Unfortunately, Sony recently reported plans to layoff approximately 10,000 employees as a result of their substantial annual loss in net earnings for the fiscal year (which just ended in March). For those who are wondering what sort of financial loss could spark such a large number of layoffs, try 6.4 billion US dollars (over 500 billion Yen). Add in losses at Sharp Corp, their joint venture, and the annual loss is estimated over 11 billion US dollars.
This places Sony in a delicate situation. For three generations of consoles, Sony has been an unstoppable juggernaut. Now, with mediocre PlayStation Vita sales, they’re facing fearfully high losses. Not to mention this is right before the world is preparing itself for those next gen consoles that seem to be coming (whether its liked or not). Does this mean loyal PlayStation gamers might have to move over to a different next gen console brand? Let’s take a look at Sony PlayStation’s biggest threats.
Reuters reported back in October 2011 that Nintendo made its first ever loss of over 19 billion Yen, resulting in a large scale cutbacks of 3DS’ anticipated sales. These events lead to the 3DS becoming known as a financial flop. Considering how lucrative the Wii remained, even when pitted against the comparatively sky high prices of the 360 and PS3, 3DS was an innovative failure. This was most likely the catalyst, forcing Nintendo’s hand, which pushed for the earliest reported ‘next generation’ console, the Wii U. Surely it was an abbreviation for the more appropriate name for the console: Wii Need U to Start Buying Our Games. In the meantime, Nintendo has continued suffering losses in stock, streaming media revenue, and even a few noteworthy exclusive titles. It looks like Sony needs to find an answer soon as Nintendo is vamping up their next gen money maker. So where does Microsoft’s Xbox 360 land in the mix?
Thinking back on the evolution of this generation’s consoles, it looked like Xbox 360 was hogtied and ball gagged. In the beginning, the multiplayer explosion hadn’t yet occurred. There were so many perks found on the other systems that simply weren’t as focused on the 360. Wii was notoriously associated with motion gaming and cornered the market on family fun. And while 360 backed the wrong horse with the HD DVDS, PS3 struck cerulean oil with the BluRay. Instead of standing ground and saying “But our system is the multiplayer system”, Microsoft dug their feet.
The last few years of 360’s reported earnings are in no small part affiliated with the Kinect, Microsoft’s answer to the Wii. Is it not financially sound to procure licenses and mass produce aftermarket Blu-ray players? Xbox decided to go a different route instead. The latest few dashboard updates feature entire sections to multidimensional entertainment which not only combats the likes of their console competitors, but also takes on old rivals of a different nature. While Apple TV has a modest sales history, there may be no need for it in the near future (Microsoft would like to think). HBOGO, Netflix, Hulu Plus, and virtually everything that can be streamed through Apple TV can be brought to a living room through Xbox Live. Perhaps Microsoft is planning on eliminating Apple TV altogether with the rumored Xbox Lite. If the miniature gizmo is truly slated for release, and it does what it is rumored to do (admittedly speculation galore), then it looks like Microsoft plans on attacking Apple from an entirely new front. The Zune was a colossal joke for anyone who picked up an iPod first, and it looks as though Microsoft never got over that feeling of being kicked in the gut.
So who really runs the most lucrative console? The Wii has moved far more systems, with approximately 95.5 million sold. Meanwhile, Xbox 360 and Playstation 3 have sold an estimated 65.6 and 62.9 million units, respectively. On paper, the Wii looks pretty. However, everyone knows the Wii has always been sold at a substantially lower price. The Xbox 360 has sold less units, but at a higher price than the Wii. Include all the extra dough players have thrown around for those years of red rings, and it almost feels like Xbox has a number of phantom system sales. The PlayStation 3 sold the fewest, but at a cost of around 20-25% higher than even the 360. Rumors state the PlayStation 3 may be looking at another price drop soon to compete for some last minute sales.
Sony has taken a heavy hit. Given the size of their corporation, Sony stands to rebound, but only if they can pull off some better Vita sales, milk a price drop on the PS3, and make a big statement with their next console. Nintendo is limping a bit from their first annual loss, but seems to have hit the ground running with an explosive head start pushing their Wii U. While the general public doesn’t know what Microsoft’s future holds, it sure seems all eyes are on Microsoft’s Xbox 360 as it still remains the most well-oiled money maker of the three.
Making money now is always great, and the Xbox 360 is certainly walking tall. Regardless, the real truth is hidden just beneath the surface, and all three console giants are more than aware. This is merely the transition into an even greater battle. The next gen consoles are going to bring bigger and better things to gamers — casual or hardcore.
Who looks like they are most prepared to take their experience, technology, and money to the next level?