Why Sony needs to stop drinking its own Kool-Aid

Sony is in deep trouble. The company has been forced to slash its earnings forecast by 57 percent amid deteriorating economic conditions and its inability to compete more effectively in markets throughout the world.

Of course, Sony will still post a profit–most analysts claim that it’ll be about $500 million–but the downturn speaks to Sony’s issues and the fact that this once-dominant company has been downgraded to an also-ran in the industry.

Remember the days of Sony dominance? It was a time when the Walkman was on the minds of tech lovers around the world and the PlayStation moniker was held in the highest regard. Sony TVs were everywhere, and the company’s ability to capitalize on any market was truly astounding.

But since then, Sony has lost its way. It’s no longer a company that can rely on its name to beat other companies to a pulp, and with more competitors realizing how to beat Sony, it has quickly become irrelevant in many markets.

Sony’s presence in the digital-camera sector is suspect, and its gaming business, once one of the most profitable departments at the company, has become an embarrassment of epic proportions. Although its PlayStation Portable is expected to beat forecasts, the Playstation 3 has proven to be one of the biggest blunders the company has ever committed.