14 DAY TRIAL // Sony's Chief Executive Officer Howard Stringer has announced that his company is set to halve the number of firms from which it gets its parts in order to prepare it for a plan that should see it turn around its fortunes. The move would cut the purchasing costs for parts by around 5.3 billion dollars, which is about 20% of the sum that it spent during the last fiscal year.
Sony has recently announced its first yearly loss for 14 years and the problems will mean that this year is unlikely to see it return to profit. The move related to halving the number of part suppliers will see the company negotiate higher volume deals for lower prices with those that it keeps.
What impact could this have on the PlayStation 3, the leading gaming console manufactured by Sony? For the device, which is lagging behind the Xbox 360 from Microsoft and the Nintendo Wii in sales, it could be positive as some of the parts that go into building it might become cheaper. If the manufacturing costs go down even slightly, Sony can then transfer the cuts to potential customers, by shaving off 50 or even 100 dollars off the price of the PlayStation 3.
Rumors about a price cut emerged in the final part of 2008 but in early 2009, analysts and even game developers stated that the console needed to be cheaper in order to attract more gamers. But a price cut cannot happen if Sony takes a loss, a big one, on each console that it gets out to gamers.
Some are saying that Sony's restructuring might hit the PlayStation 3 in other ways, with the gaming division seeing fewer projects approved and being forced to cut its costs. If sales of the PS3 and of Sony branded videogames do not rebound this year, there is a chance to see Sony go SEGA's way and get out of the console business altogether.