Deathwatch - will the Sony Empire fall in 2009?

We hesitated in adding a global manufacturer like Sony to Bitterwallet's Deathwatch list; it's all very well predicting the End of Days for Woolies and PC World, but not one of the best recognised brands on the planet, surely? Until you look at some of the facts and figures haunting the Tokyo-based company right now:

  • Sony have today announced plans to make 5% of its electronics workforce redundant - about 8,000 jobs
  • From July to September, the Japanese economy shrank nearly five times faster than Government predictions
  • Sony's profits fell by 90% in the last financial quarter, while warning that full-year profits would be down nearly 60% on the previous year
  • The company's share prices has dropped from over $57 at the beginning of the year, to just $20 today

Of course there's a recession going on, so what do you expect? The number of job losses, as significant as it sounds, is small potatoes when compared to the 160,000 employed by Sony's electronics division. And the point of such drastic action is to help save Sony over £745 million and ensure the company can weather the financial storm long-term.

But not everyone agrees with the strategy; not because they don't recognise the benefits of being shrewd in these interesting times, but because Sony simply isn't famous for anything in particular, and hasn't been for years. Televisions, laptops, speakers, DVD players - there's no one product where Sony rules the hearts and minds of the consumer, unless your name is Sam Beckett and you travel through time to the early 1980s on a regular basis. And it's this lack of core product that will be its undoing, according to many analysts - including Katsuhiko Mori at Daiwa SB Investments:

"The number [of redundancies] sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits. After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."

So who knows? Sony are on the official Deathwatch list for now (there's nothing very official about it, to be honest - it's written in biro) - unless anybody can give us a really good reason to take them off?


  • jez
    behave yourselves, Sony will not go under
  • Will
    I'll be devastated if this happens - I don't give a f*ck what people say - Sony make the best TV's in the world! I couldn't give a toss about Woolworth's in comparison to a fab manufacturer like this going under. I guess it shows people don't stick with buying quality any more, its all about £ and buying things from manufacturers like Hannspree.
  • Phil
    O dear. Sony fan boi alert! You do know Sony screens aren't made by sony anymore and your just paying for a brand name. Its buying blindly based upon a brand name that hasn't been any good for 5 years is all that keeps sony going now. I wouldn't hate them so much if they didn't keep push their own standards on everyone. I mean memory stick duo/pro/whatever. Everyone else uses SD/CF cards why can't you sony.
  • Wayne K.
    Ahhh, I think I'll sit back and listen to my iPod, or maybe watch my 40" SAMSUNG, maybe watch a Blu-Ray on my TOSHIBA, SONY who?
  • ungulator
    people love to hate on bony, yet without the playstation the console gaming market would be half what it is today, without sony the gaming industry wouldn't be bigger than the movie industry in net income, making billions a year, sony put vital competition into the emerging digital camera market, the early cyber shot models where cheaper and better than most cameas on the market, sony alpha cameras are very competitive and have pushed dlsr competition and gained vital marlet share from other more established companies, thet are very good cameras yes, sony bravia is overpriced a little, but not by a massive amount or they wouldn't have sold so many 40" screens recently - simple economics and competition mean many electronics have had to outsource lcd manufacture, but at laest if you are buying something branded a sony you know you are getting at least a good level of quality, the V series of TVs are notable, so no they have';t sat back while the competition has jumped ahead, samsung make some excellent panels and sony picked the right choice as they came to the market late! sony should have adopted SD at least 5 years ago, but you can't say the new sony S series is not a very good mp3 product at the right pricepoint, doing so will make you look ignorant and uninformed, it also runs on itunes and supports mp3,enough for me! and i own an ipod, they should have made a 32gb though, which they are losing sales on to Phil above, no, they have produced good products in the last 5 years: Sony alpha, and the newer sony mp3 walkmans, and the PS3 whilst not yet having quite enough good gaming content is a very good product, regardless of the price, with microsoft they have pioneered HD gaming, without sony there would be no xbox (which is also a very good console all agree - i'm a 360 owner) also sony bravia is a good product, look at 100s of independant reviews, yes, they are not the best TVs in the world, but at a minimum they are good TVs, most people don't buy blindly esp. as money is tighter now, most people with a brain make an informed decision comparing screens and revews first. ps3 or xbox through a decent bravia set is great, you obviously haven't seen this, as you make no examples to your rant the problems sony had in the mid 90s was having so many divisions often developing similar products independently, they need to streamline which they have done in the last 2 years, one thing is for sure though with the margins on electronic products now, and cheap and cheerful supermarket brands often selling very well, no one is safe
  • ungulator
    Wayne Kerr: Toshiba blu-ray? good luck with that! ;)
  • John T.
    "there’s no one product where Sony rules the hearts and minds of the consumer" Forgetting a little something called the 'Playstation' aren't we? Seriously, yes the Xbox 360 and Wii are competition to the latest generation console, but its not like the Walkman wasn't cloned by just about every other manufacturer back in the day. And with Blu-Ray having won the HD format war that gives the PS3 a pretty big edge over it's rivals.
  • Jassen
    I think the article somewhat misconstrued the info a little. Sony do make products that are very famous in some core markets, such as the playstation brand, and their lovely Bravia TV range. The problem Sony are facing is that even though they make these quality products, shockingly they are not generating the predicted profit on them. For most they are breaking even, or making losses like on the PS3. Sony have borrowed a lot of money from investors already earlier in the year, along with numerous law suits, and fiascos like the rootkit, and their batteries, things potentially look very grim for Sony! Ooops.
  • rr
    i swear sony needs to make a 40gb mp3 player. ipods are shit (and yes, i do have an ipod and yes, i do think its shit)
  • ARRE
    Hopefully this will never happen. Sony is one of the best consumer electronic/entertainment companies in the world.I own couple of Sony stuff over the past decade or so and I have never called their customer service.They are extremely well made and reliable. LG on the other hand,,,they can go bankrupt for all i care.Every single thing i buy from lg breakown within 2-3 years.
  • Matt S.
    As other's have said, surely SONY's flagship product is PlayStation. No Sony aren't making a ton of money on the PS3, but their plan was to use it to establish BluRay as the next gen HD format, and then reap the benefits of market penetration later. this succeeded but their plan didn't allow for the market to crash so very, very badly, the plan was long term, taking a loss now to get BluRay in our homes. But it will still be a good couple of years at least before BluRay takes over from DVD. Then Sony have a decade's worth of royalties to look forward to on every BluRay and player sold. And back in the days of Trinitron, sony really did make the best TVs, but nowadays in flat panel stakes, I'd say Panasonic must hands down be the best worldwide.
  • Shendow
    Bitch bitch bitch, god -_- retards that call you a fanboy even when it has notthing to with video games, here some words for all. GET A FUCKING LIFE YOU GOD DAMN RETARDS!!! -_- who cares want band a tv or any of that.
  • lia
    Fuck you, fuck this article, and fuck the people attacking Sony like a pack of hyenas. An economical crisis like this and the ONNNNNNNLY company people are focusing on are Sony when this will affect every huge company out there! Congratufuckulations, you win at the internet.
  • Tom
    Dumbest article on the internet as of today. Good day sir.
  • KW
    Sony is on the edge of a start of a big downward slide. They have gotten lazy is most departments and the competition has not only caught up to them but passed them up. Today almost anything with the word sony on it is overpriced and underpowered. TVs for example, outside of someone who thinks sony is some status symbol (it is not) there is no reason to buy one of their TVs, for the same price or less you can get a panasonic or samsung TV that is light years better in every aspect, roll down to a circuit city or best buy and the tv next to the bravia will look far better. I had the mp3 sony walkman and that is the biggest piece of expensive do nothing electronic junk i have ever bought, i hate ipods (had one) but at least they worked some of the time. Sony can't write software at all ie sonicstage. heck samsung makes a better blu-ray player than sony does. yes blu-ray won the HD war but i would guess that something else will come along and knock off blu-ray before it reaches the level of DVD acceptance, who is really going to pay $30 for a movie and $3-400 for a player. The ps3 is a great example of why they should be on this list, they got lazy after the play station 2 and assumed they would just sell ps3s like hot cakes, they are overpriced and pretty much fail as a "game" console due to lack of content and pain of development, and again the competition has surpassed them there in every way. the only saving grace to the ps3 is the blu-ray player which is its only edge on the xbox however is also its achillies heal since it is keeping the price for the console too high. Sony's only hope is to be the first to break into a product area or do a big upgrade on some of their existing departments to get ahead of the competition but you can't do that when you are firing people. you don't really think those layoffs are going to happen in the do nothing middle managment area, it most likely will come in the area of engineers and designers that could actually help the company.
  • Louis
    By the way, phil, you are right that Sony doesn't build their own lcd panel anymore now handing that to 3rd party (mainly Sahrp) to focus instead on oled panels. BUT all lcd panel in all lcd tv are pretty much the same anyways, what makes the difference betwen brands are the others components like the engine or backlite system, you name it...And sony are still making thoses component...Check reviews on cnet and other site, Sony make the best lcd tvs money can buy period. Just traight fact...This doesn't mean they are not overpriced and Samsaung can give you somthing almost as good for much less, but still....I agree that Sony is not anymore what it used to be but for sure won't disapear any time soon....
  • Myth
    Love u sony, hope for the best 4 u, cant add anything more to what everybody else said here, but its worth mentioning that sony has a gr8 movie publisihing arm, and u could kiss a couple of movies goodbye with out it, and its not like that sony alone is suffering but a whole world does
  • KW
    Louis, a quick check of cnet for sony lcd tvs, top 4 rated The Bottom Line: Although the picture quality of the stylish, expensive Sony KDL-52XBR2 falls short against like-size plasmas, it's still one of the best-performing LCDs we've tested. The Bottom Line: The 52-inch Sony KDL-52XBR6 LCD is a bit too expensive for the level of picture quality it delivers, but its styling and best-in-class black levels help its case. The Bottom Line: Sony's well-featured, smartly styled KDL-46Z4100 performs well enough, but its picture doesn't match that of the best LCDs. The Bottom Line: Although not quite the best HDTV we've tested so far, the wallet-busting, LED-powered Sony KDL-55XBR8 comes mighty close. Samsung top 4 The Bottom Line: Samsung's LED-backlit LN46A950 represents the peak of flat-panel LCD TV performance and picture quality, with a price to match. The Bottom Line: If you don't mind its red frame, the Samsung LN52A650 LCD TV will reward you with a massive feature set and excellent picture quality. The Bottom Line: A breakthrough in LCD picture quality with some issues, the LED-powered Samsung LN-T4681F will nonetheless impress the staunchest videophiles. Cnet has not reviewed the new samsung 8 and 9 series tvs yet,,, they are best out there, if you go to a store you will see them stand out head and shoulders above everything except the super expensive panasonic. Sony has fallen back in the pack with LG,mitsubishi,vizio,sharp they are not even close to the samsung/pansonics at similar size and price. and in the style of the tv department they really can't stand up the samsungs, those things look like a piece of fine art when turned off and are only 1.9in thick.
  • Rubisco
    I used to like Sony, avid user of PSX and PS2, but then the trojan DRM fiasco, deliberate removal of backwards compatibility on the PS3, making us wait 2 years with the promise of something that would blow the 360 out of the water but ending up with something roughly comparible in power, they've become anti-consumer in so many ways.
  • vouchers
    PS is the only profitable division in sony...
  • Daniel
    I have a PS3 and a sony tv, very pleased with both.. If sony would fall that would mean a disaster to many markets.. Personally i think people are aware of the quality sony produce and that will make customers come back.
  • simonb
    lets face it over the next couple of years theres going to be some big names coming down. Dont know who they are but It will be the ones that don't move with the times.i guess i would go with companies i haven't bought off recently (just like i don't use Woolworths much). They are a big company and if they get on the ball with pricing etc there shouldn't be a problem. I don't buy Sony because it's usually more than i can afford and it going to get like that for most people in the recession. why buy a sony at 600 when some other company can supply just as good at £450. I feel they've traded on their name to get a better price and now they are just run of the mill now amongst panasonic, lg, samsung, daewoo and should be the same price. I've just bought a Panasonic and love it why would i want to pay more for the basically the same. As a teen if you had a sony tv, hifi, walkman it meant something, now it just seems to mean overpriced. Apart from the ps3 which is a great piece of kit i wouldn't buy sony unless it was radically different ie the iphone.
  • F*ck F.
    You Sony fanboys are a blight on the gaming industry. Is it not obvious what Sony's goal is with the ps3? It is certainly not bringing a ground breaking gaming experience to gamers worldwide. It is to force that in-house media format blu-ray up gamers asses, then hope everyone else joins the fad. You dumb bastards just queitly bent over and said "go ahead". How does it feel to know that you're a little bitch, that is telling the greedy bastards at Sony that it's o.k. for them to treat gamers this way?
  • aphexbr
    Heh, not much maturity going on in the pro-Sony comments. Anyway, Sony are in difficulty for a number of reasons. From the tech-minded side, Sony have been sowing a lot of problems that they're now reaping. From trying to tie everyone into their own format rather than playing with standards (everything from the idiotic Memory Stick to Blu-Ray - which while it won, the HD market is much smaller than it would have been with one standard), to anti-consumer policies like the CD rootkit fiasco, a lot of people are boycotting their products. Add to that the fact that they aren't making significantly better products than many of their rivals in many areas and the disastrous launch of the PS3 (and the relative lack of compelling exclusive games, though the sales are improving - probably due to the BluRay than anything else. Sony don't make money on the console itself, so if people aren't gaming, Sony lose money). That leaves a brand that's significantly more expensive for no compelling reason - not good in the current climate. I think Sony's too big and too powerful to actually go under, but I wouldn't be surprised to see it split up into smaller chunks. The home electronics and videogame divisions could conceivable split off into a totally separate company, while the movie and music businesses could be sold off. I think Sony in its current form cannot survive a long worldwide recession, but the name will be around for a long time in one way or another.
  • Dumdumdumdumdum
    "Sure all these things are facts, but without context behind them they're rather meaningless." Didn't someone say the same thing after Sony launched and laid off some workers? Do you seriously think that if Sony where going under their government wouldn't bail them out? Pathetic.
  • Dumdumdumdumdum
    @F*ck Sony and their P*ssy Fanboys. If Sony fans bent over for Blu-Ray what did you guys do with the RROD. Get fucked up the ass with razorblades? Hypocrite.
  • Chris
    You fags do know that Samsung is like 40% owned by sony.. and do you fucktwits really think that one of if not the biggest Movie/music/gaming/computer/electronics company is going belly up look at this site you will find sony way higher than many of it's competitors so everyone shut the fuck up STFU!!
  • lelik
    rofl so many retards commenting. sony does make its own tvs. they make the xbrs in house. whats the best tv on the market? xbr. lol someone acutally said panasonic. fuckin moron.
  • ChrisWanker
    Looks like the Moderators are either on vacation or don't care. Personally, I would delete every single comment with a bad word in it. You guys can wage your childish fanboy wars without cussing like a bunch of pre-pubescent Nazis! BTW, I thought this article was rather informative. It's sad to see Sony in such near dire-straights. As it said, the current recession is not helping.
  • Louis
    KW :''The Bottom Line: Samsung’s LED-backlit LN46A950 represents the peak of flat-panel LCD TV performance and picture quality, with a price to match.'' Tha A950 is serie 9 and no better than the xbr8 but come pretty close.... I also wonder what the moderator is doing.... I also think Sony understand their situation and sony's product in their key sectors will improve in the near futur in order to regain market shares ....
  • Andy N.
    Dear oh dear, it seems there are so many here who are incapable of seeing the big picture. If Sony fail, there will be 160,000 more on the unemployment market, not 8,000. There will be less choice in the electronics market. There will be less funding for movies and less R&D into new (and hopefully improved) formats. And as for the game market, the only handhelds we'll all be stuck with the NDS, with it's increasingly childish catalogue (or NGAGE anyone? - no, thought not). Markets thrive from competition, prices raise on monopoly...... understand that and you will begin to see the scope of what we will be left with if Sony go under. Before the silly little boys start to flame me, I am not a Sony 'fanboy'. The only Sony product I own is a PSP, having sold my PS3 ealier this year due to lack of decent exclusive titles. Sony do need to clean up their act, that's very true and I think noone has mentioned the VAIO - a once premium PC brandname now dirtied by 'Apple' syndrome - overpriced, underspecced and sold on brand name and looks. So, grow up all you idiots wishing Sonys demise, as the death of such a large and high-profile multinational can only help to deepen the recession by further denting market and consumer confidence.
  • well w.
    Whatever a fan boy is I'm glad I'm not one..... Spose time will tell if this blog is just a wind up or based of facts. Watch this space...
  • ThisNewGuy
    There's a recession. If then by your logic, Google, Apple will also go bankrupt because, for example, Google's stock fell from over 1400 points to less than 400 points at one point. This is a recession, afterall. Sony doesn't have a recognizable brand? Vaio? Playstation? Bravia? Blu-ray? Seriously, you have to be absolutely retarded to not recognize a Sony brand.
  • Paul S.
    I'm trying to find the bit where I said Sony has no recognisable brands... of course there are plenty of brands Sony are recognised for. I think the question is, which of them are they dominating particular product lines, and I don't think any of them are, are they? Nobody absolutely has to have a Bravia tv, a Vaio laptop, an MP3 Walkman, and the Wii is the console to have right now, and has been for the past 18 months. More importantly, it's being marketed at families rather than individuals. It's become part of the family entertainment system, like Sky. It's played in pubs and clubs everywhere. Whether it stands up in terms to the PS3 in terms of technology or gameplay isn't really the point. Sony have to reinvent a product or launch a new line in the next 12 months that's a world beater, or (in my humble and entirely unimportant opinion) this particular division of the companny will be in trouble.
  • rr
    when sony launch the OLED screens next year, a lot of people who have commented will look very very stupid
  • Brian
    I'm putting this site on Deathwatch. Or hopefully Suicidewatch. This is really stupid. So Sony is laying off a small percentage of their workforce. Even 16,000 isn't much if you look at their total workforce. Over the next few months this will probably be normal for a lot of companies. They have to downsize if they have certain areas of their business not cutting it. No way does this mean Sony will die in 2009 though. If anything it means they'll be stronger in the future. Maybe if the American car companies would do this they wouldn't need Congress to bail them out.
  • David M.
    The person who wrote this article clearly has NO knowledge of consumer electronics if they make a ridiculous claim like "There is no one section of consumer electronics where Sony rules supreme". Have you ever heard of a games console??? The original Playstation and the PS2 both dominated the video game sector, Sony has been the ONLY console manufacturer worth choosing from for the last two freaking generations, what the heck is wrong with you??? Also, Sony stand to make the most profit from the sales of Blu - Ray, a market worth roughly $10 Billion! I'm going to assume that you weren't even aware Sony is the second largest consumer electronics manufacturer in the entire world, they have income coming in from everywhere you can think of, while they may not dominate in theese areas their ventures have turned a profit (Take the PSP as an example). If anyone is HONESTLY stupid enough to put Sony in the same bracket as Woolworths then they must have some form of brain damage.
  • Jared
    Hey Wayne Kerr, nice job trying to sound cool.... But Sony made Blu-ray so you actually don't Oh and Sony won't go under, they are too big and Blu-ray will take off
  • Paul S.
    Gah, rumbled. Though interesting that you say "dominated" rather than "dominates". The 8 track still dominates music formats, but only if you squint and don't look past the 1970s. I think the phrase you're looking for is past performance is no indication of future return.
  • David M.
    While it's true that Sony's PS3 games console hasn't had the easiest ride to the top, it'd be ridiculous to imply that Sony have already been trumped in the video games sector. The PS3 and Blu - Ray have very similar qualities. Both offer technology that they're competing consoles/formats simply cannot.......the downside of this is they both come at a higher price. However as we've seen with Blu - Ray players, once that price becomes more affordable mass consumer - adoption begins to take place. Nobody is going to opt for DVD's over Blu - Ray if they're both roughly the same price, which is why just last week in Japan standalone Blu - Ray players OUTSOLD DVD upslaing players for the first time ever. Not only did Blu -Ray players take over half the market share for that week but the statistics show that Blu - Ray adoption in Japan is replacing DVD's 1.5 times faster than DVD's replaced VHS. What does this have to do with the PS3? Simple, Sony DO have a price cut planned for the PS3 sometime next year (It may not be as early as Spring but it will definetly come). Once the PS3 hit the same price point as the Xbox 360/Wii (Or at least close to it) this generation will officially begin. According to Sony, the PS3 has actually sold more consoles at this point in it's lifecycle than the PS2 did during the same time frame. So PS3 adoption is currently OUTPACING PS2 adoption WITH the higher price tag..............and we all know how many PS2's got sold by the end of it all, don't we? In case we don't, it's 137 million and counting............. If anybody here thinks that the Xbox 360 or Wii would sell even one quarter of what the PS3 has sold at the same price then they're crazy. The only reason those consoles are appealing is because they're cheap. The PS3 is selling itself based on the quality of it's hardware (Blu - Ray player as an example) and the quality of it's games ALONE. Once the PS3 hits that competitive price point as well, you can bet Nintendo and Microsoft will be nervously looking over their shoulders. "Past performance is no indication of future return"? Maybe, however i think the phrase i'm looking for is "Current situation is no indication of future failure". I really don't think Sony have too much to be worried about, the money they are losing on PS3 hardware sales can easily be made up from software sales.
  • Rubisco
    Sony's biggest mistake was splitting the HD video formats. If they didn't have to rush out the PS3 in order for Blu-ray to crush HDDVD then they would have ironed out the performance bottleneck and the PS3 would have been a lot more powerful than the 360.
  • Deathwatch B.
    [...] Newsgathering body Reuters is running a story that Sony is likely to record an annual operating loss of over one billion dollars, following recent stories that all in the empire is not rosy. [...]

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