Trimming the Fat

The New PS3 (Photo Credit: Sony)
After six years on the market and one redesign, Sony has once again decided to release a new version of its Playstation 3 video game console, making the latest model half the size of the original behemoth. Sony has also decided to up the configurations to 250GB and 500GB models while also aggressively pricing the configurations at $269 and $299 in North America, respectively. This move comes in anticipation of Nintendo's Wii U console, which will have a price point of $300-$350.

Will this redesign save Sony's lagging entertainment division? While sales of the PS3 remain steady, they are nowhere near the level of its predecessor, the Playstation 2. The slimming down of the PS3 will be a good thing for Sony and for consumers in general; however, it displays a glaring problem in Sony's corporate business model at large. For several years, the PS3 was sold at a loss with the hopes of eventually trimming it down to turn a profit. Only "eventually" happened three years later. When looking at the corporation overall, Sony has had its largest consecutive losses in the last four years, and with each one, corporate cutbacks are promised. Management has cut over 30,000 jobs and shuttered 11 factories in the past 5 years, hoping to reduce costs to make an operating profit. Yet Sony still lags behind its competitors in practically all of the fields it once dominated: laptops and music players to Apple, phones to both Apple and Samsung, and TVs to Samsung and LG, among many others. Ultimately, the problem with Sony is believing that its core business model will work given enough time. This has led to a lack of innovation with Sony simply waiting it out until their production processes gradually become cheaper. But underneath Sony's fat are just skin and bone, no muscle to support the frame.

-Aureen Sarker


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