The famed electronics company Sony, who developed the PlayStation and raised the gaming industry to new heights during the 90s, might soon find itself retiring the PlayStation and allowing it to collect dust by Sega’s Dreamcast. But not for the reasons people think. It isn’t the hardware or even the game titles. In fact, Sony/PlayStation has some of the best in the market. Instead, the fault lies within an archaic management style and lack of innovation and creative thinking.
During the recent Microsoft/Activision buyout, Sony argued that Microsoft would use its dominance in the market to ruin Sony’s profits by making the Activision titles exclusive to the Xbox storefront or sabotage the PlayStation versions of the Activision titles, which Microsoft retorted by stating that Activision would continue to develop for the PlayStation.
Sony, by extension, PlayStation, however, did not want Activision to have the specifications of PlayStation products for fear that Microsoft would use them against Sony/PlayStation in saying that. They damaged their reputation. How, you might ask, did Sony damage its reputation? Sony/PlayStation admitted that they would be the reason Activision could no longer properly develop games for the PlayStation.
After the FTC and judges agreed to the Microsoft Activision acquisition, Sony went into damage control after irreparably damaging the trust consumers had placed in their company and with their stocks plummeting to an all-time low.
Sony’s form of damage control, however, was to irreparably damage the trust consumers had placed in the PlayStation brand by ordering all PlayStation-owned companies to lay off employees, including PlayStation Visual Arts studio who aided in the development of The Last of Us alongside Naughty Dog, Insomniac games, after the successful launch of Spider-Man 2, Bungie, which so far who has let go a reported 8% of its employees, and Media Molecule the developers behind Little Big Planet and Dreams, reporting layoffs of 15%-20% of their staff.
The problem Sony and the PlayStation brand have created for themselves comes down to trust, and what they failed to take into account are the communities that form around the games we play. I love playing Destiny 2, and to this extent, I know what happens in the Destiny 2 community, which Sony/PlayStation neglects to take into account with their business strategies, forgetting gamers are loyal to their brands.
Activision Blizzard is the best example with regard to what happens when you breach a consumer’s trust in the gaming industry. Following the reveal of workplace harassment and the Cosby room, there were numerous boycotts, in-house walkouts, and a federal investigation that left the company’s reputation so damaged that Microsoft was able to buy them out.
How is Sony/PlayStation damaging consumer trust with these game studio layoffs?
Well, the short answer is we’re not stupid. The long-form answer is that the gamers who grew up and grew older now have access to the internet and critical thinking skills.
We understand that these layoffs are primarily happening at Sony-owned companies, and we have the knowledge and skills necessary to discern that financially, Sony and PlayStation are not doing well, as their stocks have plummeted. Following the Activision buyout by Microsoft, and instead of management taking pay cuts, they have decided to lay off employees across the spectrum of PlayStation-owned companies, which has resulted in the delay of The Final Shape expansion until June 2024 for Destiny 2, and most notably, employees losing healthcare, benefits, and paychecks when Christmas is just around the corner.
There was an incident several years ago in the games industry that almost mirrors Sony and PlayStation’s predicament, and that was when a company called Red 5 Studios poor management drained the company dry, this ultimately led to the closure of its business and the shutdown of its game Firefall, all of which was due to upper management and poor communication.
Now, Sony/PlayStation probably will not end up like Red 5 Studios due to how much money they have stored away, like most corporations do. But that leads to the follow-up question. If they have money put aside like other multibillion-dollar companies, why does the management feel it necessary to fire their employees this close to the holidays?
In my speculative opinion, it is corporate greed, plain and simple. The aim of the management at Sony/PlayStation is probably quarterly bonuses that they might receive if the company turns a profit, or in this case, increase the value of the company shares. However, in doing so, they ignore the individuals in their employ who actively make those paychecks possible, causing irreparable damage to their brand, as a result.
But, tragically, this is not limited to just Sony/PlayStation, but the management and chief executive officers of those Sony-owned companies, such as Pete Parsons from Bungie and Ted Price from Insomniac Games, for being weak and not standing up for the people in their employ.
Ultimately, there are numerous things Sony/PlayStation can do to improve their fiscal earnings and not damage their reputation with the gaming communities they’ve spent years building up. Will I write about them here? Probably not, because I am not getting paid to do their jobs, but at this rate, I suspect Sony will be the next forerunner to leave the gaming industry due to how numerous their missteps have taken in the last several years.
If you are reading this, PayPal me $1000 USD, non-refundable, and I will tell you step one to fixing your company, or you know, you can hire me once I finish getting my business and management degree. What? $1000 will pay for a lot of classes in a non-profit University. I may be clever, but I am broke.
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