Sony Corporate Re-org

[Silent_Buddha]

3 billion USD? That's quite a re-org there. I wonder how many workers/plants/offices will be shut down during the consolidation.

From a Japanese point of view, the prospect is horrifying. Many Japanese companies have and continue to go out of business rather than fire any employees. I suppose that's one of the big reasons a non-Japanese person is at the helm.

Regards,
SB

 

[patsu]

Heh, I have always maintained that people don't have to worry for 500lb gorillas. There are usually lot's of wastage (even for US corperations).

Times have changed. The Japanese will have to move on. A stronger and leaner Sony will create more opportunities for the Japanese economy anyway. Not everyone needs to stay under one roof to benefit.

EDIT: On another news, Kutaragi will be lecturing MBA students in Ritsmeikan U., Kyoto
http://playstation.joystiq.com/2009/02/27/ken-kutaragi-to-lecture-at-japanese-university/

 

[RudeCurve]

Gah, he left Sony to join Atari long ago.

Didn't know that, does KK still work for Sony? Oh didn't know he's retired.

 

[patsu]

Yap, this move is also symbolic in bringing up "young" leaders in Sony.

 

[Shifty Geezer]

The reshuffle involved the promotion of four relatively young executives. Sir Howard praised the quartet's “courage”, hinting at the setbacks he has faced in trying to impose real change on Sony's operating ethos.

The injection of fresh blood sent a signal that Sir Howard had belatedly taken “step one in the right direction”, David Gibson, an electronics analyst at Macquarie, said.

I suppose this could well be true, that the reason we haven't already got the unified PSN content platform across devices is because Howard was being held back. If so, and now he's getting his way, maybe we'll actually see Sony pulling together it's many divisions into the super-power it always had the potential to be, use content to drive services and become ubiquitous as a quality all-round experience. I can't imagine notable changes for a couple of years though.

 

[patsu]

The most interesting question now is "What's Next" ?

I'm sure they have tons of things to iron out on the ground, and an anxious labor pool to calm down. The middle managers will be the key to chain everything together. I reckon we won't see the outcome of their effort until 1-2 years later.

... unless they take the swat team approach (like Steve Jobs). They won't be able to get productive right away if they are not aggressive and focused enough. When Jobs went to Apple again, the first "new" thing he worked on was the Mac OS X revamp (Actually just the Aqua UI theme ). If Kaz can get his most talented people to zero in on one singularity (that the consumers can see and actually care), then he may just be able to hit it.

For that, I think he'd still have to go back to his Playstation kingdom.

The other strategic tasks (e.g., removing excess SKUs, align business units, streamline logistics, etc.) should be doable by hiring/delegating to the right people. But Kaz himself needs to anchor a product vision or bless someone else's.

 

[archie4oz]

Was it? What were the A/V capabilities of original PlayStation besides gaming?

Just playing CDs. Although there was a white model (SCPH-5903) sold in the asian market that also played VCDs.

They're betting a lot on the playstation brand.

Not quite... Just clearing some bureaucratic roadblocks at the top.

Overall I think it makes a lot of sense. It's where KK was headed before the original re-org, and where Stringer himself has been trying to take things without much luck yet.

Oh I think Sir Howard's had some pretty good luck so far, with some tangible results.

Having SCE tie-in to the Walkman and Media/Services branches brings a much needed emphasis on commonality, and leverages the software know-how at SCE; a key aspect of the future for electronics and an area in which the other Sony divisions seem a bit archaic.

Sorry, but I'm really trying to hold in the laughter on this one, especially since SCE couldn't build the PSN and Sony Pictures ended up bailing them out, building it from nothing in less than a year. I could go on, but I'd probably end up digging myself into more trouble...

The Playstation brand has been a big part of revenue for Sony.

It's been one of the most visible and well known, but "Bravia" and "Cybershot" still bring in more revenue each respectively.

Seems bold and I like it. Looks like Howard will finally get the left hand talking to the right.

Oh the left and right hands have been talking, even before Sir Howard became CEO. It's just that after each re-org, the hands listen a little more to each other, and on rare occasion actually work together.

I think the bet is on PSN, which is probably going to tie all those different products together. I bet we will eventually see PSN morph into Sony Media Network and become a one stop shop for content for a host of Sony products.

Well it wouldn't be the first time this has been attempted within Sony, and in any case this was already going on before this PR release.

The only stigma will come from accessing the network. If the content and services are there, it shouldn't really be a problem, but it still sounds a bit limited in scope. ie. Sony can't really distribute application software through PlayStation without seriously stretching the definition of 'play'! A Sony Network conveys a far more open service with a wider range of options.

I think the problem here is that you're under the misconception that the PSN is actually called the Playstation Network and that the Playstation is the only conduit to access content from it. Here's a hint, it's not.

I suppose this could well be true, that the reason we haven't already got the unified PSN content platform across devices is because Howard was being held back

Sir Howard hasn't exactly been held back. He's been playing softball so as not to offend the sensibilities of his (mainly Japanese) subordinates who have been in Sony decades longer than he has. Even when you're CEO, subordinates can still make things difficult for you. Kutaragi learned this the hard way. In any case the current economic climate combined with the more recent financial outlook has certainly given Sir Howard more political capital to place more capable "yes" men in areas where stubborn roadblocks existed.

 

[archie4oz]

When Jobs went to Apple again, the first "new" thing he worked on was the Mac OS X revamp (Actually just the Aqua UI theme ).

Honestly now? Aqua was a rather late change, and OS X was technically already released on the market before the Aqua UI existed (for those of us who remember MacOS X Server 1.0, which was very much like Rhapsody DR2, which was essentially NeXTSTEP skinned to look like MacOS 9). Anyways before even that Steven spent a lot of effort cleaning out the Apple closets of a lot of the people from the previous 'administrations' and installing and promoting people he brought over from NeXT.

 

[patsu]

At this stage, Kaz has been in the organization for decades and has a full picture of the business from the frontline all the way to the logistics end (due to prior shuffles). He also went through good and bad times in the same organization. Once someone has that full picture, he should already have a pretty concrete intuition about where he want the whole ship to go (Kaz is close to 40 right ?).

Aqua UI is just an example. Steve Jobs revealed it in a MacWorld soon after he took helm. He certainly didn't invent it. Someone else did (Not someone on the team then. Jobs brought in guys he worked with before). But he knows what's important, what his target audience want and what business strategies and logistics he needs to pull it off. In PS3 context, I don't think Sony needs to put XMB in center stage (coz it doesn't make sense), but the larger usability issues need to be identified and addressed during product management.

I'd love to see what Kaz Hirai is made of.

 

[Shifty Geezer]

I'm sure they have tons of things to iron out on the ground, and an anxious labor pool to calm down. The middle managers will be the key to chain everything together. I reckon we won't see the outcome of their effort until 1-2 years later.

The sad thing is, they ought to be a good way there already! Before PS3 ever hit the shelves, they should have been putting together a unified PSP, PS3, mobile and PC network to replace the, now defunct, CONNECT service and span all devices. What exactly have they been doing all this time?!

I think the problem here is that you're under the misconception that the PSN is actually called the Playstation Network and that the Playstation is the only conduit to access content from it. Here's a hint, it's not.

Well, there is a PlayStation Network, which will naturally be abbreviated to PSN, so if PSN isn't officially the PlayStation Network, it's an inevitable misconception. And accessing the PlayStation Network from your PC to download 'Lovely Face Painter Pro' doesn't seem right to me. Whereas SonyNET or something equally ghastly would fit the bill and be untethered to any particular piece of CE gear. And there woudln't be any major re-education needed to get people to think of PSN as 'Prospicious Sony Network' or whatever when buying DLC!

 

[patsu]

The sad thing is, they ought to be a good way there already! Before PS3 ever hit the shelves, they should have been putting together a unified PSP, PS3, mobile and PC network to replace the, now defunct, CONNECT service and span all devices. What exactly have they been doing all this time?!

They are indeed somewhere in-between already (e.g., As I recall, SCEJ borrowed some guy from the VAIO division to develop the SPU video decoder). Whatever being developed now but not rolled out yet will likely continue too.

One of the problems was the other divisions had no ownership/revenue in the unified services, so it's hard for them to contribute fully. With the new structure, they'd be measured by and also benefit from the services.

 

[Carl B]

Sorry, but I'm really trying to hold in the laughter on this one, especially since SCE couldn't build the PSN and Sony Pictures ended up bailing them out, building it from nothing in less than a year. I could go on, but I'd probably end up digging myself into more trouble...

Well that does raise a point for sure.

 

[joker454]

It's been one of the most visible and well known, but "Bravia" and "Cybershot" still bring in more revenue each respectively,

Was that true before the PS3? I know the PS3 wiped out the Playstation brand profit wise, but I though it did very well in the PS1 and PS2 era. Cybershot is hella popular, but on the TV side I always though people bought cheap and passed on the Bravia brand both because of price, and because Sony is no longer at the top of the TV heap anymore having been passed by Pioneer, Samsung and Panasonic.

Aside from that, I wonder what their plan is with their staggering studio payrolls. Can they really afford to drop millions of dollars on all these studios year after year? There are all the familiar studios of course, but there are many other unknown studios on Sony's payroll that have astronomical budgets yet many have delivered nothing. Can they really afford to keep doing this? I guess I'm wondering where in hell all the money is coming from to pay all these people.

 

[patsu]

He's talking about revenue, not profitability. Bravia should be contributing rather well there (#3 in US unit-wise, #2 dollar-wise last June I think).

Sony is a huge, multi-headed beast. It's a little hard to apply a negative or positive comment to the entire whole. One of the criticisms against Sony is the business model for its content divisions. They are generally hit and miss, title by title (Risky but high reward by milking successful franchises). I'd say the execs would be interested in platform oriented strategies to complement their current operation (The Blu-ray platform would be one such example).

 

[flashboom]

TOKYO, Mar 13, 2009 (AsiaPulse via COMTEX) -- SNE | Quote | Chart | News | PowerRating -- Exhausted from intensifying competition with South Korean and Taiwanese rivals, Seiko Epson Corp. (TSE:6724) has decided to turn around its flagging LCD business by teaming up with Sony Corp. (TSE:6758).
"It will be difficult to boost earnings to previous levels all by ourselves," Seiko Epson President Minoru Usui said in a news conference here Thursday, declaring the company's intention to radically restructure its struggling small- and midsize-LCD operation.

As a key part of its restructuring efforts, the firm will begin negotiations with Sony toward a tie-up.

Seiko Epson will likely use these talks to explore the possibility of selling some business assets to Sony and sharing investments in R&D, product design and manufacturing facilities to lower the break-even point. Seiko Epson hopes that the negotiations will lead to an agreement by the end of June.
http://www.tradingmarkets.com/.site/news/Stock News/2221235/

Interesting for PSP, Mobile phones, Walkman etc. Sony are starting to do what they should of done years ago. Having the ability to make cheap products.

 

[Arwin]

I thought that at its peak, the Playstation brand actually made up more than 50% of all Sony revenue.

 

[NathansFortune]

I thought that at its peak, the Playstation brand actually made up more than 50% of all Sony revenue.

Profit. Not revenue. SCE used to be the only real profitable electronics based segment in Sony. Every other device made a loss because of high cost/poor manufacturing processes (which even effected PS2). At that time (2000-2004) Sony were surviving gaming division profits, media assets (SPE, SME) and the financial investments unit. Consumer goods were very weak, and it seemed like Sony were doing everything possible to trash their good reputation for solid quality, these are known to be the years that Nobuyuki Idei. He is the worst thing that ever happened to Sony, and nearly trashed the company, and if it wasn't for swift action by Kutaragi and Stringer in 2004 and 2005 Sony could have become a subsidiary to another electronics company like Panasonic or Toshiba.

His only good decision was to put Stringer in charge, in his six year tenure as CEO he never made another good decision for the company. For example, his personal hatred of Kutaragi led him to "promote" KK to head of the electronics business, but he was actually setting KK up. No one could have rescued Sony's electronics division in 2002, not with all of the pressure to stay in failing markets (CRT TV, VHS, MiniDisc, ATRAC) and not adopt new standards (Flat panel TVs, MP3, and iPod like HDD based DAPs). Kutaragi wanted to adopt all of these changes in Sony Electronics, but the media divisions stopped him at every turn (run by Stringer under instruction from Idei) and didn't allow Sony to drop any of the unprofitable products.

A wonderful bit of little known corporate history for you guys, it's amazing what you can learn working in my industry!

 

[Carl B]

A wonderful bit of little known corporate history for you guys, it's amazing what you can learn working in my industry!

Don't pat yourself on the back too hard there, those tales have been covered at length on the forum before.

 

[patsu]

[patsu pats NathansFortune's back softly]

 

[gongo]

Sorry, but I'm really trying to hold in the laughter on this one, especially since SCE couldn't build the PSN and Sony Pictures ended up bailing them out, building it from nothing in less than a year. I could go on, but I'd probably end up digging myself into more trouble...

LOL if true! So what is SCE doing all this while? Did SCEE not contribute the Singstar OS to the PSN?
I worry for the Playstation future if their disabilities are not solve soon. They ARE going head on with MS, not much of a sissy puss. Reminds me of the Walkman days..?