The Future of Sony Hangs on the Next PlayStation

Sony reported profits of about $326M, compared to $620M during the same period last year. Sony Computer Entertainment was one of the few bright spots with PS3 and PSP sales off the charts, compared to last year. This feels a little like the old PS2 days where the gaming division was lifting the profits of the whole group (PlayStation used to be 50% of Sony’s profits back then). Sony also blamed the results on a lack of blockbusters like “Spider-Man 3”, which is in my opinion a “pseudo-random” event, financially speaking… I think that this really shows that Sony’s other divisions have had troubles for a while, and I don’t really see an end to it. Samsung and other brands have largely caught up, and besides Blu-Ray (which is licensed to others) Sony does not really have any serious technological edge.

Worse, the value is really moving into the software (OS, user interface…) and Sony can’t build that stuff to save its life (at least, for now). I think that this situation will stabilize and that things will even get better as PS3 software revenues grow (along with the installed base), but fundamentally, if the PS4 is a flop, that would be “game over” for Sony. If it can adapt, the company would not die, but without a successful PS4 (or equivalent cash-generator), Sony “as we know it” cannot continue to exist.

Hubert Nguyen
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Tags: Thoughts