Sony Corporation (ADR) (NYSE:SNE)’s PlayStation video game console has been the price of the engineering legion of the company for nearly two decades now. With inventions like Blu-Ray and DVD movie players, and also the Cell processor, PlayStation has been successful in selling more boxes than the Trinitron televisions of the company and has rivaled its legendary Walkman music players.
Still the PS 3 needs to undergo a makeover. Sony is expected to take the sheets off the very first details of a powerful new machine that will push the limits of entertainment and gaming technology.
Sony is confronted by a question whether this iteration of PS goes hand-in-hand with the present demand for mobile computing. Customers can play games on their smartphones and tablets almost anywhere. There is no denying the fact that people are no longer in awe of the Sony brand as they once used to be. Kazuo Hirai has said that he consider the PlayStation business as the centerpiece of a whole universe of content including tablets, phones and TVs. Such a waterfront strategy has been largely discarded by Samsung and Panasonic. Michael Pachter of Wedbush Securities thinks such a strategy is tough to sustain with the emergence of low-cost Chinese makers. Pachter said that Sony is refusing to acknowledge that it does not have a market like it used to have 20 years back. Pachter feels that the company is desperately trying to stick to the idea that it can get it back.
Sony clearly needs to get its strategy of PlayStation right on track. After 8 years of losses in the TV business, the company is estimating a profit of $215 million this year. Hirai picks ancillary business like display-manufacturing and chemicals as he wishes to produce 85% of operating profit and 70% of Sony sales by the year 2014.