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When it comes to the technology industry, Sony has always kept up with the times, and is often one step ahead of other companies. Ever since the company was founded, it has always funded and developed new technologies, pushing in entertainment industry further than most other companies ever have. Due to that fact, it has been targeted, and fought against other companies, who aim to share a portion of the entertainment market. Sony does pose a threat to all other entertainment companies, with more recently being attacked by Microsoft (due to their x-box product) and their fans. From this competition however, Sony has learned to adapt and often work with Microsoft, or out-sale them in many ways. With their play-station console system, they often buy rights from companies to only release their game on their system. This innovative thinking means more customers are required to buy the play-station console, if they wish to play the new, popular games.
On top of console exclusives that to generate large profits, they also have an interesting business model, which they release, and update, usually once a year. Currently, their business model, plans to re-invest most of the money they earn, for a chance at a much larger profit return. Most of Sony’s profits have always been from music, but due to gaming increase, they have updated their plans to increase the gaming profits by a large percent; 300-500 million more a year. This is due them utilizing the digital age, since not many people purchase music anymore, opting to use streaming services such as Pandora or Spotify. While music is one of their largest industries, with a whopping 4.5-5 billion in sales a year, gaming profits are quickly climbing to meet these numbers. “Game & Network Services is Sony’s largest growth driver within our mid-range plan. In this segment, PS4 is continuing to achieve strong results. The platform as a whole, including software and network services, is receiving widespread customer acclaim, and has surpassed our initial expectations for profit growth.
As of May this year, PS4 has cumulatively sold more than 40 million units worldwide, continuing its rapid growth and expansion as the fastest-selling console in play-station history”
“Corporate Strategy Meeting – June 29, 2016” (sony.net) Sony is also very quick to jump on popular trends, often being purchasers of newest trending games in a specific genre, or negotiating contracts with rapidly growing artists. When an artist is seen trending on music-platforms such as iTunes or Spotify, or in the industry in general, and they do not have a contract with Sony, often agents will attempt to negotiate a deal with them, in hopes they work with Sony. Not only do they do it often, they do it well, signing up hundreds, upon hundreds of very now-successful artists, through the way they monitor trends. Sony has undercut several major music-industry companies, by either taking their artists or getting them better deals before they sign up. It is not only because of the size of the company, but their name being known for having great technology for recording equipment for their artists that help the company grow. In fact, Sony was one of the first companies to get into producing digital audio, in-turn setting them to become the industry giant they are. “Nakajima was one of the first to actually produce digital sound. He achieved this by sampling sound waves at defined intervals. Each sample was then converted into a binary number that could be recorded as a series of pulses on magnetic tape. This was the basic process used to digitize sound. At the time, no one could really see any future in Nakajima’s large and expensive digital tape recorder, which reproduced static noise.”
“Making Digital Audio a Reality” (sony.net). Noticing the trends in improving audio quality technologies, they jumped at developing their own, and is one of the reasons we today have digital-format music. One thing they could learn about using their company-stature to progress, is that their status in the imaging and picture formats are decreasing. They are not known as people to produce high-quality and cutting edge digital imagery. While they do have a stake in the movie industry, they do not use what they learned there in terms of getting better capturing products to the public. Their picturing solutions division of their company is the lowest funded section, and also the lowest in terms of money-back opportunities. Following their own examples in past history could make them a giant in picturing-solutions, however with their recent plans to even undercut the funding more, it likely will not happen.
As mentioned earlier in the document, Sony has taken up a wide market, ranging from video games, to music, all the way to featured films. It manages them well, but does have serious competition. One of its biggest and recent failures in the technology industry, is that of its digital cameras and televisions. This year they reported an overall loss of one billion dollars, due to these product lines failing; resulting in three Sony plants closing, with more to close in the future. Being out-ranked by its competitors such as LG, they are diverting resources away from the television and camera side of the industry, possibly may even, stop developing and working on them in the near future. With multiple plants closing they stated they are going to use the extra funds from that to help build a net-gain again on these televisions; however with them being so far behind in this market due to non-enough funding, it’s unlikely they will catch up anytime soon.
“Sony, which makes Bravia flat-panel TVs and Cyber-shot digital cameras, joins a string of other big Japanese corporate names, including Toyota Motor Corp. and Hitachi Ltd., that are announcing huge losses. Sony is closing three plants in Japan by the end of December — one for cell-phone cameras, another for video recorder parts and another for systems used for smart cards. After they are shuttered, the number of Sony’s global plants will dwindle from 57 last year to 49.”
“Sony reports $1B annual loss; sees more red ink”(Yuri Kageyama). Not only do they have competitors in this range, they also need to fight against their video-game competitors, such as Nintendo, Microsoft, and the PC Market. With the PC market exploding in recent years, Sony has started to attempt to mend relations with other companies, even going so far as to announce they are willing to share game-servers with Microsoft. This would allow players on either consoles to play with each other; a smart move for Sony, but since Microsoft doesn’t need the extra profit, they haven’t accepted the deal. Cheaper computers with better graphics capabilities are being produced daily, and that is cutting big into their profits. Their ideal solution, and only one, has been to upgrade their play-station devices. By increasing the graphics output, game quality and putting out more exclusives on the market, they are actively leveraging their product in the market. If you can’t play a game you find exciting on any other console, you will be forced to play on theirs.
Sony has always been a global leader in technology. It never was the one to report loses. Yet due to these competitions in the market, they reported that one billion loss; a first-time loss for Sony in over 14 years. Sony got its true and proper start with radios.
Sony started out as a small-struggling business making not much profit and only pushing out a small amount of products. When they introduced their “TR-63 Radio” into the United States market, it exploded with popularity, soaring their products produced from 100,000 to over five million units. This resulted in them being known for quality products and audio; which the company is later fully built on. They went on to challenge the capabilities of audio, making revolutionary changes, beating out the audio giant Dolby Digital, by introducing 7.1 audio, instead of Dolby’s 5.1. “In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound format with a newer and more advanced proprietary motion picture digital audio format called SDDS (Sony Dynamic Digital Sound). This format employed eight channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time.”
“Audio Encoding – Sony” (Wikipedia) Sony went on to do even greater things, branching out into more and more useful technology niches. One of the most important during their start, is that of the digital audio recorder. Not only had Sony developed a way to convert older audio into digital-format, they could now record directly in clear-digital format. This gave them the competitive edge they needed. With the profits made from the audio, and digital-formatting use, they went on to get started into the electronics industry; making disk storage, flash memory, and optical storage. This bloomed into the Sony brand products we know today such as Sony portable computers, play-station entertainment system, and the ever modern play-station virtual reality headset; which is currently projected to do really well in the virtual reality market.
When it comes to utilizing technologies, Sony knows how to draw people in with it. Their modern gaming console, the play-station 3, used an advanced graphics card for its time, the Nvidia RSX. This card was special made for the console, and is based off an already existing PC graphics card, the Nvidia G70. Since this was used, it gave the play-station the power needed to boost its popularity in the gaming market. Yet one of the most astonishing things about this, they figured out how to run games very well, on only 256mb of ram; to put that into perspective, windows 95 could use up to 2 gigabytes of ram. It used virtual memory to swap data around, so the load is not all on the ram, making it efficient with its ram; the system is able to run more on less ram, saving the company money. On top of that they managed to fit a quad-core CPU inside the console, essentially unheard of for its time of release. Now, their newest console the PS4, has 8gb of ram, more than a lot of PCs today. This only boosts its popularity more, showing that Sony knows how to utilize breakthrough technologies; meaning other companies must follow their lead, or get left behind.
Building a SWOT analysis, we can really see how the company views themselves, and how it works to run smoothly. For example, some of its obvious strengths are: Utilizing technologies new to the market, finding ways to reduce cost and no interference to the user, or finding and pioneering new technology systems. Its weaknesses would be: Often investing too much at the start of a new product (risk of failure means great loss), still behind the PC market, but close, and doesn’t do a lot of outreach with its users and just assumed what they want. With its opportunities, you have: Increasing Graphics output on new consoles (which they have started to take advantage), in their music field, they could find more well-known artists to work with their brand, and get out-reach from Sony-product users. Lastly, its threats are: Other companies moving into their business (such as Microsoft), companies out-doing them (PC Market), and the entertainment industry pertaining to visual products (such as televisions).
Trends are a big thing to follow in the technology industry; and Sony knows this. They are monitoring trends and making sure to keep up with them. They know currently a huge trend is the smartphone industry cameras, as almost everyone has one in today’s world. Yet the quality of cameras has not improved much. While some phones can have a very large Megapixel size, most smartphones only have around 5 to 10 megapixels. Which takes decent quality photos, but no-where near professional photos. “At the same time, in terms of image sensors for mobile products, while the smartphone market itself is slowing, the shift to dual-lens cameras and the requirement for higher pixel density is expected to lead to increased demand in the future. With its technological expertise in these areas, these could be favorable market trends for Sony. By taking advantage of these shifts in the business landscape and also by continuing its existing efforts to expand sales volume, Sony is aiming to revitalize the profitability of this business from the second half of FY2016 and into FY2017.“
“Transformation into a highly profitable enterprise and establishing the foundations for the future”(sony.net) In conclusion, Sony has made a huge name for it-self in so many industries (technology being well-known), and it will continue to be a technology industry giant. They are releasing brand-new cutting edge technology each year in their systems, headphones, and all other products, because they have the resources to make it happen. They can use the funding from the movie industry and music industry to fund this, which helps consumers get good products for their money. At this time, the play-station and x-box market are very close. Judging from the plans of the company, and the views from the public eye, Sony will surpass Microsoft by a large margin, in the future, and end up dominating the entertainment industry even more. With their investments, showing their plans to the public, and holding events around their products, they create a trust with the consumers. That trust is going to keep a person using their products for generations (as their kids will end up going with the same company for products). Sony has setup their entertainment technologies so that when it comes down to it, they are ahead of the competition, and will remain ahead.
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