In these economic conditions, everyone is feeling the strain. Sony, a company that just reported its first operating loss in 14 years, isn't exempt from the strife. However, SCEE president David Reeves says that, despite being forced to "suffer a little," everything is going "according to plan" in regards to the PlayStation 3.
In a recent interview with UK publication The Guardian, Reeves spoke about the PlayStation brand's current position, and alluded to the poor holiday season that saw the PS3 bring up the rear once again. In response, Reeves had this to say:
"We simply have to suffer a little; go down in market share and mind-share. It's like Ali v Foreman – go eight or nine rounds and let him punch himself out. We're still standing, we're still profitable and there's a lot of fight in us. I don't say we will land a knockout blow, but we're there and we're fighting."
When Sony posted their $3 billion loss in their 2008 financials, some became concerned that cuts would be seen on the PlayStation front. Instead, Sony opted to lay off 30% of their HDTV work force and shut down six manufacturing plants in Japan; the gaming division, which managed to turn a small profit, remained mostly untouched. And Reeves knows why:
"My objective is financial – to make a profit in our territory by the end of March, and we will. Our priority has always been the PS3; the forecast was 10m at the beginning of the year and it's still 10m. If we'd cut the price, lost another billion dollars, we might have had a huge Christmas but it would have been followed by a huge loss. The company could have thought: 'Hmm, I'm not sure I want to be in this business at all.' But we've shown Sony this is still a good business to have."
Of course, because Reeves mentioned the price, it became a topic of conversation. The PlayStation 3 remains the most expensive console on the market, and although Reeves admits that consumers would certainly respond to a lower price in these tough times, he says they still make a profit and that's what ultimately matters. "Admittedly, in the current climate, more people will go for the lower price, but we still make a profit and that is our objective." And in the end, Reeves is confident that the PS3 is in just the right position, despite all the global difficulties.
"We took our cuts in 07 and 08, we restructured and streamlined and we're as lean, as mean as we can be. I have seen no plans to cut jobs and it wouldn't be productive to do so. We're always looking at ways to reduce costs, replacing the current 65 nanometre Cell chip with a 45 nanometre one probably in middle of year. But will it be anything as off-strategy as releasing a PS3 with a DVD rather than a Blu-ray drive? I doubt it."