Beleaguered Sony counting on new game machine
TOKYO - PlayStation stands out among the long list of famous Sony brands as one that hasn't faded or succumbed to a nimbler competitor. Months after hitting global markets, the latest version of the video-game console is going on sale at midnight in Tokyo, a big shift from times when Sony was ascendant enough to launch flagship products in Japan first.
The PlayStation 4's much awaited arrival in Sony Corp.'s home market is the first time Japan did not get a major Sony game machine ahead of other markets. With much riding on the PS4's success, the commercial advantages of targeting overseas markets outweighed the sentimental pull of a home town launch.The PS4, Sony's first video-game
console in seven years, went on sale in the U.S. and Europe in November. Still, a big crowd of Japanese game fans are
expected at the countdown ceremony in Tokyo's fashionable Ginza district.
Sony officials say more time was
needed to prepare game software attractive for Japanese, but analysts say Japan
wasn't a priority for Sony's game division.
The PS4 has proved a hit so far,
selling 4.2 million units last year, outpacing rival Microsoft Corp.'s Xbox One
at 3 million.
But analysts say Sony, headed to a 110
billion yen ($1.08 billion) loss for the fiscal year ending March, needs more
than a successful game console to reverse its dimming fortunes.
The company rose from humble
beginnings in 1946, with just 20 employees, to become one of the first Japanese
companies to go global as the country emerged from the debris of its defeat in
World War II to become a manufacturing powerhouse.
But in recent years, out of Sony's
long list of well-known brands -- Walkman, Vaio, Bravia, Cyber-shot, Handycam,
Aibo -- only PlayStation has managed to hold its edge. Its share price is today
just one third of its 2008 value.
The Walkman portable audio player lost
out to the iPod from Apple Inc. over the last decade, as it fell behind in
adopting the MP3 format.
Sony's Bravia TV section, despite
boasting the company's top notch image technology, has not made money for 10
years straight, despite repeated promises from executives to make it
profitable. The Aibo robot dog was scrapped in 2006, under a massive turnaround
program, despite an uproar from fans.
Earlier this month, Sony announced it
was selling its Vaio personal computer operations in the latest sign of its problems.
It is keeping Bravia but making it a subsidiary company.
It's also cutting its global workforce
by about 3 percent or 5,000 people by the end of March 2015, as it restructures
its PC, television and other businesses. Some 3,500 of the job losses will be
overseas and 1,500 in Japan. That comes on top of the 10,000 jobs cuts Sony
announced over the previous year.
"I am just not sure anymore if
there is anything Sony makes that can be counted on to produce growth,"
said Motohisa Ohno, a technology expert who heads Tokyo-based NewProject, which
consults companies on software, Internet branding and other topics.
"I can only hope it is working on
something we all know nothing about. It's so sad to have to say this."
Ohno, underlining a common sentiment,
said the trick is to create a product that pioneers a new market, the way the
Walkman did when it first came out.
When the Walkman was invented in 1979,
listening to music with earphones on-the-go wasn't common practice. It was
shown off in the first demonstration by a skateboarder.
Sony has fallen behind competitors
from Asian countries to which Japan was once an economic and manufacturing
success to emulate. Samsung Electronics Co. of South Korea has emerged dominant
in household electronics including TVs and newer product categories such as
tablets and smartphones.
In ultra-HD TVs called "4K,"
the Chinese makers are quickly catching up.
Even the future of the PlayStation 4
is not assured because game players are switching increasingly to mobile
devices. The switch to mobile games is especially pronounced in Japan, where
Sony has never had to take the threat from Xbox One seriously.
If PS4 sales trail off, that would be
a problem. Much of the console's profits come from game software.
Yasunori Tateishi, who has written
books on Sony's fall from grace, fears that eventually Sony will be reduced to
its entertainment business such as music, movies and perhaps games.
The biggest problem is that Sony
President Kazuo Hirai has been selling pieces of the company, instead of
investing in the future as did his predecessors, including founder Akio Morita,
he said.
Hirai has repeatedly said Sony's
smartphones, tablets and imaging technology are still scoring success, and its
engineers are working hard to come up with dazzling products. He is promising a
turnaround through his reforms.
That hasn't stopped him from being
peppered with questions from investors who have heard engineers are quitting in
droves, endangering Sony's ability to come up with innovation. Hirai has not
directly addressed such questions.
"Mr. Hirai has not scripted out a scenario for the future," Tateishi said, stressing that PlayStation 4 will not be enough to save Sony's electronics. "It's just a game machine."
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