Sony boss Sir Howard Stringer has said that Sony will not be broken up as it struggles to deliver profits and that the Japanese Company has no plans to cut the price of the PS3 which in Australia is almost double the price of an Xbox 360 and an Nintendo Wii.
Speaking at the Allen & Co venture capital conference in Sun Valley, Idaho in the USA, he said that he was not concerned that he could possibly lose Activision Blizzard games for the PS3. The gaming company threatened to stop making games for the PS3 as it was too expensive. Sony’s price gouging tactics apply to most Sony products sold in Australia including Sony TV’s, Vaio netbooks and their gaming consoles.
He admitted that he was in a word of wars with Robert Kotick, the CEO of video game publisher Activision Blizzard.
“He likes to make a lot of noise,” Stringer said, when asked about the comments. “He’s putting pressure on me and I’m putting pressure on him. That’s the nature of business.”
In Australia, Sony CEO Carl Rose has refused to talk about price gouging of Sony TV’s notebooks and netbooks, declining sales of Sony Bravia LCD TV’s or the sacking of staff at Sony Australia. He has also refused to say whether Sony Australia is now profitable. In week 26 Sony had 14% share of the LCD TV market while Samsung had 40%.
In Australia, consumers are starting to complain about Sony price gouging as recent comments to the SmartHouse comment stream reveal.
Gary Brewer of Melbourne wrote “I stopped purchasing Sony products around 2 / 3 years ago, due to the higher prices they charged, and can certainly not see anything that would make me rush back to them”.
Ray Gonno of Sydney wrote “Sony, the once great company which ruled electronics, has lost touch with reality. Other brands have now caught up yet Sony continue want to charge ridiculous prices for basically the same thing as their competitors. Sony is shooting themselves in the foot just like Pioneer did”.
Activision’s Kotick told the Times of London last month that Activision might cease developing games for the PlayStation if Sony did not cut the price of the console, which competes with Microsoft’s Xbox and Nintendo’s Wii.
“When we look at 2010 and 2011, we might want to consider if we support the console,” Kotick had said.
Asked about the logic of not cutting prices, Stringer said, “I (would) lose money on every PlayStation I make — how’s that for logic.”
Asked about consolidation in the entertainment industry, Stringer said Sony was not looking to get rid of any assets.”We’re learning to fuse content and hardware. This wouldn’t be a time to get rid of either,” he said. Stringer said he will be participating in a panel about the recession at the conference. “I see green shoots but it’s a very light shade of green,” he said.
While the executive said that the economic situation in most of Asia is looking good and that he sees a bottom in China, it was still too soon to call a bottom to the recession overall.
“It’s very hard to tell whether this is just a minor trough on the way to recovery or a trough on the way to a trough,” said Stringer.
