“Sony doesn’t have any core businesses that generate stable profits”

2 min read

Burning through the money

I was following up on the job cuts made by Sony yesterday to see if we can expect them to hit the gaming division or not. I personally expected them to be in the other arb divisions of Sony like finance or property.

However it seems that may not be the case and we may not have seen the end of the job cuts.  According to Katsuhiko Mori, a fund manager from Daiwas SB Investments, the 8000 job cuts may just be the beginning and we should be bracing for more cuts across the board while Sony attempts to ride out this recession.

The problem is, according to Katsuhiko,

“Sony doesn’t have any core businesses that generate stable profits”

That statement knocked me over, how can Sony not have a single core business that is generating a stable profit? That is a very scary thought at the beginning of a recession and may mean that the Sony that emerges from this dip may be an entirely different beast than what we know now.

I see Sony’s problem being the general price of Sony goods. I was in the shops on the weekend looking at the nice shiny TV’s and every single Sony I saw had a comparable Philips, Samsung or Panasonic for 10%-20% less. The same story went with the sound systems as well.

Now it can be argued until the ends of time whether Sony’s TV’s are better but that is not the point. The point is that in times of economic hardship most people are willing to sacrifice a little bit of quality to save cash and when faced with a choice between 2 TV’s that seem equal then the cheaper one will always win.

I get the feeling we are only on the tip of an iceberg here.

Source: GamesIndustry.biz

Last Updated: December 10, 2008

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