The PlayStation Company: why Sony should ditch almost everything else

It’s funny how times change. Twenty years ago, the PlayStation was a skunkworks product that a renegade faction within Sony had just fought to get released. Now here we are in 2015, and Sony CEO Kaz Hirai — a former boss of the PlayStation division — has announced that the company is essentially going to stop trying to grow its consumer electronics businesses beside the PlayStation 4. The PlayStation isn’t only Sony’s last great product; it might as well be Sony’s only product.

[Foehammer]

Considering that Sony has a couple other division that make more profit, i.e. Movies, Insurance, solid sate devices, this article doesn't make any sense.

[tinynuggins]

I think Sony's safest bet is to keep their eggs spread out a little bit. Just not TOO far spread out. Nintendo is the only company to survive exclusively within the console market. Everyone else is long gone. Sometimes all it takes is 1 bad system to sink a company.

[never4get]

Sony TV + PlayStation 4

[breakpad]

i think PSNOW is bad, project Morfeus seems dubious and relying heavily on online features/net for revenue is also not a good move ...quality always matters and for this reason and only combined with its abundance in PS platforms ,Playstations were always succesful ...the same perspective must follow on other departments (at least their electronics s are still unmatched for their price no matter the competition

[Christopher]

Agreed. Looked at that graph and went... uhh... are we looking at the same thing here?

I'm really sad about sony's mobile department. The Xperia devices are just great devices and really warrant more attention than they have garnered. Perhaps what they should do is combine mobile gaming and phones/tablets into one. Bring the Xperia products into the PLaystation fold and make them both gaming devices and smartphones?

I just really don't want to see such great products fall by the wayside because everyone wants whatever Apple throws at them.

[TWB]

Agreed on both points.

Im going to buy a new phone this year (currently still using Xperia Play from 2011) and Im looking at the Xperia phones. My play has been a very reliable and durable phone which is why Im planning on to continuing with the same brand.

Also as an Play owner, I think Sony should give another try at the XPlays concept and/or put out regular phone models with only the L and R buttons which could make a big difference in casual mobile gaming (removing two essential functions like jump and attack from the screen and putting them on physical buttons).

[Immorals]

Sony has good phones, but they aren't done in a great way. Releasing a new flagship 6 months after their last model was a massive mistake. It's bad enough certain companies do a yearly release with barely changed devices.

[Christopher]

@Immorals In the last two years, Sony has released fewer new models/upgrades than their main competitors.

I get what you're saying, but I think the Z3 was more in line to meet demands by carriers and not to just release a new phone for the heck of it. And, even then, it isn't unlike Samsung to release tons of new models on an annual basis. Though, admittedly, all of them have slowed down in the last 6 months since I think they've all reached a point where the gains are greatly diminishing as far as tech potential goes.

[pwnsause_returns]

The xperia is a fantastic phone that is being hugely overlooked for obvious reasons..... Where are the ads?

[XanderZane]

I agree with you.

"PlayStation is different. To be clear, the PS4 is the only truly compelling product that Sony sells today. "

That's not true, as Foehammer says. This article acts like Sony only needs the Playstation products to survive and we know that's now the case. If Sony only had the PS3 and PSP last gen, they would have been close to bankrupt by the time the generation ended, as the PS3 literally lost the company billions. Sure the PS4 is doing much better this generation, but it still not making the kind of profit it needs yet to sustain the company into the future. It costs millions and million to keep making software and the PS4 hardware.

Also, the PS2 didn't sink SEGA. SEGA sank themselves. They released a great system and had awesome games and decent support, but didn't have the funds to keep supporting it and they weren't selling nearly enough systems or software fast enough. This is a very biased article coming from someone who must not have worked in the gaming or electronic industry before.

[kwandar]

Sony may soon run out of choices. They have already had to cancel their dividends, and they need to decide what they are staying in or getting out of, if they wish to remain viable.

They could sell Playstation's IP (perhaps) to Nintendo or MS, but that is a less likely scenario. If they are staying with Playstation they need to seriously look at selling other divisions including movies, insurance and/or solid state devices to fund growth in areas they decide they want to concentrate on.

I think it is a foregone conclusion they should be out of mobile.

[Delsin_Rowe]

PlayStation is the most profitable division in Sony now so it would be stupid to sell but TV division need to go since nobody wanted to buy it since its expensive and people rather get Samsung TV since its cheaper.

[TyBREAKR]

Are you serious? Read what you just wrote. You talk like you know something. Just because you use a little business knowledge does not make you more intelligent. Quit it right now.

[kwandar]

Actually I have been a CFO for over 25 years, so yes, I actually do know something.

I know that sometimes the strategic plan forward includes selling your most profitable division. Don't sound so shocked. Maybe Google or Apple will want in and pay well for it?

[thanhgee]

@kwandar

lol..

[TyBREAKR]

You cannot make a claim like that on an internet gaming forum and expect people to believe you. Wouldn't a CFO have much better things to do than argue with some dude who didn't like what you had to say?
I just don't understand why you think selling the PlayStation brand is a good idea? And then on top of that, to MS or Nintendo??? Again, re-read your original post.

[kenshiro100]

You don't know what you're talking about. Their gaming division is profitable. Why would they want to sell something that's profitable?

Common sense must have been thrown out the window when you wrote that.

[ShadowWolf712]

>The Verge

Pretty sure people should do almost the opposite of what they say at almost any given time.

EDIT: "Sony CEO Kaz Hirai — a former boss of the PlayStation division — has announced that the company is essentially going to stop trying to grow its consumer electronics businesses beside the PlayStation 4."

...are they reading the same reports as everyone else?

[Inception]

Obviously they not reading the same report. I even bet they don't have a clue how to read a financial report.

[Bodge]

If Sony only had the Playstation brand, they'd be bankrupt in under 2 years.

[AKissFromDaddy]

So when will Nintendo go under...?

[Dark_matter]

Zzing!, bubble up for you AKissFromDaddy.

[IGiveHugs2NakedWomen]

The author was huffing paint while writing this article.

[AKissFromDaddy]

"What Sony needs to do is focus on the people that want to give it money: that means Apple and Xiaomi, which buy its image sensors; that means moviegoers and music fans, who (along with Japanese life insurance customers) have propped up the company’s bottom line for years; and yes, that means gamers, the only group who appears to believe that Sony remains relevant in consumer electronics."

100% Agreed.

Sony needs to drop it's Mobile Division...unless they drop Google's Android and develop their own unique, competitive mobile OS. Sony's phone will never differentiate itself if its competitors, like Samsung, if they all has access to the same mobile OS. Additionally, Sony would make money from its own App Store.

Sony's smart glasses look worse than Google's version and it seems like a failed project already, especially at $1500.

Sony makes excellent products and people would love to own products developed by Sony, but Sony charges a premium price for similar, cheaper product or experience that their competitor regularly deliver at a much cheaper price. That's why Viao failed. Without unique, exclusive software or hardware, premium prices aren't justified to their target market.

Nonetheless, CEO Kazuo Hirai, has raised Sony stock from its 52 week low at $15.93 to its current $27.26. When I had Sony in my portfolio, I bought it at $18, sold it for $19 because its projects were too risky, I was losing money, and they didn't appear to be making the firm a steady cash flow, but its PS4, cameras, financial services, and it's movie deal with Disney have been great ventures by Hirai.

Had I kept Sony in my portfolio one more year, my capital gains off the sale would have made me a happier American. However, Hirai must stop paying out a dividend until Sony is clearly in the Black with cash flows, in my opinion. If Google can get away without paying dividends, Sony should follow suit.

Nevertheless, the mobile division has the most growth of all divisions because a firm can sell a better phone to it's clients every single year. The PS4 may surpass its PS2's 155 million milestone, but Apple sold 75 million iPhones last quarter. Apple is the market leader and among the top two market leaders in mobile because of it's unique mobile OS (iOS) and desktop application (iTunes). Without a alternative, unique, competitive software to counter those two, it's fruitless against Apple, let alone Samsung who has the same access to Google's Android.

[TyBREAKR]

Now this guy has business sense and wrote something that wasn't complete jibberish. Bubble to you.

[Christopher]

***Sony makes excellent products and people would love to own products developed by Sony, but Sony charges a premium price for similar, cheaper product or experience that their competitor regularly deliver at a much cheaper price.***

Not on the mobile end for phones and tablets. They're priced in line with Samsung and LG products, if not under them for tablets.

Sorry, I know it's a small point, but just wanted to make it since Sony is trying to get over their "premium" pricing method from the old days with their latest offerings in phones and tablets.

[AKissFromDaddy]

The cheapest Samsung new tablets on Amazon, for page 1, ranges from $110 to $158.
Source: http://www.amazon.com/s/ref...

...And the cheapest stores up to up to 64GB of memory available through a microSD slot and 50GB of free Dropbox storage. This tablet was available on Amazon since August 13, 2014.

All Sony new tablets on Amazon are on one page and ranges from $125 to $690.
Source: http://www.amazon.com/s/ref...

...And the cheapest tablet for $125 is limited to 16GB and this tablet was available since August 29, 2012. That's 2.5 years ago and still priced this strong against Samsung's better tablet with the same OS.
Source: http://www.amazon.com/Samsu...

On Amazon.com, Samsung's cheapest tablet is $15 less than Sony's cheapest tablet and allows an expansion of 64GB in memory via a microSD card and 50GB of free Dropbox storage. Sony and Samsung both utilize Android making both tablets essentially the same...except one is cheaper and offers more memory.

[Christopher]

@AKissFromDaddy: Ignoring specs are we? Samsung's cheapest tablets are utter crap. Sony's aren't. Compare them to equal tablets on a price point, not just some garbage Samsung throws out there.

[AKissFromDaddy]

"Ignoring specs are we? Samsung's cheapest tablets are utter crap. Sony's aren't. Compare them to equal tablets on a price point, not just some garbage Samsung throws out there."

Hey Chris,...thank goodness I'm on my last bubble. I don't want to argue facts. No matter how good Sony's hardware specs are, their target market doesn't care.

No matter how good Sony's tablet hardware specs are, it's fruitless unless it sells well.

Looking at the top 100 best selling tablets on Amazon.com, Sony is completely absent and Samsung's first appearance of its many appearances starts at #3, the Samsung Galaxy Tab 4 for $150. Then a Samsung tablet reappears at #10, then #23, then #28, then #35, then #37, then #48, then #58, and ends at #74. That's 9 spots in the top 100 best selling tablets.
http://www.amazon.com/gp/be...

So I focused on Android tablets. I stopped looking for a Sony tablet on the "new and best selling" Android tablets on Amazon.com after page 10. It's littered with Samsung tablets on every page.
Source: http://www.amazon.com/s/ref...

It's 24 tablets per page. After 240 tablets, I stopped looking.

Of the first 10 best selling Android tablets, eight of them are Samsung tablets.

I don't want to argue facts. No matter how good Sony's hardware is, their target market doesn't care and their premium prices make no sense.

Even the ProntoTec 7" Android 4.4 KitKat Tablet PC, the 11th best selling tablet on Amazon.com for $47, sells more than every Sony tablet there. ProntoTec 7 has 512M DDR3 RAM and a Dual Core 1.2Ghz.

Dragon Touch tablets, I've never heard of this brand, sell more tablets on Amazon.com for $52, $55 and $110 dollars and ranks in three spots of the top 20 best selling tablets on Amazon.com.

These are facts and numbers matter, not specs. You're free to make the argument that specs matter more than sales. Kudos to you, good sir.

[Christopher]

@AKissFromDaddy: "No matter how good Sony's tablet hardware specs are, it's fruitless unless it sells well. "

We don't disagree with that. What I disagree with is your rebuttal of my point that what Sony offers is at least on par with the competition at the same price point, if not above it.

You came in saying that there were cheaper Samsung tablets. That has nothing to do with the quality and pricing of Sony tablets if you're comparing it to garbage tablets that people buy for their kids because they're so cheap and easily replaced.

I already admitted that they aren't selling well. I don't admit that just because cheaper ones are selling well by Samsung that Sony's tablets are off the mark. They're not. They just don't have the advertising funds that Samsung and Apple do.

[fOrlOnhOpe57]

It would be a great shame. Sony innovation has led the way in the electronics market for many a year.

[MadMenX]

Bad article, Bad Advice

Business 101 teaches you why.

First off SONY \ Playstation Brand, profits in this market change from Gen to Gen, its not something that can be completely relied on.

Second you should always have multiple sources of revenue, so if one arm fails another pulls it through until its next cycle can be come profitable, unless its consistently un profitable
(pc division etc)

This article is written for Gamers, but anyone with a business background would tell you , its good for smiles and thoughts bad in actual practice.

[AKissFromDaddy]

"Second you should always have multiple sources of revenue, so if one arm fails another pulls it through until its next cycle can be come profitable, unless its consistently un profitable "

Did you read the article bruh...?

"What Sony needs to do is focus on the people that want to give it money: that means Apple and Xiaomi, which buy its image sensors; that means moviegoers and music fans, who (along with Japanese life insurance customers) have propped up the company’s bottom line for years; and yes, that means gamers, the only group who appears to believe that Sony remains relevant in consumer electronics."

You still have time to edit your comment.

[cyclindk]

And really they simply need to adjust their business model in the other arenas they are invested in to match what they've done on Playstation. Quality, affordability and support. Marketing is extremely important as well, they need to build their brand up in other areas too and give people reason to stick with Sony even BEYOND the aforementioned reasons. Make people want to stay with your brand.

[Inception]

Bad article and bad headline. I'm glad sony CEO isn't this guy.

[sonic989]

That's why the author doesn't qualify to become a CEO - the real title of this article

[StrayaKNT]

I have a xperia z3 I wouldn't want them to stop making phones I love this phone lol my first sony phone aswell

[CLOUD1983]

WTF this **** saying... SONY have the best TV the best Smartphone & they are also the best in many other electronic products like anything that have to do with image & sound, I always owned SONY TV & smartphones they are the best there is & I want my next TV in a few years from now to be also SONY as I want my next smartphone & the next to be also SONY I love their products because no other company create so high quality products with so elegant aesthetics, SONY is not simple an electronics manufacturer they are artist, their products is piece of Art every singe one of them, so this hater here who wrote this idiotic article & own a shity iphone like all the sheeps there in US can go to **** off, SONY products are the best in the market & I truly wish SONY keep on blessing us with their superior (technological & design-wise) products for4ever, they can't really stop so many people out there who truly love their products, me included.

[WESKER2015]

the problem isnt design with sony, they have the best designes in the tech market, and they are always tech pioneers, but times are changing, the competition is catching up now, the main issue with sony and its products is their pricing, people can buy a smartphone or tv with the same specs as the sony counterpart for half the price, sony think they are still the powerhouse the were in the 90s, they are relying on their name alone and it just isnt the case anymore, sony are still a leading tech giant, but they are just not as big as they used to be

[OtakuDJK1NG-Rory]

TV the best Smartphone

TV debatable

Smartphones NO.

Everyone easier has Samsung, LG, Iphone or Window phone. Never heard or seen anyone with Sony phone

[WESKER2015]

sony should really take some tips out of nintendo's handbook, ditch the stuff that is dead weight sony, they need to concentrate on the playstation brand if people want to see PS5 next generation

[hiawa23]

If they can't make money in their other divisions why expand. Seems to make sense to me.

[Apex13]

This articles title alone is stupid and doesn't need reading. It's not often you see the console life cycle succeed twice or three times in a row. It's a stupid thing for Sony to rely just on the play station brand alone. If their game division was as big as Nintendos and they were focused on software development then maybe. Until then they just need to get their house in order as they are making another loss in the fiscal year. I will get negative thumbs down but don't ghink fan boy and think more business.

Sony are innovators and have the best designed products next to apple whom originally borrowed from Sony. They just need to stop pricing themselves out of the market when compared to LG and Samsung et tel

[GokuSolosAll]

No, they make great products. TVs, computers, phones. They should focus mainly on gaming, yes, but not exclusively.

[WizzroSupreme]

Sony sure should. Plug the leaks and save the lifeboat. Playstation's what's keeping the company together. Reward the thing that feeds you.

[ARESWARLORD]

Playstation is great though I can rember when the sony trinitron was the best tv

[quenomamen]

Ooh look another Sony is doomed article, thats like what the second one in two weeks ?