Can Sony find its mojo again with PlayStation 4?

Getting back on top as the world's biggest games console firm is a tough call for Sony. But with the new model set to be cheaper than the old one, it looks like the firm wants to take the market back by force...

by Michael Northcott
Last Updated: 31 Oct 2013

The struggling Japanese consumer electronics giant has summoned journalists, reviewers and other techie luminaries to a shindig in New York, where it is thought that the fourth PlayStation console will be announced. Having struggled to beat off sustained competition from Microsoft’s Xbox over the last decade, this could prove Sony’s last chance to wrest back a chunk of the market. 

It’s no surprise that the firm has been losing ground in the console stakes – the new unit’s predecessor, PlayStation 3, has been on the market for seven years. Hardly ‘bleeding edge’, is it? Still, rumour has it the new one will retail for around £300, which is £100 cheaper than the starting price of the previous model. 

For the gamers out there, pundits are expecting the new device to have a controller with a touch screen interface, games which stream over the internet, and of course, better high-definition capability for the ever-increasing sharpness of televisions on the market.

On the business side, Sony really needs this product to fly. It has made a loss on every single TV it has sold in the last eight years thanks to the high value of Japanese yen. Not to mention margins being squeezed by Samsung’s uber-efficient production and the welter of cheaper products available in China. The other issue, specifically for consoles, is that Samsung and Apple phones and tablets have stolen a piece of the gaming market, disrupting the console-makers’ normal model for squeezing profit out of their devices.

Apparently, the chief of Sony’s PlayStation unit, Kazua Hirai, is convinced that the new console will become the centrepiece of Sony’s entire stable of products, linking in with phones, HD TVs, tablet PCs. What form such an ‘ecosystem’ (sorry, we’re cringing at the jargonese, too) might take is anybody’s guess. And goodness knows Sony would want such an approach to work: it is the norm in Japan for the large corporations to insist on producing every single electronics device under the sun. 

Meanwhile, economic conditions for selling the new console are improving. Japanese exports rose in January for the first time in eight months, thanks to an aggressive monetary policy that significantly weakened the yen. This makes goods more affordable for overseas consumers. The weak currency did push up the import bill, resulting in a record trade deficit of £11.1bn, which is 10% more than a year ago, but Sony will probably just concentrate on those rising exports… 

 

To read MT's feature on why the major Japanese manufacturers are struggling, click here.

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