Even Sony realizes they screwed up

Sony made the shocking move of replacing Playstation Chief, Ken Kutaragi because of PS3 delays and poor sales of the PSP. I say it's about time. Hopefully, Sony hasn't waited too long and will be able to salvage the PS3 situation.

Kutaragi, being the father of the Playstation, spared no cost in creating his crowning achievement, the Playstation 3. This is a great idea in theory, but not so in the business world. All the money he spent creating the technology behind the Cell processor and the huge loss the company is taking on the sale of each console means the Playstation branch of Sony may not be profitable for 4 years.

Microsoft's Xbox division has not made a profit yet, but their other divisions generate huge profits to make up for the loss. Sony on the other hand is not doing so well in most of its other ventures. The Playstation division was Sony's biggest profit maker but Kutaragi's bad business decisions have lead the company into the red in which they may never come out.

Hoepuflly, the new president, Kaz Hirai, will be able to make the tough decisions to get Sony back on the right track but it may be too late. Sony has expended so much money and resources on the PS3, battery recalls, and Blu-ray development they may not have the cash flow to correct their mistakes. Sony is a multi-billion dollar company, but you know what they say, the bigger they are, the harder they fall. http://www.bloomberg.com/apps/news?pid=20601101&sid=aPGd5E.YlTR8&refer=japan

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Posted by Bill

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