Sony Talks Company’s Gaming-Dependent Financial Future
This morning, Sony released a statement reflecting its business realignment following the recent news of 10,000 company employees being laid off. The statement comes just days after reports that the company had revised its end-of-year forecast, which would result in Sony’s biggest annual financial loss in 10 years: roughly $6.38 billion.
In order to turn things around, Sony is looking to shore up its core businesses, namely “digital imaging, game, [and] mobile” offerings. To that end, the company hopes to generate 70 percent of its total sales from these three categories, and earn 85 percent “of operating income for the entire electronics business from these categories by [fiscal year 2014].”
Here’s what the statement has to say about its current business in the gaming market:
“In the game business, Sony continues to deliver exhilarating entertainment experiences through PlayStation 3, PlayStation Vita, and its unique combination of hardware, software, PlayStation Network (“PSN”), and range of accessories and peripherals. These will form the foundations on which Sony will target further sales and profit expansion in the game business. The Company also aims to increase sales by enriching its catalog of downloadable game titles and subscription services available through the PSN platform, and also by expanding the lineup of PlayStation Suite compatible devices and content. Sony will target game business sales of one trillion yen and operating income margin of 8% by FY14.”
In short, this means that Sony is looking to prop up roughly a quarter of its business on video games.
Think we’ll get some sweet discounts to move software? How about no more bullshit proprietary memory cards? That’d be nice.
In all seriousness, though, it’s interesting that shortly after Kaz Hirai took over as Sony’s CEO, the company is going to be more dependent on their gaming business than ever before–interesting because Hirai got his start at Sony in the company’s gaming arm. It can be easy to forget from within the video game world, but the PlayStation brand of devices is only one small part of the Sony empire–or, at least, it was. It was only in the mid-1990s that Sony got involved with gaming at all, after a partnership to work with Nintendo on a CD-Rom drive for the SNES fell apart.
And now that Sony’s finances are a total disaster, gaming is one of the three main pillars of its business–all while the PlayStation 3 has maintained a solid third place status for the majority of this generation’s console race, and the PlayStation Vita has seemingly struggled to find widespread acceptance.
Do you think that we’ll see changes in the way the gaming portion of the company is run now that Hirai is making it a major priority for the company’s success? Less focus on expensive, proprietary hardware, more focus on affordable, innovative games and hardware? Or will it be more of the same–but much, much more of it? These sure are interesting times…