Sony Corp (NYSE:SNE) (TYO:6758) has been on critical support for the last few years. Once the king of electronics, years of stagnant design and little technological progress has crippled the once esteemed company. The recent success of the PS4, however, has been breathing life in the beleaguered company.
Series of missteps crushed Sony
Back in 2000 Sony Corp (NYSE:SNE) (TYO:6758)’s stocks were selling for above $120 dollars, but now they are selling for less than $20. Sony’s portable Walkman CD players, DVD players, computers, and other electronic devices were among the most desirable in the world. Yet the company had grown complacent. Internal divisions and a lack of innovative ideas led the company to continue producing the same old products, missing out on key changes in the technology market.
For example, Sony had all of the tools in place to make an iPod like device before Steve Jobs pushed Apple Inc. (NASDAQ:AAPL) into the nascent MP3 market. Indeed, Sony’s content division did try to push the company in the direction of MP3 players but its engineering division resisted change. Similar conflicts and internal divisions played out across the company and Sony quickly fell behind.
Indeed, just a few years later Sony missed out on the smartphone revolution, not adopting Android or any similar smartphone platform until well after Apple and Samsung had a stranglehold on the market. The company seemed to believe that such operating systems would not be popular among Japanese citizens. So is Sony simply doomed? If the company’s gaming division has anything to say about it, perhaps not.
Sony PS4 selling out
Sony has sold over 7 million of its immensely popular PS4 console. So far, the console has received largely positive reviews by industry critics, the console’s games have also been selling well and receiving good reviews.
Indeed, across Europe, North America, and the rest of the world Sony is having trouble keeping its PS4’s on shelves. While hardware makers regularly under-produce goods in order to create a perception of high demand, it actually appears that Sony is having trouble keeping up with demand.
So far, however, Sony’s stocks remain stagnant and have continued to decline in recent weeks. While the PS4’s sales have been strong, it may not be enough to save the struggling company. The strong sales of the PS4 is a sign that the company’s efforts to restructure are working. The company’s smartphones have also been selling well in recent months, though sales still lag far behind Samsung and Apple.
Sony’s CEO Kazou Hirai went as far as to apologize at the company’s recent annual meeting and admitted that the company had failed to meet the expectations of investors. Since Mr. Hirai took over the company, Sony has lost over $800 million dollars. Mr. Hirai is confident, however, that his efforts to restructure the company will eventually bear fruit.
Microsoft missed the boat with Xbox 360
While Sony is enjoying a mini-resurgence with sales of its PS4 gaming system, Microsoft appears to have made yet another blunder. In the months leading up to the launch of the Xbox One, Microsoft made numerous missteps. Initially, Microsoft planned to force gamers be logged onto the Internet in order to play, a move that many gamers quickly blasted.
While Microsoft Corporation (NASDAQ:MSFT) eventually retracted this requirement, many gamers were already jaded by a seemingly arrogant company. Microsoft also priced the Xbox One hundred dollars more than the SonyPS4 with a launch price at $500 dollars vs. $400 dollars for the PS4. The Xbox came with a Kinect motion sensor system, but this turned out to be an accessory that few gamers wanted.
With Windows 8 and Microsoft Phones & tables struggling, the last thing Microsoft needed to do was fall behind in the console wars. Unfortunately, a series of questionable decisions by Microsoft’s management has left Xbox One sales falling far behind the PS4. As of now, the Playstation has outsold the Xbox by more than 2 to 1.