
The Ten Year Decline of Sony - akandiah
http://www.notenoughshaders.com/2012/09/08/the-ten-year-decline-of-sony/
======
CamperBob2
Blaming an engineering-centric culture for _bad_ corporate performance?
That's... novel.

Sony has only one real problem: Sony. Merging an entertainment conglomerate
with a hardware company was a dumb idea, because every product manager at Sony
now has to get approval from two completely different companies with two
completely different cultures in order to ship anything. At Sony, if the
technology isn't proprietary enough, the DRM isn't annoying enough, or there
are no clear opportunities to give the customer an enema with a fire hose, the
product doesn't fly.

Blaming the engineers, wow. Good one.

~~~
kevingadd
I think the article does provide some compelling arguments to support this,
though. To quote:

\--

Sony’s strategy never comes together as a cohesive whole because their
engineers are constantly in competition with each other to become famous for
creating the next big proprietary format or gadget. There are so many
proprietary formats or unnecessary electronics coming out of Sony that it
makes Sony’s overall strategy and identity very confusing. The engineers all
want to be the guy who creates something as big as the Walkman or PlayStation,
they are all competing for that recognition inside of the company. However
their ideas are created based on the love for technology, not long-term
profitability.

On April 2012, Hiroko Tabuchi wrote an article to the New York Times saying,
“Sony remains dominated by proud, territorial engineers who often shun
cooperation. For many of them, cost-cutting is the enemy of creativity — a
legacy of Sony’s co-founders, Mr. Morita and Masaru Ibuka, who tried to foster
a culture of independence. But the founders had more success than recent
executives in exerting control over division managers.”

\--

This is certainly plausible, even if it's unfair to blame an engineering focus
for Sony's failures. How else can you explain the fact that they STILL insist
on using insane proprietary standards like ATRAC and even new Sony devices
like the Vita use custom storage instead of standard (far less expensive)
storage formats like SD cards? The fact that the PS3's absurd design got
greenlit and made it all the way to ship is further evidence that engineers
are given freedom to make myopic technology-focused choices.

~~~
Lagged2Death
_How else can you explain the fact that they STILL insist on using insane
proprietary standards like ATRAC and even new Sony devices like the Vita use
custom storage instead of standard (far less expensive) storage formats like
SD cards?_

I don't know anything about the corporate culture at Sony, but I had assumed
that their relentless, senseless pursuit of proprietary formats and interfaces
(among other customer-hostile stupidity like the CD rootkit scandal) was a
sign that wacky Sony marketers were running the show, not engineers.

Because pursuing a proprietary format is generally a _terrible_ engineering
decision. If your product has to touch the outside world in some way, and
there's already a de-facto standard way of doing that touching, you'll
generally get your product done sooner and cheaper by using the de-facto
standard. And the product will work better for the user, too. That is to say,
it will be cheaper to make and it will also be worth a higher price. What
engineer could say no to that?

If those decisions were driven by engineers, they must come from a very
different engineering culture than anything I'm familiar with. Even if this
really is the fault of engineering amok, blaming "arrogant corporate culture"
might communicate the situation more clearly than blaming "engineers."

~~~
dagw
Relentless pursuit of building the Best possible thing irregardless of silly
things like profits, market share and time to market sounds very much like
engineers I've run into. As does eschewing standard or off the shelf solutions
in favour of something you made yourself since you're obviously much smarter
and anything you build yourself will be much better since it will be designed
around solving your problem. Not to mention that many engineers I know love
building and designing from scratch rather than using something already
available, simply because that's much more fun.

~~~
anonymous
So it's a double-whammy of Cult Personalities who are all afflicted with Not
Invented Here syndrome. I can see how that would lead to some massive
problems.

------
josephlord
I worked at Sony until about 18 months ago (European TV Product Planning and
Business Development getting content onto the TV Internet platform).

This data makes it look like it could be going down quicker than I thought but
it did have major problems and no clear route through them.

I think a lot of the engineering problem is that now the growth has gone there
isn't large amounts of fresh recruits bringing new ideas. It also isn't THE
place to work anymore which it once was in Japan (think Google 8 years ago
levels of cool). The engineers are now mostly managers and outsourcing large
amounts of development (particularly software to India). Manufacturing is
outsourced so the benefits of having deep understanding of production and
being able to optimise the products for that just isn't there. These combined
outsourcings may be essential for short term survival but rob further from
capability to differentiate and innovate.

Exchange rates are also killing Sony (and the other Japanese manufacturers).
Massive proportions of their costs are in Japan and inflexible but their
income is significantly in dollars and euros. They would be much better off if
they spread their costs to regions where their income is.

The end of CRTs removed Sony's price premium in TV and Samsung at the high end
and LG at the low end are brutal competitors in an industry where no-one is
making money. However it is almost impossible to escape the TV industry as
that would completely kill all the Sony franchise retailers (and with it a lot
of other electronics sales) and any potential position as an entertainment
platform/gateway company. It would also be a big admission of defeat and a lot
of jobs would disappear.

A lack of real leadership has been a core problem but I'm not sure there is
any way to fix it now.

Don't get me wrong many of the products are still really good and even
competitively priced but that doesn't mean Sony is profiting on them. In TVs I
think the processing on the mid-high models is better than most competitors
and the internet services are pretty competitive but there is a lack of
nimbleness and imagination to really take a lead in anything other than
picture quality. The PS3 is a good value product these days.

~~~
elchief
Man, I had a Sony Wega CRT, and I seriously couldn't tell the difference
between it and the first incarnation of 720 flatscreens.

~~~
josephlord
Yes the first flatscreens were rubbish and for interlace SD video the best
type of screen is a CRT (the screen, the encoding and the transmission
technology were all built around each other to actually gain benefit from the
weaknesses).

However the deinterlacing, upconversion and motion interpolation are massively
different now to the first models. Plus content is available in HD
(progressive) formats and you can get 1080P models.

A 40" LCD can be moved by one person and a 36"CRT would probably need two
people to move it at all, was full of nasty chemicals, used more power and
takes up more space in the room. If you still have a CRT that you use much it
is probably worth replacing it, the phosphors will be substantially diminished
in brightness so power consumption will need to be higher to achieve the same
colours/brightness as before and HD video is truly here now.

Progress is amazing (even if there are the odd dips on the way). I joined Sony
just as they were killing the non flat screen products.

~~~
elchief
I probably spent $500+ moving that beast across the country and back!

------
carlcoryell
Sony still hasn't apologized for multiple installations of rootkits on
customer computers. I lost all interest in the company after they made those
choices and I'm glad to see that a culture that tolerates such enmity towards
their customers and disregard for copyright (they were illegally using GPL
software in their rootkits as well) isn't doing well.

[http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootki...](http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootkit_scandal)

~~~
cryptoz
You're waiting for an apology? Last I heard, the President of that division
said he didn't understand why everyone was so mad. "Nobody knows what a
rootkit is anyway, why should they care?" I don't think we're ever going to
get an apology from them. If we did, it sure wouldn't make up for anything or
change my mind about them. They're evil bloodsucking monsters bent on the
destruction of quality technology.

I've been boycotting them since '05 due to that scandal. Fuck Sony.

------
tvwonline
I feel Sony never made the transition to software.

I have owned a lot of Sony products over the years and the older devices I had
like VCRs (which had little software) where infinitely better. For example the
a Blu-ray/Surround Sound System I bought a couple of months ago is terrible
and maybe one of the worst products I have ever bought. It takes 60 seconds to
boot up (So the Sony TV turns on and is displaying with in 5 seconds, but
there is no sound through the sound system for a minute!!!) in addition, the
DLNA client on the unit often becomes unresponsive and refuses to accept
simple pause commands while watching video.

In today's world, if you can't do software well, you will fail.

PS: I loved my Minidisc player back in 1999 - I was sad it didn't have more
success, well, up until I got my first iPod.

~~~
ChuckMcM
"I feel Sony never made the transition to software."

Actually it might be more accurate to say Sony has yet to make the transition
to 'systems' away from 'solutions'.

I also found it kind of funny a person talks about Game Consoles when talking
about Sony, that is a small part of Sony, historically Sony has sold products
where they manufactured all of the key technologies. They were one of the
first vertically integrated companies that I encountered. It can be very
powerful to be integrated in that way because you control your own destiny,
you make your own screens, you make your own electronics, you make your own
machines to make your products.

They got disrupted by the Koreans and the Chinese who started picking out
'parts' of the things that Sony made and making those so that others could
build 'Sony like' products without having to be vertically integrated.
Samsung, Quanta, LG, Hyundai, Etc. All willing to sell the part you want
against the others selling the same part, defacto standards emerge, change
happens at the feature level not the function level. Everyone starts selling a
'flat screen' TV and while we argue over Plasma vs LCD we get motion
compensation, viewing angle improvements, contrast tweaks, Etc.

So many things Sony did, and then tried to 'lock in' control. Their e-readers,
their computers, their TVs, their media players, their game consoles. Lock in
gave them control but people generally start rejecting external controls at
about age 13 and rarely get more complacent as they get older :-).

It will be very interesting to see how they evolve (or don't). But their asset
ratios aren't a problem it is their execution that is a problem.

~~~
duaneb
> Lock in gave them control but people generally start rejecting external
> controls at about age 13 and rarely get more complacent as they get older
> :-)

I would like to agree with you but for the success of iOS, Facebook, wireless
subscriptions.... At least in the US (I am not sure how much the US comprises
Sony's profits) people care much less about actual capability than they do
about convenience and marketing. Or at least that is what it feels like.

------
ekianjo
One of my japanese colleagues told me not so long ago: " _In the 80s people in
Japan were putting Sony stickers on their cars and motorbikes, because it was
such a cool Brand. Now nobody would even think about doing it_ ".

That's how low Sony has fallen. Take this as a valuable lesson that all
successful companies have to learn from: you have to keep fighting, and fight
hard, to stay at the Top.

------
dsr_
Sony builds great products, and never follows up well. They poison their own
name.

Walkman: the original portable media player. They improved battery life, they
improved sound, they captured the high-end of the market and inspired
competitors... but they could never reduce price while keeping sufficient
quality to differentiate a genuine Walkman from a 60% cheaper competitor. Did
they keep the high end? Sure, but they also produced crap indistinguishable
from their competitors at the low end...

Repeat for CD players.

Repeat for DVD players.

Repeat for the VAIO laptops. Remember when a VAIO was always a high-
performance ultra-portable? Now it means everything they do in computers.

~~~
ekianjo
Yeah, exactly. That's called Brand Dilution. Or Brand Flushing, in this
particular case.

------
troymc
In March 2010, Wired magazine had an article about how the CEO (Howard
Stringer at the time) was going to save Sony. The headline says it all:

"Saving Sony: CEO Howard Stringer Plans to Focus on 3-D TV"

It probably seemed like a good idea at the time. Avatar, the film, came out in
December 2009, was 3-D, and was hugely popular. You had to have a 3-D TV to
watch it in 3D at home. Other movies were being made in 3D. 3D was the future.
And then it wasn't.

[http://www.wired.com/magazine/2010/03/ff_sony_howard_stringe...](http://www.wired.com/magazine/2010/03/ff_sony_howard_stringer/)

~~~
ekianjo
Yes, somehow many people believed 3D TV screens would take off, and then they
did not. There were a lot of consumer surveys implying otherwise, however
there is no strong incentive to buy them. Could be chicken and Egg problem, or
simply the TV technology is not impressive enough to justify the premium.

------
ctdonath
As a longtime fanatic and now dismayed ex-user of Sony products, I'm startled
at what all the analysis missed: the last 10% of the user interface. What we
need is completion of the work done right with followup; what we get is "oh
crap, ship it and forget it".

A simplistic example: my Sony BluRay player, upon completing any network
activity, announces that it has completed the network activity. I don't want
to acknowledge that, I want to get on with what I'm obviously going to do
next. The same player features streaming video services which, next to Apple
TV, look like some techie was told to slap on; the worst offender being the
promotion app for "Salt" (movie premiering about the same time as the device)
delivers what should be premium video quality in the worst ugliest over
compressed dreck form.

Time and again it seems they take an otherwise fantastic product, and to meet
a deadline slap together what's missing, shove it out the door, and never show
any interest in supporting it thereafter.

~~~
prostoalex
Yeah, changing your PlayStation Store password on a PS3 with a PS3 controller
is basically half-a-day project. And no, you can't play the game until you've
authorized successfully with PlayStation Store because of some stupid add-on
that's mandatory.

~~~
djhworld
Yesterday I put in my credit card details into the PSN store as I wanted to
buy the critically acclaimed "Journey"

Entering CC details + billing address just using the PS3 controller was an
awfully tedious experience.

Initially I thought you could add money to your wallet via the PSN website but
navigating that was even worse

------
mikecane
Also of interest is this:

The Ghosts of Sony <http://www.japansubculture.com/the-ghosts-of-sony/>

And if you want to see some past glory:

This Was Sony <http://mikecanex.wordpress.com/2012/03/27/this-was-sony/>

------
ekianjo
Not a bad article, but obviously not written by someone who has much
background in Finance nor Business. Saying that "Sony has a culture where it
is OK to fail" is laughable, for example. How many companies out there are
widely successful? Most of product launches are so-so or fail to meet their
objectives, yet you do not see companies firing everyone every 6 months.
Iterations are necessary until you hopefully find a good proposition. It takes
time to get a hit. Now that's no excuse for Sony to keep pushing bad products
out of their chains, but of course, every company allows employees to fail at
least a few times. R&D is about trial and error.

Then I think the author is deeply wrong about quoting iSupply as a reliable
source for the cost of hardware. iSupply has NO idea of what the hardware
actually costs. They simply open a parts catalog and check how much each part
would be sold, one by one, and add it up. That is downright ridiculous,
because when Sony buys chips for their Playstation, they tell the supplier:
"Make me THIS price because I will buy 10 millions of your chips" and they
have huge advantage in negociations. So, iSupply and nobody else apart from
the supplier and Sony themselves know the real Bill of Materials. The rest is
pure speculations.

And saying Sony does not care about budget and is focused on engineers only
sounds false to me. If that was the case why would they produce their
Playstation outside of Japan? The Playstation 1 and 2 were the examples of
frequent cost reduction through their lifetime - just like the PS3 did as
well, with a big step down in price from the earlier years. I am pretty sure
Sony does not LOSE money on PS Vita either, and probably keep some margin
there to reduce the price later. Net, they are not losing money with the Vita,
and there is no need to "kill" it. They may need to further invest in it,
rather, for it to become a reasonably successful machine, but I am afraid they
do not have much cash to heavily support it seeing their overall financial
shape.

Finally, showing Return of Assets alone is meaningless. You have to compare Ra
from one business to another business in the same fields. Ra only makes sense
in comparison.

Let me add as well that comparing liabilities between Software heavy companies
(like Google and Microsoft) does not make ANY sense, since Google and
Microsoft do not own plants and manufacture much themselves (their may
businesses are advertising and second, software). It would make much more
sense to compare Sony's liabilities with Panasonic, Sharp, Mitsubishi... while
there is not actual company that covers the exact same range of businesses as
Sony.

Seriously, when you have no understanding of finances, writing this kind of
articles using numbers you do not understand rather makes you look like a
fool.

~~~
aes256
> How many companies out there are widely successful?

Obviously most companies mix successes and failures, but in recent years Sony
has been pushing out an unreasonable number of failures with no successes to
show for it.

I don't see any innovations coming out of Sony. I don't see them leading the
way in any particular sector when it comes to consumer electronics. In audio
products they're nobodies, in computing they make so-so non-descript
equipment, in photography they've lost almost all the ground they once had to
Canon and Nikon, in video they are being trounced by the likes of Samsung, LG,
and Panasonic, and in cell phones they've just about been wiped off the face
of the planet by Apple and Android handset manufacturers.

About the only sector they seem to be doing okay in is consoles, which from
what I understand are not massively profitable, and are on the way out.

~~~
ekianjo
I live in Japan and Sony has a showroom in Tokyo where they showcase all their
products in a single building. There is always some products I have never seen
when I go there. Not sure I can call them innovative, though... a few years
ago they had this egg-like music player that rolled on itself when playing
music. Utterly useless and I have no idea how this kind of thing even made it
to market. I am guessing there is some truth when this article mentions the
power of engineers when I see such things come to life.

But let's not forget that Sony's marketing is equally terrible. Even when they
have OK products they have no clear idea on how to sell them and how to
differentiate versus competition. In Japan they still benefit from the
complete absence of korean competitors (LG and Samsung are nowhere to be seen
and that's hardly free market at work here) so I guess they can keep selling
their overpriced TVs and Vaios for a while, but they are certainly taking a
beating in other markets.

Yeah, I have not seen anything fantastic from Sony for a very, very long time.
Net: we do not need Sony anymore. And if the information about the PS4 flowing
around is correct. their next console will be as powerful as middle-range PC
when it comes out in 2013(probably). Nothing to show off.

~~~
stickfigure
Can you elaborate on the absence of Korean electronics in Japan? I'm curious
about this - is it a cultural bias or is protectionism more formal?

~~~
ekianjo
I am not exactly sure what is the exact reason, but I can guess the following:
\- High tariff imposed on electronics from non-japanese companies
(protectionism) \- Distributor <-> Maker mutual relationship to exclude
cheaper alternative in order to maximize their profits and screw consumers

I highly doubt there would be some cultural bias - Japanese have no problem to
work with Chinese when it is in their interest. I think they are probably very
sensitive about letting Koreans take a bit on the Japanese market because they
would wipe all the Japanese brands in no time if they did, at least for all TV
and player systems.

------
Tloewald
I wonder if it might be more accurate to trace the decline to Sony's purchase
of Columbia. There's an intrinsic tension between the interest of the user of
an electronic media consumption device and the producer of content, and Sony
went from being on the side of the user — e.g. Probably being as annoyed by
the tax on cassette tapes as users were — to straddling the fence.

Sony was a very successful company in 1989 when it bought Columbia, and its
success masked the underlying problem.

You might draw an analogy to Apple here — as Apple becomes interested in
revenue from content it will face the same tensions (and perhaps already
does). Similarly, Apple makes most of its money from carrier subsidies now,
and is perhaps perhaps is now as locked into the Evil carrier business model
as its predecessors, even if it has thus far avoided junkware.

------
genuine
Sony's problem is that they need the next big thing.

They had the Walkman, then the Playstation (and 2 and 3). Outside of that they
are just like any other mid-level electronics brand to me.

Sony should invent something like a net-enabled helmet as a response to
Google's goggles that uses a transparent screen with fluorescing e-ink for
night use. Or maybe a personal home theater system where you wear the speakers
and the music "moves with you". There really is no excuse not to be original.

Fear prohibits success. Lose fear and you will succeed. Risk must be taken. Be
creative. These things must be embraced by any culture to succeed.

~~~
josephlord
They are still trying to be innovative but products like this won't save them:
<http://www.sony.co.uk/product/personal-3d-viewer/hmz-t2>

Yes this is actually a product available now from Sony. Innovative yes but not
really likely to succeed. It also contains the personal home theatre system
although the screens aren't transparent.

Now if they were really joining things up they would be making it into a
gaming system to make a lighter, better resolution less laggy virtual reality
system than those that knocked around in early nineties. That might actually
sell some systems.

They need to be profitable in mass market products. But they can't
differentiate there any more. They are relying on Google for the software
(Android phones and Google TV) for their cutting edge models. They don't have
the same degree of in house manufacturing to develop products and production
processes at the cutting edge like they used to (Samsung do) and they aren't
as good at managing/negotiating outsourced production as Apple are.

They do have content but that needs to survive as a business on its own and
does exclusive deals with MSO's for TV and Film and anyone for music meaning
that there is little exclusive to offer with their products whcih don't even
get a much better deal than competitors.

~~~
genuine
What today's gaming systems are missing are an evolved way to get users
involved in game development, the user interface for the system itself.

We need paid hardware running a free OS that everyone can contribute to and
that is community managed, where the company makes money on the hardware and
perhaps a service contract like a RedHat for gaming.

------
kamaal
Sony was famous because they made cool eccentric gadgets. Stuff like the
Walkman. They still do it, except that that coolness has moved else where(read
Apple). Its not that Sony is out. They have a very strong brand.

With Steve Jobs gone, Sony is one of those companies which will eat Apple's
share of pie. Of course if Apple doesn't innovate hard enough, and just keeps
pushing out incremental changes.

Want a television? Sony is still the go to brand.

------
smegel
Sony sail flew for far to long on the wind of expensive, high-end TV's. TV's
have become cheap, commodity items where "high-end" can now be had for less
than $1000, and Sony has not followed up its leadership in the TV market with
any other market in a substantial fashion (the relatively niche Playstation
market notwithstanding).

------
james-skemp
My first thought was that this would be a real test of what happens to newer
consoles where electronic downloads from a (closed) central source (DLC,
patches, games) are no longer available.

But after reading the article and comments here, I'm not too worried about
Sony vanishing quite yet.

~~~
zanny
I don't think Sony could "vanish", more like their valuation falls low enough
that someone buys them up at a "steal" for the brand and patent / trademark
portfolio if they get cheap enough.

------
na85
Good.

I can't friggin stand Sony's business practices, and I hope they crash and
burn.

They're predatory, arrogant, and self-congratulating. Always a new proprietary
device or technology that they will attempt to shove down everyone's throat.
Remember MiniDiscs? Or the SonyBMG rootkit thing?

------
buster
People DO realize that Sony is much more then "Playstation"?! I mean, this
article is mostly worried about gaming.. Did the author even look at
<https://en.wikipedia.org/wiki/Sony> ?

------
linpythio
The consumer market is changing everyday.Sony don't want to change,still sell
TV is a problem.

------
bravoyankee
Speaking of decline, I think Apple is starting what will be a epic landslide
of biblical proportions. Tim Cook doesn't seem to have any vision at all. The
iPhone 5 is a joke. It's a cop out. Tim Cook chickened out when he merely
elongated the iPhone.

Now Apple has that "blue sky" program in effect for employees, and I'm even
more convinced Tim is frantically searching for ideas to show him the way.

As for the late Steve Jobs, I was wondering if he had left some future plans
for Tim, but apparently not. He was dying. Apple was the most awe-inspiring
company in the world under Steve's leadership. He proved his point. I don't
think he was concerned about how well Tim would do or even if Apple survives.
The show was over for him, and I think it'll soon be over for Apple too.

~~~
gareim
You really believe that Steve Jobs, who was known for his ability to foresee
what others in the industry couldn't, didn't plan one year ahead for one of
his flagship products? No, the iPhone 5 almost certainly was a Jobs product.

