My Thoughts On… will be an ongoing OpEd column. I talk a lot of trash on The SideQuest about, well, everything. Some conversations that come out of the show lend themselves greatly to more explanation. These pieces, though they may be a bit harsh, have a lot of background and study behind them to create informed opinions. Plus, I’ve had them floating in my head juice for a while and need to get them out, and I really think you need to read them.
Sony is in trouble right now. They haven’t posted a profit in eight quarters. Their game console sales are down across the board. Late last year their credit was dropped to junk status. Sony Computer Entertainment is in the best shape of any division of their entire company, and yet, they aren’t doing well either. We know Sony is in rough shape, but how bad is it exactly?
I’m not an analyst; but if you just pay just a little bit of attention to the game market, you can glean some information about the state of things. Sony needs revenue. I know, it takes a lot to figure that out. Sony laid off half of their software PR team before the holiday season last year. Whether because they had no confidence already, or because of the layoffs, Sony’s (already weak) lineup for the holidays crashed. Most of their games for both the Vita and the PlayStation 3 sold poorly, despite many of them reviewing well. That trend has continued through the beginning of this year.
Sony has been releasing games and not even sending out press releases about them until the day after they hit store shelves. If the gaming press and gamers with their ear to the ground don’t even know that a game is coming out, how do you expect it to sell? Hopefully these are just transitional woes and later this year Sony will have their ducks in a row to market their games and systems, including any next generation systems they may have.
The Last of Us is one of the few games Sony has on the calender for this year. With it being a Naughty Dog product, it is probably going to be pretty good. I know that because I pay attention and have followed the games development, just like most of you reading this piece. The unfortunate thing is the people who turn games into bestsellers — those who don’t have their ears to the ground — don’t know that. The Last of Us has made next to no splash in the mainstream; it has shown up at E3 and on the Spike VGAs in 2011, but other than that, it is unknown. Maybe Sony will have a huge marketing push through all of May and through the release in June 14th, but at this rate, the game is hidden from the majority of the game buying audience.
Let’s say Sony cancelled all the marketing on all of their games to push just one thing. If that one thing is a new console (see: PlayStation Meeting on February 20th), then they may have made a smart decision. Sony as a whole doesn’t have a lot of cash on hand, and a major marketing push for a new console may cut their war chest by a third, and that is a scary proposition for a company on the brink of disaster. So if they do make this push, and they launch an problem-free console this fall, Sony will need to sell record numbers of consoles just to break even. Posting huge sales of a new console will undoubtedly drive up stock costs (which have dropped by 10% over the last few days), perhaps giving President and CEO Kaz Hirai enough time to figure something out for the company in the long term.
Sony is in trouble, and because of their huge money sinks across their non-gaming divisions, a single console and a few games absolutely cannot save the company. Unless they pull a major transition and dump thousands more employees, they could have to file for bankruptcy protection soon. It seems to be little more than a matter of time. This is upsetting for me to think about as Sony games and consoles were a major part of my childhood. Hopefully they can turn it around, but I won’t be buying Sony stock any time soon, that’s for sure.
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