Sony Computer Entertainment Europe President David Reeves says the company may have to “suffer a little” in the short term, but that overall he still has confidence that the PlayStation 3 is going to work out very well.
It was a rough Christmas for Sony. The company ate a loss of almost $200 million in the third quarter, and sales of both the PlayStation 3 and PSP were down. Sony’s game division income dropped by a staggering 97 percent in the quarter, and the company that once dominated the market with the PlayStation 2 now finds itself buried in third place in the three-way console wars.
Yet SCEE President Reeves is taking the long view and doesn’t appear too concerned about short-term difficulties. “We simply have to suffer a little, go down in market share and mind-share,” he said. “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.”
His Zen-like calm apparently stems from his steadfast belief that Sony’s PlayStation 3 strategy is working, and that the European territory will turn a profit by the end of March. “Our priority has always been the PS3; the forecast was ten million at the beginning of the year and it’s still ten million,” he continued. “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.”
“Look at the capability of the machines,” he said when asked how Sony justified keeping the price so high during a worldwide economic meltdown. “With PS3, you can go online for free, it’s got all the games you want, it’s got a Blu-ray drive so you don’t need a new player, you can store photos on it, and you’ve got Home. 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 despite its dismissive attitude in the past, it sounds like Sony is finally ready to admit that Nintendo is, in fact, a competitor, and a very effective one at that. “We’ve learned from Nintendo how to grow the market and move from handheld device to device – they’ve done it brilliantly,” he admitted. “And we’ve learned an enormous amount from Microsoft, too. Overall, the market has sharpened up individual competitors to do better – we should celebrate the industry and how we’ve collectively grown it beyond all recognition.”
Sound strategy or misplaced optimism? The PlayStation 3 has been slow out of the gate but Sony is banking heavily on its ten year lifespan and capabilities as a multimedia device, which it believes offers far more bang-for-the-buck than either the Xbox 360 or the Wii. But at some point Sony has to stop the bleeding; suffering for a greater long-term good is one thing, but suffering because you’re lying half-conscious and bleeding in a gutter while Reggie Fils-Aime and Aaron Greenberg stomp the crap out of you is another matter entirely.
Source: The Guardian
