to really comment on it.

[Ergo-Proxy]

Bells and whistles isn't the term I would use. But Sony really doesn't know what the consumer wants anymore. The Vita is the kind of product an insular stubborn company makes. Consumers want integrated and innovative products that do everything, and instead Sony makes an expensive gaming only system. And not surprisingly it's a complete disaster and a total fail. Now they have to go into Nintendo mode and cut the price to sell units but make no money. While Apple makes $11 billion in profit a quarter and eats into their market. It's just brutal at this point.

So why does the 3DS sell more than the Vita? Because it does more? Because its more innovative? Does a 3D screen that doesnt change the way we play games really cut it?
Its the lack of content that really hurts.
Disaster and a total fail are very strong words unless you are talking about Japan which is obvious again why it doesnt do well->Lack of content.
Vita wasnt supposed to compete with Apple. Sony makes other products to compete Apple and has a hard time succeeding for the reasons Badger explained.
If Vita was supposed to compete directly with Apple's products it would have been a tablet or a phone and its gaming capabilities would have been atrocious, like the majority of cheap tablet and phone games.