Topic: Ever think Samsung will replace Sony?

[MrPhishfood]

In the video game industry Nintendo is the only platform holder left that specialises only in video games. Microsoft who are at the forefront of software and Sony who was at the forefront of consumer electronics. No doubt the edge in their respective fields allowed them to move in on the games industry.

Sony however are not looking so hot right now if you've been following the news. These excerpts are taken from http://www.japansubculture.com/the-ghosts-of-sony/

Panasonic Corp. lost 698 billion yen (8.7 billion $ US) for the second quarter of the fiscal year, and its longtime rival Sony also  announced an annual loss of 457 billion yen (5.7 billion $ US) in its fourth straight year of red ink, Sony reported its fiscal results on November 1.

Former Sony executives and current employees blame the fall of the firm on the loss of brainpower and good employees during the reign of Nobuyuki Idei, from 1999 to 2005. Idei was the first Sony CEO to rise up entirely from a management background and in the “Who-killed Sony?” genre of books and articles; he is regularly the prime suspect.

“Idei decided to streamline the company and do massive restructuring. When we say, ‘restructure’ in Japanese—we really mean get rid of people. He put together an early retirement plan and strongly encouraged people to use it. Well, that didn’t generate a lot of good feelings. When a company starts promoting early retirement, most people take that as a sign to get out while they still can. And many did. Maybe the idea was that by getting rid of the middle aged and older employees they’d encourage innovation and bring in some young blood. The effect was more like shooting yourself in the foot.”

According to the Sony veteran, the middle-aged engineers and technicians that left were the same ones that brought Sony to greatness. They left behind a younger generation that was insecure, afraid of failure, and only willing to work with technology already in place—not build from the ground up.

“What was even worse is that during this period, Korea and Taiwan immediately welcome the exiting Sony techies with open arms. It was better than industrial espionage—Samsung could openly ‘buy’ the technology that Sony had developed simply by rehiring their best and brightest.”

The representative of a major European investor in Sony recalls his meeting with Idei very unfavorably.
“I came to Japan to talk to Mr. Idei about our growing concerns with Sony’s direction. We had dinner together. I wanted to talk about profit margins; he wanted to talk about the wine we were having. He struck me as a clueless.”

When the investor pointed out that Sony’s operating profits on electronic products were roughly 2-4% and that Samsung was making similar products at a 30% profit margin, Idei hushed him by saying, “They make the parts for our products. We put them together. It’s the difference between a steel maker and an automobile maker. We make the automobiles.”

The investor countered, “Well, I’ve got news for you—the people you laid off from the car plant are now working at the steel mill, and soon the steel mills will be building cars with your technology.”

So Samsung being the new electronics giant built on the backs of former Sony talent may just push out Sony as a platform holder. Not this coming generation but maybe the next one if Sony can't get things in order. With March 2013 on the way, the date they are due to layoff 10,000 employees I can only see things getting much worse before they get better.

[Plugabugz]

Samsung would have to sink some serious cash into getting things off the ground in the same way Microsoft did with the Xbox launch in 2001. And even back then it was a very slow turnaround from launch to profit.

Samsung's trumpcard is hardware production, in memory chips and the like. If all the components for a potential console was produced in-house (like how the Nexus 10 is), that would keep costs down.

All that's left is the software. And that's a different kettle of fish entirely.

[AnGer]

All that's left is the software. And that's a different kettle of fish entirely.

Being a Korean company, I think Samsung may be able to pull some developers in the boat and gain some ground in their home country, seeing that consoles are usually quite expensive there. But I doubt they'll ever make it in the international market.

[Kytim89]

I do not see any way for Sony to sell the PS4 at a loss to gain market penetration and still remain a viable company. Look at how the Vita is struggling againt the 3DS. Is it true that there are fourty-seven 3DS systems for every Vita? If this is the case then Sony's goose might already be cooked. If the PS4 falters then Sony is finished because they can ill afford to bleed out billions more just to remain afloat.
 
It is obvious that Sony will not be able to cut the price of the Vita anytime soon to make a profit. Therefore I forsee Sony abadoning the handheld market and taking their chances with the PS4.

[nickmitch]

Well, if Sony makes up for hardware losses with software/accessory sales, then it'll all work out.

But Samsung will definitely have to find studios willing to sell before they can even think about entering the market outside of Korea. But if Sony were selling, who knows?

[Blankfall]

Samsung is a good company with nice designs even if they are not all original they have a nice way of introducing it to the market. I would love to see them team up rather then enter the industry. I would not like to see anyone one of the big 3 falter. I mean Microsoft offers something so unique to think of a future without that kind of connectivity is crazy, because nothing will fill Micros shoes. No one will come up and copy them to the exact and get the formula right. Same goes for Sony and Nintendo. Nintendo will always be the weakest link financially, but it's what makes them the strongest console maker and video game developer.