Sony Doubles Down on PlayStation

Steve Anderson : End Game
Steve Anderson
The Video Store Guy
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Sony Doubles Down on PlayStation

Sony does a lot more than just the PlayStation line; it's also a presence in mobile devices, in televisions, and in a variety of components. A recent ad for Sony showed Sony buying a film script, and then building that film using a variety of Sony components. But one thing is clear: PlayStation is one of Sony's biggest properties, and as such, the company is putting extra focus on its development and sales, and putting its collective money where its equally collective mouth is.

A recent forecast suggested that Sony's mobile division, just by next spring, would lose as much as 30 percent of its sales. To that end, Sony is reducing the amount of support for its mobile device and television divisions, and up sales in the PlayStation division by as much as 25 percent, representing nearly $14 billion in business for the company. Additionally, Sony is also putting some extra boost to image sensors, which are proving popular in iPhones and the like. Getting out of the mobile market entirely, meanwhile, isn't an option, at least for now, so instead, the company is cutting back in some areas and doubling down on the option that likely seems among the most profitable in the near term.

In a sense, this is a good idea. Sony has long needed a major cash cow to help it reverse some of its ill fortunes in recent years, and by all accounts, the PlayStation 4 looks like it's going to be exactly that cash cow. Beating Microsoft out of the gate, and fairly well dominating the system, it's got the whip hand right now and it may be able to hold that whip hand for some time to come. Microsoft has been eagerly pushing to reassert its dominance, however, and that may have made Sony think twice, putting some extra cash into the care and feeding--not to mention the protection--of its new cash cow. Yet by like token, this may not be such a great idea. Much like that Sony commercial suggested, surely one of Sony's great strengths is its sheer diversity of product. To pull the rug out from under that diversity might not be the best of plans, and should there be a downturn in the gaming market in general, it may mean a blow to Sony's systems from which it may not be able to recover. By like token, Microsoft is widely distributed across several markets, able to turn to these to absorb losses in other markets yet still emerge on the high side of profitability.

Only time will tell just how well this strategy works for Sony, and while it's a risky one, it's also one with a decent chance of payoff. It's clearly a gamble, but a gamble that plays the odds.

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