Over at Fudzilla a story’s been picked up that Sony isn’t focusing on creating gadgets anymore, but rather pouring their efforts into content creation for their newly-renamed Sony Entertainment Network. It’s been a long time coming, but many are confused as to why they’re taking this path – let’s look at the facts first.
Since the launch of the PS3 in late 2006, Sony has been selling the PS3 at a loss. Its not much of a loss now with the release of the Slim version and the fact that they’re only starting to make a profit since this time last year mitigates the loss a bit. They’ve since been making up their losses with third-party license royalties and games sales from Sony’s in-house publishing company. The PSN has also made them a ton of cash and good publicity (you know, being free and all and helping to catch Bin-Laden [yeah, didn’t you know? His son was on PSN and didn’t turn off his location services, The FBI must have turned the entire network off to isolate their compound.]* Anyway, back to the column).
Clearly, the waves Amazon has been making are attracting attention. Amazon’s big draws with their products is the content they publish – Kindle readers have books, the Fire has books and movies and the entire Android market to play with. Amazon’s net worth from this huge potential pot of gold at the end of the rainbow edges the company closer to $50 Billion. A lot of this content doesn’t actually require any effort from Amazon – they publish the content on their service at a fee to the creators and in return they get some cut of the profit and market share second only to Apple and Nokia’s online stores. People flock to use their service and their devices and everyone’s happy-happy.
Now Sony’s been working hard for their revenue for the last six years. After a lot of hardware setbacks, the release of their signing code for their games to the internet, the entire PSN network being shut down and causing everyone to go into a flat panic, and the inevitable price increases thanks to the Japan tsunami making everyone’s life hard, they really would like a change of pace. Easy money, you might say. So they’re re-focusing their efforts into markets.
We’ll certainly be seeing less gadgets being developed by the hardware giant. We can expect to see more innovation from their handheld, Walkman and Playstation/SEN departments, and certainly we’d see better phones in their Xperia line. The abolition of the Ericsson brand is a sign of this – like Nokia, Sony decided they need to do drastic things to stay relevant in markets where there’ not much movement at all.
All I can say is I hope this turns out for the better. The PS3 already pulls crowds because of their amazing exclusives and their integration with products like the PSP and Vita achieves something closer to Apple’s latest iOS efforts. Let’s hope Sony doesn’t lose sight of their original goals like Nokia already has.
* You didn’t really believe that one, did you? I call Bullshi… “FBI! Freeze!” bam bam bam – okay, now I’m dead.