Ken Kutaragi In Doubt As to Sony Manufacturing Capabilities?

[jaxmkii]

the good

http://www.next-gen.biz/index.php?option=com_content&task=view&id=3785&Itemid=2

the bad and the ugly

http://www.next-gen.biz/index.php?option=com_content&task=view&id=3777&Itemid=2 :honor:

[chrismt]

Ken Kutaragi has conceded that Sony's power as a hardware manufacturer is "in decline".

http://www.next-gen.biz/images/stories/kutaragiclose.jpg Speaking to Reuters in the aftermath of last week's news of delays and shortages, the PlayStation 3's guiding executive said, "If you asked me if Sony's strength in hardware was in decline, right now I guess I would have to say that might be true."

Sony's shares, and PlayStation 3's reputation took a tumble last week after news that there would be only 500,000 units of PS3 for launch in Japan and the U.S, with a further delay until 2007 for the European launch.

Reuters quotes analyst Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. "All of this has raised concerns about whether there is something fundamentally wrong with Sony's manufacturing process. It could further damage the Sony brand."

Shinko Securities analyst Hideki Watanabe added, "I see a major risk that Sony's presence in the game market will weaken. Investors will have to start considering the possibility in the future that the game division will not produce any real profits at all."

http://www.next-gen.biz/index.php?option=com_content&task=view&id=3777&Itemid=2

Well, after Sony finishes being restructured, hardware may strengthen considerably.





EDIT: Realized that 90% of this article was said by someone other than Kuturagi.

[Nameless]

I guess one bad quote from a frustrated Kutaragi means gloom and doom for the PS3... One of the most pointless post I have seen in some time!
The PS3 will hold marketshare and more than likely Nintendo will keep their 3rd place spot... Peace

[jaxmkii]

there was no real "point" to this other than its ken... and he sayed something

[xbdestroya]

Ken has every right to be upset, afterall it's production failures in another branch of Sony that has caused his own division countless headaches with regard to the PS3 launch. If you've grown to understand Ken's personality, then you know he must be pretty pissed about this whole thing.

That said, the quote attributed to him is only half of what he said - he still exhibits confidence in the end result.

I'll post a larger portion of the original source:

...Under the latest plan, 500,000 units will initially be available, including about 100,000 in Japan and 400,000 in the U.S. By year's end, a total of 1 million units will be shipped in Japan and the U.S.—half of the original plan.

Sony plans to ship 6 million Playstation 3 units by next March, in line with original expectations.

To achieve this goal, Sony must bring its crystalline growing reactors online for mass producing blue lasers. The reactors were scheduled to come online earlier this year, but engineers failed to meet the ramp-up schedule.

"We have established a process technology for blue laser production," said a Sony spokesman. "We are already making blue lasers fabricated with a former reactor. But it took more time than we planned to tune the large reactors for volume production."

Sony and Nichia Corp. agreed to cross license blue laser technologies in April 2004. Sony has been readying its production system for blue lasers at its Shiraishi fab. Playstation 3 is for now the only application requiring large numbers of blue lasers, thus leaving Sony without an alternative supplier.

Said Kutaragi: "If asked whether Sony's level of manufacturing technology declined, I have to admit it under the present circumstance. But Sony intends to prove its technical capabilities by manufacturing the necessary number of blue lasers from now on."...

http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=192600057

[Nameless]

XB, thanks for posting the full comments and not just one negative quote...
Once again I believe the orginal post was just putting a negative spin on the information.

[xbdestroya]

Yeah no prob; it's especially terrible when an otherwise credible news source like Next-Gen decides to only post the sensationalist aspects of any given quote.

These are the days we're living in I guess...

Ah well, TGS soon. :smoke:

[jaxmkii]

^^^ up i dont smear sony... everyone else dose that to excess im just passing on what i found

[EvilTaru]

The haters have broken Ken's spirit!!!http://img.photobucket.com/albums/v500/EvilTaru/cry.gif

Don't worry Ken, I will defend the hive while you lick your wounds!!!http://img.photobucket.com/albums/v500/EvilTaru/angry.gif

I can't believe this system war thing is still going on after 10 freakin' years.http://img.photobucket.com/albums/v500/EvilTaru/cheesy.gif

[Freeman_JI]

Manufacturing aside is Sony in the same boat MS was with the original Xbox.

A very expensive machine that will never come close to breaking even?


I can't believe this system war thing is still going on after 10 freakin' years.

10 years think furthur back :)

[xbdestroya]

Manufacturing aside is Sony in the same boat MS was with the original Xbox.

A very expensive machine that will never come close to breaking even?

The surprise inclusion was the hard drive - I wonder what the plan will be for that in the future? But even then, it just depends on how cheap the console gets. Five years from now, if the PS3 cost $200 (for the premium), I would see that as definitely being profitable for Sony on the hardware side.

[ddaryl]

Manufacturing aside is Sony in the same boat MS was with the original Xbox.

A very expensive machine that will never come close to breaking even?





I predict billions in profits for Sony, just like the PS2 and just like the PSX.

[Crossbar]

The surprise inclusion was the hard drive - I wonder what the plan will be for that in the future?
My bet is that the 20 GB HD will be some kind of flash memory five years from now. Today you can find 1 GB USB memories for less than $20. Five years from now you will get 20 GB for about the same price and year 6,7,8,9,10 the price will continue down in a way that the HD never will.

Remember the Wii will ship with 512 MB flash this fall.

Yesterday I read this article about a new cheaper type of flash that is under development. Things will only get better. ;)

http://www.eetimes.com/news/semi/showArticle.jhtml?articleID=192700709

[VG Aficionado]

I've been thinking the very same thing Crossbar, and I thought Samsung's new flash memory could be the solution! +rep!

4 or 5 years from now, Sony may release a smaller PSThree with 45 nm Cell & RSX, an even smaller Blu-ray drive (what could be smaller than a slot drive? An open-top drive?), a small external PSU and 20 GB of standard HDD-competitive flash memory (optional bigger external USB 2.5" / 3.5" HDDs supported).

[pari]

Manufacturing aside is Sony in the same boat MS was with the original Xbox.

A very expensive machine that will never come close to breaking even?


10 years think furthur back :)

I do not see that, SONY manufactureres most of the component internally except for the GPU (PSone GPU was not SONY made either).

Its still MS thats in the lonely boat, the external harddrive MS sells for 360 determines the width of the 360. If they want to redesign the 360 and make it smaller then where would MS put the harddrive, internal? Then all the harddrive that are being sold now is not usable...

Harddrive cost almost remains same, but increase the harddrive capacity for the same price. iPod is a perfect example, increase the capacity for the same price. PS3 price would come down, once SONY starts doing more SOC to shrink the number of component chips, reduce the PCB size, mass produce optical drive (Blu-ray) CD-drive and DVD-drive have shown that.

[yoshaw]

The surprise inclusion was the hard drive - I wonder what the plan will be for that in the future? But even then, it just depends on how cheap the console gets. Five years from now, if the PS3 cost $200 (for the premium), I would see that as definitely being profitable for Sony on the hardware side.

I have only one more thing to add to the already awesome post by Xb above.

Five years from now, Millions of PS3's bringing Bluray disc revenues for Sony and partners. Infinite potential for gaining back some profit caused by launch ordeals.

[masteratt]

My dad read in a tech mag (i'll give the name later...im not gonna call him at work just to ask that lol) and they say that PS3 might not be able to come out at all for another year due to very complex production problems and I think he said there was an interview with the president of Sony regarding this issue.

It's good that my dad took the time to read an article about the PS3! He asked me what the real deal was and..Well if I quote what I said, it will just sound like fanboyism but let's just say it wasn't very nice on my brother (who my dad helped with his X360 funding).

[Crossbar]

I have only one more thing to add to the already awesome post by Xb above.

Five years from now, Millions of PS3's bringing Bluray disc revenues for Sony and partners. Infinite potential for gaining back some profit caused by launch ordeals.
Good point! Blu-ray movies will also help drive the demand for large HD-TVs where Sony at present is the player with the widest range of 1080p TVs AFAIK.

I think they will have a pretty good margin on those hi-end screens.

[xbdestroya]

Well I think Sony definitely has in mind to (hopefully) cash in on Blu-ray via PS3; else I don't think we'd even be seeing the drives included at all at this point.

I've wondered about the move to flash drives before for the PS3... do you think the price of 20GBs will come down soon enough to eclipse a mechanical drive? 'Soon enough' is a relative term, but I do think for the next five years, the drive (in whatever form) will subject the PS3 to a fixed ~$30+ in extra costs.

Blu-ray drive manufacturing costs are definitely going to plummet though, and 45nm by then is a given. So at least for the rest of the components, they should scale down in cost fairly well. But yeah a 'PSThree' with a small external PSU and in-built flash storage would definitely be appealing five/six years from now.

[Applefiend]

I'm a Macintosh Developer, hence the Applefiend. And you do notice the difference between Apple and Sony. Both consumer electronics/PC manufacturers, Apple full of guys worshipping Steve's every move, happily buying a new heavily marked up iPod just because they come in a new colour, guys on rumour sites following Apple's every move, wondering what incredible thing they'll come out with next.

There are Apple haters of course. They just get told to **** off and buy a Windows PC with a knowing laugh.

Sony everyone upset at Sony, complaining about the prices even though Sony are actually making products much better value than Apple, and getting no credit for that. Every single manufacturing problem Sony has gets splashed over every fan site. Rabid disinformation campaigns.

What Sony have, is an insipid bad PR problem.

[Crossbar]

I've wondered about the move to flash drives before for the PS3... do you think the price of 20GBs will come down soon enough to eclipse a mechanical drive? 'Soon enough' is a relative term, but I do think for the next five years, the drive (in whatever form) will subject the PS3 to a fixed ~$30+ in extra costs.
Well, I am actually willing to bet it will be down enough within 5 years.

I just googled some prices and came up with $12.95 for a 1 GB sd-card here:
http://www.techbargains.com/news_displayItem.cfm/69370

The flash memory prices has roughly been cut with half the price each year.
I don't see that stopping with more and more products adopting them and new cheaper technology under way.

The future is bright. :)

[xbdestroya]

Well, *if* the NAND that went into making the PS3 drive could presently be priced at ~$12 per gig (different NAND beign priced differently of course, and SD usually getting the cheap stuff), and *if* indeed it went down by 1/2 each year, then by 2011 20GB of solid-state inclusion could be down under $10.

That would definitely be great, but at the same time we know that these cost-reductions go hand in hand with process shrinks. We're already working with 65nm stuff in the Flash market, so really I'd say for Flash maybe 32nm by 2011 (since Flash is easier to do)... not sure how much lower though.

So that'd be only two full shrinks rather than five - unless there's something I'm missing or not understanding about the memory industry that is going to allow densities to increase in ways unrelated to fabrication technology. I will admit that all these companies' targets include a much more aggressive density-increase than two node shrinks over five years would indicate.

[Applefiend]

If indeed Sony even need to include 20GB storage with a cost reduced PS3. 10GB would be just fine for a casual gamer.

[Viper]

Ken speaking with humbleness!!!! Where the hell has this attitude been for the past several months (years?)? Please, remain humble like this. The arrogance was annoying as hell.

[xbdestroya]

I don't think he's speaking with humbleness... I think he's speaking with bitterness! Or maybe equal parts both. ;)

I have no doubt that Kutaragi believes that if he had been CEO during this time, the Blu-ray ramp-up would not have goen as poorly as it has. And, to an extent he's probably right. Him and Stringer just have different areas of focus they gravitate towards.

During TGS, it's the arrogant Kutaragi I want to see on stage though. :smoke:

[Smokey]

I'm a Macintosh Developer, hence the Applefiend
the first computer i ever used (or seen for that fact) was a Apple Macintosh (were they called Macintosh back then) colour screen, in year 5 i think lol

[yoshaw]

During TGS, it's the arrogant Kutaragi I want to see on stage though. :smoke:

Amen! :angel:

LOL