Is Sony’s Gaming Business in Trouble Despite the PS4’s Successful Launch?

We know that Sony’s Electronics and Entertainment divisions are hemorrhaging money.  But is Sony’s gaming business in trouble too?

This question sound like utter nonsense at first … after all, the Playstation is selling like gangbusters in North America and Europe, eclipsing even Sony’s 5 million unit sales target for the current fiscal year.

However, there are some signs that all is not rosy inside Sony right now.  Worrying signs.

First, there’s the announcement that Jack Trenton, CEO of Sony Computer Entertainment America was leaving the company.  Jack Trenton has been an integral part of Sony’s PlayStation business since 1995.  He’s been a very public face of the gaming side of the company, handling keynotes at E3. He’s well-liked by gamers and the gaming press.  His sudden departure will remain a mystery for now (thank gag clauses in contracts for that) but it certainly doesn’t look good, especially after the successful PS4 launch.

The second worrisome signs are key departures at Sony’s internal game development studios, which are key to the PS4’s long-term success.  There were substantial layoffs at Sony’s Santa Monica studios, developers of the God of War series.  There was also the departure of Amy Hennig, one of the developers of the Uncharted series.  Even more troubling is the departure of Jamie Griesemer from Sucker Punch, lead designer of “Infamous:  Second Son”, the PS4’s first-party exclusive crown jewel.  When devs start leaving the roost it means there’s trouble, or little faith in the company’s future.

Finally there’s the PS4’s collapsing sales in Japan.  My Gamestop source attributes the rapidly slowing sales of the console over there to “xenophobia”, and there’s certainly an element of that.  Sony making Mark Cerny the public face of the PS4 did not help matters, or its generic internal PC hardware.  But the main problem is that game developers in Japan haven’t warmed to the PS4.  They’re happily developing games for mobile platforms, which costs them less and makes them more money.  Everyone over there wants to make the next Monster Hunter or the next Puzzle & Dragons.  Whatever console development remains over here is focused on the PS3, which is still selling and has the JRPGs and dating sims that Japanese gamers crave.

So what will Sony do?  It has one advantage:  its CEO, Katz Hirai, is a games guy.  He understands the business, and what his customers wants.  If anyone can overcome all these challenges (draining talent pool, finding success in Japan) it’s him.


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