By John Biggs
Sony (SNE) can’t get much right these days. They’ve dissolved their partnership with Ericsson (ERIC) so they have no dog in the mobile fight and their Blu-Ray/3D TV push is, at best, an afterthought with consumers. Nobody wants Sony laptops, what with all the ultrabooks out there. The only thing that can save them is gaming.
The first great Sony hope is the Vita, Sony’s handheld gaming console. Designed to offer a superior gaming experience over the only other portable consoles, the Ninendo DSi and 3DS, the Vita is already selling out in Japanese pre-orders and could be next year’s hot selling gadget. None of the gaming greats except for Nintendo has progressed on the hardware front in years, so the Vita might be just the jolt Sony needs to survive.
But the Vita isn’t a sure thing, especially since Sony is hurting in multiple ways. As Reuters notes:
The videogames unit made a first profit in 5 years in the year to March, as it squeezed production costs for the Playstation 3, boosting profits for the whole company. The unit’s sales accounted for more than a tenth of Sony’s 7 trillion yen in total revenue.
This comes in conjunction with a fall in Sony stock after a major downgrade. Things couldn’t be worse. Sure, the Vita is interesting, but is it enough to pull the company out of the death spiral?
Sony played the wrong game for too long. Convinced they still had a say in the CE market, they pushed multiple technologies – Memory Stick, Blu-Ray, ATRAC – for far too long just as consumers were getting wise to their tricks. They won VHS vs. Betamax, but there was no way they were going to sell a Walkman over an iPod.
These pointless battles distracted Sony management enough to ensure that the CE space wasn’t theirs anymore, resulting in a number of lower-priced, high-quality competitors that made Sony look like the Bose of TVs – too expensive for most people and with benefits too esoteric for many to understand.
In the end, I think Sony is done. Samsung owns the mobile space and much of the CE space. Vizio owns the low end. Gaming is still the wild card, but without a string of hits, 5 more years of profitless financial statements will not make the company much stronger.