Playstation 4: Is Sony quietly exiting the console race?
Wednesday
Sony may be ever so quietly exiting the console race according to some recently released financial data. ( Raw financial data often more than not is a primary indicator, long before mainstream media gets the news, of a company's projected road map. )According to recent reports TOKYO (Nikkei)--Sony Corp. (6758.TO) shares have fallen 26% since hitting a year-to-date high in late May, as investors have become wary of the company's inward-looking business stance, The Nikkei Financial Daily reported in its Wednesday edition.What does all this mean in English?
Sony's stock ended lower Tuesday, with reports that it plans to sell a
cutting-edge chipmaking facility to Toshiba Corp. (6502.TO) as early as next spring failing to impress investors.
According to news reports, Sony plans to sell manufacturing lines that make the Cell processor to Toshiba for slightly less than Y100 billion. The move follows Sony's announcement last year that it intends to reduce spending on the next-generation chip to succeed the Cell, which is used in Sony Computer Entertainment Inc.'s PlayStation 3 video game console. Under a strategy of selectively consolidating its semiconductor operations,Sony plans to beef up its image sensor business while jettisoning the Cell.
"All we've heard from Sony recently are plans to quit something," said Eiichi Katayama, an analyst at Nomura Securities Co. "The company hasn't presented us with any new growth strategies."
It means that Sony for some reason or another will be selling the manufacturing lines that make the cell chip. However the biggest nugget of information to take away from this post is that Sony is now reducing its spending on the "next generation chip that will succeed the Cell presumably for Playstation 4. With the added competition that Sony now has in Microsoft and Nintendo, the last thing in world Sony would want to do is be technologically behind it competitors on the next hardware cycle unless planning to bow out of the hardware race.
Sony may be looking to pull a Sega and go multi-platform software only.
Is this the first signs that the Playstation Brand is on its way out? Only time will tell for sure.
Get a FREE PS3 AND Nintento Wii !
Labels: industry news, Playstation 3, Sony
posted by Wasted Rage @ 9/19/2007 03:25:00 AM,
22 Comments:
-
At 7:47 AM,
Tripster said...
-
I think that's a stretch. Does Microsoft or Ninty own the CPU fab, or the company that makes the CPU? Wait, it's a PPC design, right? All of them are, essentially.
That's IBM.
If IBM is committed to pushing the design of the CPU then Sony's fine. And I believe the Cell is co-owned by all three partners in that venture, IBM, Toshiba and Sony. -
At 8:39 AM,
said...
-
the last thing in world Sony would want to do is be technologically behind it competitors on the next hardware cycle
The PS2 was weakest of the previous generation. That didn't seem to affect sales all that much. -
At 9:04 AM,
said...
-
I can't wait for all those wussy PS3 fanboys to be crying that their precious Sony stops making systems.
And if Sony does a Sega and makes games for Xbox and such, it sure would be nice to get some of those PS exclusives.
If Sony was smart they would quit now and have a deal with Microsoft to make the next Xbox compatible with all the previous PS games. -
At 10:41 AM,
Davi said...
-
"I can't wait for all those wussy PS3 fanboys to be crying that their precious Sony stops making systems.
And if Sony does a Sega and makes games for Xbox and such, it sure would be nice to get some of those PS exclusives.
If Sony was smart they would quit now and have a deal with Microsoft to make the next Xbox compatible with all the previous PS games"
Sounds like someone here is a M$ fanboy who is secretly dying inside for a "PS3"... -
At 10:55 AM,
said...
-
I remember about two or three years ago there was talk about Nintendo going software only because of the bad sales of the N64....
-
At 11:20 AM,
said...
-
What a load of drivel! This may be an Xbox fanboys wet dream, but how can you possibly think Sony would throw away their biggest brand since Walkman?! Contrary to what some bloggers will lead you to believe, the PS3 is not in crisis, it has sold in proportion (given the March delay in some regions) the SAME amount of consoles as the 360 did in it's first year - despite the fact that the 360 had more games, the 360 was cheaper, and the 360 had no other next gen competition - in other words you could say that the PS3 is selling BETTER than the 360 did, and it's not even had it's first Christmas in most regions yet - the 360 is coming up on it's 3rd!
There's a little cost cutting exercise in business called outsourcing, this is where you outsource the production of something to a 3rd party and buy the finished product from them instead of making it yourself. If you actually looked into the deal they are CONSIDERING it includes a joint venture to produce the PS3's processor.
As for the spending on R&D this may be due to deciding to source third party technology for the PS4 - like Microsoft and Nintendo do now - or perhaps they've decided that the Cell is powerful enough to see it through another generation, after all it's taken a long time for developers to find their feet with the current Cell, do Sony really want to go and reinvent the wheel again just as developers really start to get to grips with it? I think it's much more likely that Sony would deliver a more powerful version of the current Cell, this would also keep costs down in the next console cycle and mean developers could hit the ground running to prevent a repeat of the 1st years games deficit the PS3 has had.
The Games Industry is worth billions and is growing each year - when you have a huge games development resource, own one of the biggest brands in the industry, and are only one of three major players - why would anyone with even a GCSE in Business Studies decide it would be a good idea to pull out if it?
You appear to be completely confusing Processor development (not a core Sony business) with Console development (a core Sony business). This article is the same as reporting that Microsoft are pulling out of the Operating System market because you've spotted on a memo that says they're selling off a DVD pressing plant!!!!
The sad fact is, knowing the mentality of people (especially people with Wii60 fanboy blogs) this story will be replicated around the net as if it's fact, even though it's complete crap! -
At 11:25 AM,
said...
-
So Sony gets a billion in cash and can still have it's supply of chips made. The author of this article did poor research and is speculative at best. Did he know that the ps1/2 is what kept Sony afloat for the past few years? If this means anything, it shows that Sony is getting cash ready for something else that is has in mind and that it may lead a few developers being bought up for first party games. Or they could use the cash to invest in any of their other interests. Microsoft is still losing money on its console, Nintendo is making a fortune on theirs, and sony is trying to cut costs and get a user base. If I was Sony, I'd use some of that cash for an ad campaign.
-
At 11:30 AM,
said...
-
Please fire the American Sony CEO! Sir Howard Stringer is either someone not qualify for his job or someone seeking for Sony bankrupt.
The name of SONY has shifted in people mind from Top-Quality to Average or poor goods maker!
The only one we can blame is the CEO. He his the one making the top decision. And so far, the results show that his decision just bring more troubles.
No long term vision, just short term plan to stop bleeding. But the reality is that the strategy apply is soo bad that it's falling appart.
That's my point of view as a customer. -
At 11:36 AM,
Bryan said...
-
This theory is plain garbage.
The capital needed for semiconductor processing and development are enormous. Even Texas Instruments, a long established leader in the semiconductor world, is starting to leave the processing side as it begins moving wafer production and its costs to out source fabs like TSMC. Getting rid of the Cell fab seems to me like the right thing to do for Sony. -
At 11:58 AM,
said...
-
@ reply 8
Actually Sir Howard Stringer is Welsh not American - The "Sir" in his name should have at least given you a clue he was from somewhere in the UK!
Also the PS3 is a quality piece of kit, and has a build quality that far exceeds that of their competitors. In addition their BRAVIA range is also enjoying a boom period.
If SONY have shifted to an "Average or poor goods maker" then what the hell does that make Microsoft who have created a console of such poor quality it's practically guaranteed to fail, yet they refuse to do a recall and instead extend the warranty to 3 years and set up a $1BILLION provision against future repair bills!
In my opinion the biggest looser of this generation will be Microsoft, if anyone would be a candidate to pullout it would be Microsoft who have the PC and PC gaming market to fall back on. Microsoft has lost a ton of money so far with the Xbox. -
At 12:11 PM,
said...
-
This article is rampant speculation. It looks like you are trying to string together a bunch of unrelated events and trying to turn this into evidence that the PS4 won't exist.
Somehow,
I doubt that Sony will release a technologically weak console. Also, the Wii doesn't seem to be doing too badly despite its lack of power.
Basically, I call this article out of trying to create news and sensationalizing stories that shouldn't be. -
At 12:28 PM,
said...
-
Maybe the poster should read this article and see how a grown up with some common sense reports this news:
http://www.businessweek.com/globalbiz/content/sep2007/gb20070919_615854.htm?chan=top+news_top+news+index_global+business
So Sony could get $870 Million AND reduce the production cost of the PS3 (which makes up 1/10 of the producion costs). Sounds like good business sense to me!
It will also give them the resources they need to reduce the PS3's price further and increase it's marketing or games development, allowing them to break even in a year and a half and make a nice profit for the remaining life cycle. A strategy that has already worked for their BRAVIA LCD's
And you think this sounds like the type of business a company would be wanting to shut down? HAHAHAHAHA! -
At 12:59 PM,
said...
-
Litte Big Planet will be the PS3's prime system mover come 2008.
-
At 2:03 PM,
said...
-
What PS exclusives? PS is losing all of their exclusives because it isn't worth it to their game manufacturers since the PS3 has only sold 3 million something units compared to 9 million xbox 360 and wii...
Sony is going down the hole quick... Not just gaming but also Blue ray. Blue ray costs more than 4x as much to make as HD DVDs and according to all the movie companies it is harder to code for... -
At 3:54 PM,
said...
-
Whoah, must have been really desperate for a traffic driving bullshit story eh?
-
At 5:04 PM,
said...
-
From reading all this this is my opinion and I believe it is the same to the other PS fans out there who have not yet got their hands on a PS3. But in my opinion People like me are just waiting for the PS exclusive games to come out before they actually get the console. Least that is what I am doing atm.
-
At 7:14 PM,
said...
-
its true that outsourcing would "save for growth" but outsourcing to a rival company?
The HD DVD standard was jointly developed by Toshiba and NEC. Sony ps3 is what is going to win the next gen format war and placing your "trump" card in the hands of your rival doenst seem the most sensible of ideas.
but, saying that, i dont think sony would be stupid enough to leave out some sort of clause in the contract which will make sure they get chips.
just a thought though -
At 8:50 PM,
said...
-
Erm, given that Nintendo's wii is technologically behind and yet ahead in sales, perhaps being in that position in the future is anything but the last thing Sony would want?
Indeed, a good argument could be made that it's precisely the technology lead of the PS3 that's caused Sony's problems. Even if that appears questionable against the 360, that does have a large %age of its extra cost for hd-dvd and so on as optional extras rather than price-inflating built-ins. -
At 1:17 PM,
said...
-
Bwwaaahahahahahaha...
...it's too bad that Sony has been so impotent and pathetic as of late with its PlayStation brand. If anything, they've given service to everyone paying attention on how not to handle a system launch...as well as how not to handle 1st party software, how not to handle next-gen media formats, how not to balance finances, how not to advertise, how not to make a next-gen game system...and last, how not to manage people and departments.
The ignorant Sony fanbois can go scream all they want, but the fact of the matter is that they're being outsold in every way possible, even when Sony had a price drop advantage over the XBox 360. But it's okay...those idiot Sony fanbois that dropped $600 on a piece of junk will still be welcomed when they pick up an XBox 360 and learn what a real next gen gaming system is like. -
At 4:49 PM,
said...
-
FUD at its best.......go do some real investigative journalism and them come back and tell me you actually believe that story.
-
At 3:31 PM,
said...
-
"how can you possibly think Sony would throw away their biggest brand since Walkman?!"
@Anonymous, 11:20 AM
Um, because "their biggest brand since Walkman" lost them $2 billion last year? $1 billion in the final quarter alone?
Because they continue to bleed money in 2007?
Sony is not like Microsoft, they don't have a monopoly to fall back on when they start losing billions upon billions of dollars.
Now they've sold off their chip fab.
They took their only profitable division public.
They took out a $700 million loan.
Sony is strapped for cash and if the PS3 / Blu-Ray market doesn't turn around in the next 12 to 18 months they're going to be out of money with no more assets to sell off. -
At 9:30 PM,
said...
-
I would be really shocked if Sony stops making hardware. I don't consider the PS3 a bomb either. And from what I have been reading, now that the price is more inline with the other consoles, the sales are picking up. I think Sony PS3 is going to have a great Christmas.
Do you remember a system called the Gamecube? You didn't see Nintendo running away because they were in 3rd. Nintendo stayed in 3rd too. Now, they are in 2nd place. Xbox is only in 1st because they had a whole extra year to move ahead of the PS3. I think Sony is just now getting all of the ducks in the row and is about to kick ass left and right. Its a long time coming too. No doubt they have really fumbled the ball here early on. Now its time to correct the mess and lets get Blu-Ray to the top. So go buy your PS3 today and pick up Call of Duty 4 too -- its awesome!!!!
Links to this post:
The Authors
Brock Raybon - Wasted Rage
Brock is a business owner by day and avid gamer and blogger by night. He writes about console and pc gaming, hdtv and technology news. Definitely a "CONSOLE FANBOY" born with a 2600 joystick in his hand.
Chris Lugo - Master Sinwave
Chris works in customer services by day and moonlights as a hardcore techie by night. He started gaming as a young lad with his trusty Atari and now plays it all from console to hardcore pc games. HE GIVES CONSOLE AND PC GAMES A FAIR SHAKE.
About This Blog
This blog is a multi-author blog devoted to console gaming, pc gaming, hdtv, and tech news. Its purpose is to keep fellow gamers and tech heads as to whats going on in the industry.
Contact Us
Feel free to contact us anytime at
Fo Show!
