When It Rains, It Pours For Sony

august 2, 2005

Last Thursday, Sony announced that it did not do too hot. It cut its projected profit 90% from $714 million to $89.3 million (Huh? Whoever made that original projected profit should have double-checked their decimal placement!) Not only that, but now the price of the Xbox 360 has been leaked at a very affordable $299 -- compare that with what Ken Kutaragi continues to expound about the Sony Playstation 3 pricing: "[T]he PS3 can’t be offered at a price that’s targeted towards households." Well, at least Sony has their movie studios and they are making money, right? Not really. Stealth tanked on its opening weekend -- ending up fourth. Other movies they have released for the summer season (Lords of Dogtown and Bewitched) tanked badly also. Don't forget the miserable xXx: State of the Union which cost $85 million to make, $40 million to market and grossed a mere $25.6 million. Yikes! "Sony's market share this summer has fallen to 3.4%, way down from last year's 15.6%. That leaves it last among the top eight studios, says Nielsen EDI, down from No. 4 last summer. For the whole year, Sony comes in fourth, its lowest in four years." Sony's entertainment unit is having a bad spell lately and it looks like a lot of it was the doing of Sir Howard Stringer before he to the reigns of the company (talk about karma). Anyways, I hope Sir Howard can pull a miracle here, because it is not looking to good for the company at this point. My ex-coworker told me something before I left the company: The brand name "Sony" will always be around, but how the company is and what it does will change dramatically. I believe him, Sony as a company cannot continue to operate as it does now. The only problem that Sir Howard faces is that the company is too large and too entrenched in its rituals that it maybe a lost cause without a large shakeup.

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