Sony is bleeding money - business strategy discussion

How Sony could have been in a better position to make aggressive moves with a cheaper but weaker hardware?
Just my POV but by aiming at significantly different price bracket than what they expected MSFT to go with.

They are benefiting from a lot of mistakes and execution issues from msft:
Online policies
Lack of software for kinect
Overall immature system
Last and not least pricing, msft refrained to resort to its deep pocket to ease pretty aggressive design choices, ultimately they have to do it.

There is a lot more to Sony good decisions wrt the Ps4 than hardware.
 
Just my POV but by aiming at significantly different price bracket than what they expected MSFT to go with.

Aiming for a significantly different price bracket doesnt necessary equal "aggressiveness". A different price bracket (as in lower retail price) may also carry a very low margin and/or be an inferior product. Unless Sony came up with a super differentiator like Nintendo did with the Wii then probably you might have had a point. But you view price in isolation and you dont talk about the target market and the rest of the elements that build "value" for said market.

You can talk with more certainty about "aggression" when a company can produce a product with similar capabilities as the competitor's products at a far cheaper price or a product with more/better capabilities at a similar price (i.e Playstation 1 vs Saturn).

They are benefiting from a lot of mistakes and execution issues from msft:
Online policies
Lack of software for kinect
Overall immature system

Lets not forget that MS can still make corrections and they already did. Both the PS4 and the XB1 are immature systems. Yet MS did hit the sweet $399 price spot by removing Kinect, they made very attractive bundles, improved the OS, its games are in close parity and corrected their online policies. It's a good match for the PS4 now. Your assertion that Sony still benefits from MS's mistakes was more correct at the beginning of the new generation but not so much now. Sony probably benefits by offering a more capable hardware at the same price now. So this means that even if Sony went for a cheaper and weaker PS4, MS would have still been able to make these decisions. There is a high possibility that XB1 could have been viewed as a better value despite the price difference because $399 is a good price and the console has more capable hardware that can produce more features and have significantly better games. But we cant really say much because you havent provided an indication of how much weaker and cheaper the PS4 would have been in a realistic scenario
Last and not least pricing, msft refrained to resort to its deep pocket to ease pretty aggressive design choices, ultimately they have to do it.

There is a lot more to Sony good decisions wrt the Ps4 than hardware.
That wasnt MS's mistake. It was a rational business decision.

Regardless if MS could resort to its deep pockets to sell the XB1 far cheaper thats true "aggression". Why? it doesnt imply any reduction on the product's capabilities while its sold at a reduced price. Thats true value increase for the consumer. At the same time though thats a huge impact on profit. But contrary to this true example of aggression, yours suggests some sort of product downgrade so that it can accommodate a cheaper price with better profit margins. Higher profit margins suggest price increase and less value for the consumer. It doesnt make clear sense.

Lets not forget that one of the disadvantages that the XB1 has (irrespectively of my personal preference) is that the PS4 has the better versions of multiplatform games. It is a probable selling point. Your suggestion equals the reverse which would have a negative impact on value.

It is a huge assumption to think of this as a better decision and a more aggressive tactic without providing a good estimation of "how much weaker" and "how much cheaper". It is impossible to see if that would have been a much better value for the consumer that way.
 
Last edited:
Aiming for a significantly different price bracket doesnt necessary equal "aggressiveness". A different price bracket (as in lower retail price) may also carry a very low margin and/or be an inferior product. Unless Sony came up with a super differentiator like Nintendo did with the Wii then probably you might have had a point. But you view price in isolation and you don't talk about the target market and the rest of the elements that build "value" for said market.
Price point is a differentiator, the decision of shipping without Eye Toy was another one for example.
It is not that much about "aggressiveness" but more about not facing a competitor on its strong point: money.
You can talk with more certainty about "aggression" when a company can produce a product with similar capabilities as the competitor's products at a far cheaper price or a product with more/better capabilities at a similar price (i.e Playstation 1 vs Saturn).
Sony (or MSFT) is not under that kind of pressure from a competitor, the vertically integrated companies (samsung for example) are not interested in standard consoles.
Lets not forget that MS can still make corrections and they already did. Both the PS4 and the XB1 are immature systems. Yet MS did hit the sweet $399 price spot by removing Kinect, they made very attractive bundles, improved the OS, its games are in close parity and corrected their online policies. It's a good match for the PS4 now. Your assertion that Sony still benefits from MS's mistakes was more correct at the beginning of the new generation but not so much now. Sony probably benefits by offering a more capable hardware at the same price now. So this means that even if Sony went for a cheaper and weaker PS4, MS would have still been able to make these decisions. There is a high possibility that XB1 could have been viewed as a better value despite the price difference because $399 is a good price and the console has more capable hardware that can produce more features and have significantly better games. But we can't really say much because you haven't provided an indication of how much weaker and cheaper the PS4 would have been in a realistic scenario
Sony is benefiting a lot from MSFT mistake, that only thing MSFT got before and after launch was bad advertisement, offering lesser performances at a higher price was the nail in the coffin. Sony execs on the matter are spot on, once the price of the X1 was known it was champagne time at Sony HQ.
MSFT is reacting but the PS4 has built a huge momentum, it is unclear to which extend they can change things outside of US.
That wasnt MS's mistake. It was a rational business decision.
MSFT decisions should not be discussed here but there are a lot of things to discuss on the topic, one way to shorten the discussion is to look at the exec dance that followed those decisions even if there are other factors.
Regardless if MS could resort to its deep pockets to sell the XB1 far cheaper thats true "aggression". Why? it doesnt imply any reduction on the product's capabilities while its sold at a reduced price. Thats true value increase for the consumer. At the same time though thats a huge impact on profit. But contrary to this true example of aggression, yours suggests some sort of product downgrade so that it can accommodate a cheaper price with better profit margins. Higher profit margins suggest price increase and less value for the consumer. It doesnt make clear sense.
I'm not sure I've been clear enough, by aggressive design choices, I mean:
aggressive online policies, policies they did not dare to enforce on the PC market for example
Including costly hardware that did not attract to the primary demographic (at launch mostly core gamers).
Pricing, selling in the grey or for a small profit while including Kinect.
I'm not sure aggressive is the proper way to state it, may "really opinionated" design and business choices would have been better. A language issue here, I'm a bit a loss and I could not think of anything better. EDIT may be "too bold"?
Lets not forget that one of the disadvantages that the XB1 has (irrespectively of my personal preference) is that the PS4 has the better versions of multiplatform games. It is a probable selling point. Your suggestion equals the reverse which would have a negative impact on value.
That is a point of view, lesser versions of games, higher prices, online policies perceived as an attempt to rip costumers off, etc. destroyed the value proposal of MSFT offers. They've been back pedaling since launch, that launch was a disaster.
It is a huge assumption to think of this as a better decision and a more aggressive tactic without providing a good estimation of "how much weaker" and "how much cheaper". It is impossible to see if that would have been a much better value for the consumer that way.
Well I could try to present a system but it is a bit pointless. I used to think that AMD was a good choice now looking at this company roadmap I disagree. It applies to MSFT too, but I think that this choice does not present them with enough options for long term price reduction, they stuck themselves into AMD palms.
Wrt to hardware it might not be the answer you search for but looking at Intel Bay-trail offering is interesting, looking at the type and price of products they end up in is interesting too, even more interesting is that competition can actually out do Intel in the low power segment.
For the ref I would look at overall 1/2 the PS4 and aim at 299$ max. I would have gone with a software platform.

Now the PS4 value is pretty good, MSFT did mistakes and there are no way to go back in time ;) But I still believe that it was a mistake for SOny to go head to head with MSFT knowingly that the later could have bled them quite badly and that the odds for MSFT to play its cards that badly were pretty low, and by low I mean nobody expected such a disaster of a launch.
Sony is safe this round, for MSFT to compete outside US at this point my pov is that they need a relaunch, XB2 tinier system, same specs, 299$ max.
I can't imagine how messed MSFT message might be for an average customer that do not spend his time reading things on the web: it comes with kinect.. not in fact it is no longer relevant... so It failed? Performances are lesser. They are selling at a discount, etc. Everything surrounding that system might smell quite a bit "funny".
 
Last edited:
I wonder how the recent hack of sony pictures will affect them. It seems like a few movies like annie and fury were leaked so those movies could have weak box offices.

Also Its my understanding that most of the departments of sony shut down for a few days. my cousin at sony music was home for 2 days until they made sure to fix the exploit used for sony pictures.
 
Haha! Most amazing is details of movie stars like Sly Stallone in a simple folder with word and excel files.
Genius. I mean that really takes some effort in cluelessness.
 
Do they hire chimpanzees to protect the passwords?

It's probably just PR people who know nothing about security. I've worked with people who wrote their safe combinations in their diaries (left on their desk) and who's concept of genius security was to write it backwards. Unfortunately not everybody is security conscious.

Plus if you think/assume your computer network is safe, that tends to add an additional false sense of security. Most people would probably store the data for convenience of access.
 
Last edited by a moderator:
I am pretty sure that the movie "Hero In the Family" was inspired by real life events and these Sony guys were a bunch of ex-intelligent people who were sent in outer space years ago only to have their minds accidentally switched with that of chimpanzees.

There is no other reason why Sony would have hired them. They saw their CV's that were written before the incident :p

Now you may wonder what happened during the interview? Well some double Agent working for both Sony and Nasa probably joined them too in space. He happened to be the chimpanzee interviewer.

AAAaaaaaandd I think my imagination broke loose again and its 12:00 AM
 
latest


Its like they didn't learn anything from PSN attack...
 
^ Or any of their movies that they produced that involved hacking/cyber crimes. Since I do not really watch TV, has this been on any news outlets? I do wonder if the average consumer is paying attention during the busy shopping season.
 
As if Sony weren't bleeding enough money, they have now cancelled the release of The Interview completely. Movie fully made, due to be released in a few days. Will not be released. Because North Korea.
Genius. Another few millions down the drain.
 
Last edited:
Tough situation. I don't agree with scrapping the movie, but it's definitely a tough decision. As for the password file, it was probably some idiot trying to make their own life easier, not the way company security operates. We have information distributed around work telling us not to do things like that, but it's on people to read it and understand why it's important.
 
As if Sony weren't bleeding enough money, they have now cancelled the release of The Interview completely.

They had no choice in this. Many cinema chains had already refused to screen it and any cinema that did are was under the threat of terrorist attack.

No movie is worth a clear risk to human life.
 
They had no choice in this. Many cinema chains had already refused to screen it and any cinema that did are was under the threat of terrorist attack.

No movie is worth a clear risk to human life.
I wasn't really blaming them. But it is yet another massive cost to write off.
 

While very funny, I think it's important to remember that however big the cooporation is we are talking (and laughing) about - they are still only humans behind the desks. At best, they are not even IT versed people, but simple employees in higher positions. What this shows and demonstrates is that obviously the structures and possibly infrastructure is missing to ensure that sensitive data isn't stored on a simple Windows workstation in the My Documents folder, but inside a secure application that stores its content on a centralized system / database and can only be accessed in a secure manner. But who has this anyway? Banks. Military or cooporate companies. Intelligence and law enforcement, Government. Perhaps big IT companies who have the experties to actually program these systems (to meet their demands) themselves without having to rely on opensource or commercially available (expensive) applications.

So while it's funny to point and laugh at Sony's inability - take a good luck at the company you yourself work and ask yourself if yours is any better? And if it is - what is stopping a senior employee (who doesn't know shit about IT or what exactly malware is) to store sensitive data in a local excel sheet for convinience sake? The only difference (in most cases) will be that Sony is a big fish, a target, and so are prone to hacks and reaching the headlines more than your 'little unknown workplace'. Sony has thousands of employees worldwide - the odds that someone there is storing sensitive data in places they shouldn't is statistically quite high. Which makes them vulnerable.

You'd be surprised to see how vulnerable most people are - and this includes those working at big companies with better security in place. Convinience is your biggest enemy. Most people even think having an up-to-date virus scanner means their files are protected. Go figure...
 
Back
Top