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Wednesday, September 28, 2005

The Big Picture

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Every time I try to write something about how SOE fits into the big picture at Sony, I end up driving myself crazy.

Let me give you an example. Where, exactly does SOE fit in on Sony's organizational chart? You would think this would be an easy question. Well, their press releases say they are a subsidiary of Sony Digital Pictures. And in turn, Sony Digital Pictures is a business segment of Sony Pictures Entertainment. Sony Pictures Entertainment is a subsidiary of Sony Corporation of America. This finally leads us to Sony.

Have a headache yet? I sure do.

It's worth noting that Sony's main game development studio, Sony Computer Entertainment, seems to be under an entirely different section of the corporate umbrella.

To make things more confusing, SOE apparently publishes PSP games like the Brotherhood of the Blade game I gave away. They even have a "label" called "
Platform Publishing" which seems to specialize in games with mediocre reviews like Gripshift and Frantix (to be fair I haven't played either). I'm guessing this is an SOE undertaking because the PSP's wireless capabilities put it under the online entertainment aegis. But then again, Sony Computer Entertainment also publishes PSP games, like Wipeout Pure.

Sony Computer Entertainment
recently announced that it would be combining the North America, Europe and Japan divisions of its game development studios under the catchy banner of Sony Computer Entertainment Worldwide. And, no, that doesn't include SOE. But with quotes flying around like: "By combining the wealth of creativity and talent of games development we can dramatically change the landscape of computer entertainment," you have to wonder, why not? When I ask this question, I'm speaking not as a gamer, but as someone looking at the vast Sony tree from an organizational standpoint.

And it's pretty gloomy around Sony these days. Profits have been down, the IPod is the new Walkman and Sony electronics just don't have the same premium in the public eye that they used to. The new Welsh-born CEO of Sony, Howard Stringer,
recently announced massive cuts:

"Sony Corp. revealed a reorganization plan Thursday that includes cutting 10,000 jobs, closing 11 manufacturing sites and trimming $1.8 billion in costs over the next couple of years. The consumer electronics firm also said it plans to sell more than $1 billion in non-core assets by the end of fiscal year 2007. The company said it has identified 15 business categories it may downsize or dispose of, and it plans to reduce the number of models by 20 percent compared to fiscal year 2005." Rumor has it that poor little puppy Aibo may be on the short end of the money stick.

What's more,
Business Week Online calls it a "fight to unify Sony's fractured organization." It also seems that stock analysts were unimpressed because the measures were not drastic enough.

Do I have an EQII point here? Okay, maybe.

We have a gigantic corporation that has been having a problem turning a profit. We have a new CEO who is gung ho for slim-lining the organization and reducing redundancy. And then we have a relatively small gaming subsidiary which for some reason is not part of the main games division.

I think a lot hinges on whether SOE is still turning a profit or not. I imagine they were raking it in pretty good back in the glory days. I'm even willing to bet that the original Everquest is still a money-maker. But is EQII earning enough to surpass its costs and ongoing expenses? I honestly have no idea. I'd love to know, but I don't see that happening.

And why does SOE seem to have such independence from the mother-ship (which is probably a good thing from a gamer standpoint)? I'm pretty sure that when Verant agreed to be re-acquired by Sony as SOE, Smed and the rest of the Verant crew were probably able to wrangle some pretty great assurances out of Sony that they would be left alone to do their own thing. If you consider that Verant had gone out on its own and basically did the hard work of turning EQ into a huge success, the Verant team was in a position of power. And I'm thinking that the SOE management has worked hard to retain that independence. They have apparently done a good job of that and I congratulate them on it.

But how long does the leash last? Is it when SOE stops making a profit? Is it when the old network is replaced by new management who doesn't remember or care about the old days? Or is SOE completely immune to the trials and tribulations of its parent company?

And will any of it affect the game? Has increased pressure been behind some of the more controversial SOE money-making schemes of late?

I have no answers to any of these questions, but I'm just trying keeping you up to date on the big picture at Sony.
And my knowledge and understanding of these issues is limited at best, so take this post with a grain of salt.

Stringer said, "We must fight like the Sony warriors that we are." I just hope warriors weren't nerfed.


Anonymous Anonymous said...

But is EQII earning enough to surpass its costs and ongoing expenses? I honestly have no idea. I'd love to know, but I don't see that happening.

im not too much into american accounting law but after the german accounting standarts they would have to publish their financial report (assuming they are a public company which they must if another company owns them). as they dont seem to publish their financial report on the internet (which they dont have to) im pretty sure u should be able to get it in the town where they are "registered" (hope that makes any
sense :P)


6:22 AM  
Anonymous Anonymous said...

i was told about a government website that holds and publish all companies annual turn-over.

i'll try to find the address.

7:11 AM  
Blogger Anskiere said...

my head hurts

10:56 AM  
Blogger Twodragons said...

Combining all the divisions is a bit SCEW'd.

And then we'll all be SCEW'd.

12:10 PM  
Blogger jaipehg said...




12:16 PM  
Blogger jaipehg said...

This comment has been removed by a blog administrator.

12:17 PM  
Blogger warm_machine said...

Great post Aggro! Yes, it's a little confusing, but I deal with several "divisions" of SONY empire where I work.

Some have it together, and some don't, but either way it seems redundant. Take for example, you have a division that distributes music, and under the same company you have a division that makes CD-R/W drives.

It doesn't take a genius to see that in the wake of the whole P2P revolution, that those two arms of the corporate beast are kind of contradictory to each other. Perhaps it's corporate big-people math that my tiny brain can't understand, but if that was the case those same minds should have been able to avoid the need for $1.8 billion dollar cuts. IMHO

SONY isn't what it used to be, but as long as they leave Everquest franchise alone, all will be well in my universe. =P

1:12 PM  
Anonymous Jhonus said...

hey gripshift is an awesome game!

9:18 PM  
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