STUDIO 360

Can Sony Survive?

After Sony announced job cuts for it's electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview with the BBC: "Sony doesn't have any core businesses that generate stable profits". But could the Playstation console help Sony?

Even though, some people may point out that ever since the Playstation 3 release in 2006, the console hasn't been making a profit. This is because of the simple fact that Sony are selling the consoles for less than it costs to make them. And it's been like that since the release date, Sony dropped the price of the console on purpose so that they could try and break into the market.

Although this may seem rather odd, Sony have used this tactic every time they release a console, even though the competition was tough, the did it with the Playstation 3.

Their plan is that they released a high specification console into the market at a loss, but because of the spec, the console will last many years, making them profit some years on. But will they come through on top this time? With the high pressure competition of the Xbox 360 and the new market of Nintendo Wii, will Sony manage to make enough profit to cover their losses?

The dilema is that the price of the Playstation 3 will not be reduced until Sony start to make a decent profit. However as the consoles price is alot higher than the other consoles on the market, they won't get a huge section of the overall console sales, which, in turn will cause them to loose money for longer.

Although it all sounds a bit down and bleak for Sony, they do have one upside, Blu-ray. It was lucky for them really that Blu-ray came out on top of the DVD battle. If HD DVD had won the DVD battle, it would have been even worse for Sony has their console would not have any edge over it's competition.

So, currently, it's not looking good for Sony, also, with their release of Playstation Home, their new online 3D community, which is already being shot down by Microsoft and EA. Both of them have said that Sony's attempt at an online community is outdated and not directed.

Aaron Greenberg, a manager at Xbox 360 game console division, stated: "When they unveiled it, it seemed innovative. I think what's happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.".

Trip Hawkins said: "I can't tell if they're going towards this mass market idea...or if they're being lured into essentially trying to compete with Warcraft or Second Life".

After Sony has spent alot of time and money on their new online community, it has just been shot down, personally to me it just seems like an idea of earning money, there are several things within the new world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm sure that all gamers will hate being spammed with adverts while they walk around.

Overall, the future is not looking good for Sony, they are betting that the Playstation 3 will sell enough to make them money, which it currently isn't, so they won't reduce the price of the console until it is, but because the price is too high, buyers are being turned off. Who can tell what position Sony will be in if their Playstation 3 console doesn't start sell more units.

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