Green Switch Palace: Analysis-– and Meditations

“This is our only chance to change,” Kaz Hirai says. But what if Sony can’t?

By Marc N. Kleinhenz. Posted 04/20/2012 11:00 5 Comments     ShareThis

Green Switch Palace 3.0 Masthead

Let’s start with the news first, shall we?

Sony is, not to put too fine a point on it, in dire straits. It’s cut six percent of its global workforce, which translates to about 10,000 jobs (including all of Zipper Interactive, which was shuttered last month). It’s going to be in red ink for the fourth straight year in a row, and, even worse, the company had to more than double its expected loses for the fiscal year ending March 2013 to $6.4 billion– the worst showing in the corporation’s 67-year-history.

Kazuo Hirai, the former head of Sony Computer Entertainment America and, as of this month, the new CEO of Sony overall, has a plan, though, which he divulged just last week in his first public briefing as the big cheese: push big time into smartphones, digital imaging, and that funny thing called video games. Expand Sony’s toehold in the medical equipment industry by creeping into the diagnostic segment. Smash open those wonderful entities called emerging markets, which, in this case, turn out to be Mexico and India. Oh, and cut as much as possible out of the TV business, which hasn’t shown a profit since ‘04.

The icing on the cake? This turnaround will start to pay off for the global corporation in the form of a profit, no matter how (comparatively) meager, by March ’14–- or so the plan calls for. “I am determined to transform and revive Sony,” Hirai declared. “Sony will change. I’ve fully dedicated myself to” doing so.

The big question, of course, is whether or not Super Kaz can do so, at least in the realm of the gaming industry, which is at least slightly different from the rest of the business world (for now, at any rate). It’s true that part of the company’s problems have been partially bad timing, such as the flooding in Thailand that caused production disruptions this past year, or the ever-increasing yen that reduces income from Sony’s critically important exports. But it may also be that, despite such complications rippling into the (relatively) isolated pond that is gaming, there are some big splashes coming from within the dedicated market and radiating outward throughout the rest of the giant multinational conglomerate.

Kaz and Sony PlayStation 3 Slim Photo
This generation has been extended by the redesigning and repackaging of the PlayStation 3 as well as the 360 and Wii. Hirai may have hoped this would have helped the PS3’s fortunes more than it did, though.

And the biggest splash of them all may just end up being the one that is the least visible: time. The current generation of consoles, which started on November 22, 2005, with the release of the Xbox 360, is the longest-running the industry has ever seen. As it stands now, the Wii U will officially kick off the next gen later this year, but if it were any other time in videogame history, it would’ve already been turning three-years-old this fall. Microsoft and Sony claim that, given all the wonderful technology stuffed into their systems, they need all this extra time to allow developers and gamers to catch up, but the truth is that we simply don’t know what nearly doubling the normal lifespan of the generation will do to the market – particularly in the throes of a worldwide recession that refuses to (fully) die.

In case some proof is needed for such high-flying (and otherwise nebulous) hypotheses, one only has to look at Microsoft’s stuck-in-a-zombie-shuffle-pace of first- and second-party releases over the past two-and-a-half years, as well as the Wii’s reversal of fortunes–- although the console was literally impossible to find for nearly the first half of its lifespan, it’s long since been as popular as milk warmed over (which might actually be an apropos metaphor, as there are a healthy number of people out there who do, indeed, enjoy a glass of warm milk… which just may account for Nintendo’s unprecedented Black Friday showing last year). Without the added novelty of Microsoft’s Kinect, Sony’s Move, or Nintendo’s Wii MotionPlus, it’s dreadful to think what gamers would be doing with themselves since 2010.

Is there really a direct correlation between Sony’s plummeting bottom line and a longer-than-normal system generation? More than likely not; the twin facts of global economic depression and Sony’s penchant for making self-sabotaging decisions are more than enough to explain why the PlayStation 3, one of the corporation’s single biggest products in its entire global portfolio, has never been able to best the 360’s sales or the Wii’s mainstream word-of-mouth, even though, on paper, it should have several times over. And let’s not forget that Nintendo, a company completely insulated within the cozy confines of the gaming market, has long had a series of ups and downs that has had little (overtly) to do with much of anything else, really. But it makes for a fascinating topic to explore and issue to get into nerd bar fights over.

It also begs the question: whether because of a too-long-in-the-tooth-PS3 or not, what happens if Kaz cannot get enough of Sony’s shit together and the Japanese giant is forced to exit the game industry? Does it go gently into the night, like the by-then-long-irrelevant Sega, or does it take a chunk of everything–- and everyone –out with it? Will the Wii U and the Xbox 720 have the longest generation yet– the one that turns into infinity?

Meditate on this, I will. And so will Kaz, I’m sure.

Marc N. Kleinhenz has covered gaming for over a dozen publications, including Gamasutra and TotalPlayStation, where he was features editor. He also likes mittens.

5 Responses to “Green Switch Palace: Analysis-– and Meditations”

  • 1244 points
    lukas85 says...

    I am a nintendo fanboy, but i don’t wish bankrupcy for sony, because i believe that a good competitor can make the other companies to improve their productsw and i also love some sony games as well. I wonder how important is the videogame business in sony’s portfolio?

  • 150 points
    Lewis Hampson says...

    I heard that Sony is planning on switching it’s main long term focus onto consoles. So hopefully, in the long run they should be OK.

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