New boss warns of 'serious trouble' ahead unless sweeping changes are made
Sony’s CEO-in-waiting has admitted he now faces an even tougher challenge than when he had to revive PlayStation’s fortunes, and has warned that the electronics empire must adapt or “could be sitting in some serious trouble”.
Kazuo Hirai, the SCE chairman who will become Sony chief executive on April 1st, is preparing to make sweeping changes across the entire global operation.
"I don't think everybody [at Sony is yet on board with the changes], but I think people are coming around to the idea that if we don't turn this around, we could be sitting in some serious trouble,” Hirai said in an interview with the Wall Street Journal.
Sony yesterday said it expects to make a loss of $2.9 billion in the year ending March 31st – more than double its previous estimate.
"I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not," Hirai said in his interview, which was conducted before the company’s financial report.
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"It's one issue after another. I feel like 'Holy s—, now what?'"
Hirai took charge of the PlayStation business in 2006 when then-SCE president Ken Kutaragi revealed to the Sony board that PlayStation would lose $2 billion for the financial year.
Once appointed Kutaragi’s successor, the 51 year-old Hirai quickly took steps to reduce the cost of producing PlayStation 3 units to end the haemorrhaging cash flow at SCE.
Now as Sony’s next CEO, Hirai has pledged to again make tough decisions, and will review more than 20,000 Sony products.
“Sony cannot continue walking on the same path,” Hirai said yesterday at the investor meeting.
“Sony needs to find new business areas, such as medical. We also need to select and narrow our business portfolio.”
He said Sony “cannot just continue to be a great purveyor of hardware products, even though some people expect us to do that".
Hirai wants the firm to focus on the user-experience itself. He said the key questions for hardware in production at Sony should be “What can you do with the product? What are your services? What kind of content do you have?”
He added: “It’s not just about the hardware product, it’s about the user experience.”
Sony’s shares rose as much as 8.9 per cent in Tokyo trading, the biggest daily gain since April 2009.
Now there is a surprise...
It has always made me wonder, how Sony could stay afloat: With so many competitors snapping at the heels, so innovative and so hungry for Sony's market share; with so much "more of the same" strategy; and with so much time and effort wasted on internal turf wars and political infighting.
It took Titanic 3 hours to sink. For that long time people probably thought they were going to make it. In reality they were dead the moment the ship hit the iiceberg.
The difference with Titanic was they couldn't patch the hole.
Sony is capable of doing anything its management and workforce can dream up.
The question is do they have the management and workforce capable of an Apple like business?
It sounds like they are going to try and copy Apple 's marketing and design now of reasonable hardware specs with good astheic designs and user interfaces. Unfortunatly Apple are already well etablished as the big player in that market. Their rattling fanboi cage with empty promises to get free viral marketing didn't work under Ken long term so they have to try something new. The whole stream of systematic bad press of security and draconian DRM needs to be addressed. DRM only impresses share holders not the legitimate buyers who end up paying extra ( after all DRM development is not free).
Medical areas could be a good area for them such as medical 3D imaging and joint replacement if they can innovare.
Had they not bundled PS3 with BlueRay, they would have released PS3 earlier and cheaper, and PS3 would have trounced Xbox360 (which initially had unacceptably high failure rate). With complete dominance in high end gaming, Sony might had an ecosystem on its own like Amazon, Apple and Google.
highly disagree, bluray kept it afloat while MS is still struggling to encourage media use (eg in the new xbox dashboard)
look at every multiplat game before 2010 & you'll see how time & again devs struggled to code on the ps3 (& not having trophies from the start), making it cheaper cant fix that without assuming publishers would feel like spending more on the ports, but sometimes the knowledge & talent just isnt there (eg uncharted devs did a lot more with the hardware after the 1st game)
once people got used to doing certain gpu stuff on the cell cpu to ease the weak gpu that the ps3 has, the gfx quality went up with 25 or 50 gb of space to fill up, so good thing bluray happened to be there (rage is 2 discs on xbox)
so after a slow confusing start, excluding the same old xmb or psstore, the end result of the games (& bluray movies) is quite a decent growing success
not having bluray cant solve that slow confusing start & would only hurt where it is now (although if there wasnt, they could have a sloppy bluray addon drive over the gigabit connection & eventually put the drive internally)
Sorry to hear your going to have to work for those millions and millions of dollars you will be making Mr. CEO of a multi-billion dollar company.
Just sell your stock to the good old American politicians then when you start going under you can get a big bail out courtesy of the American tax payer.
