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PlayStation's move to America won't change its DNA

By Rob Fahey

PlayStation's move to America won't change its DNA

Fri 29 Jan 2016 8:22am GMT / 3:22am EST / 12:22am PST
Business

Shifting the base of SCE from Tokyo to California seems dramatic - but PlayStation has always been an impressively international enterprise

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

"If it ain't broke, don't fix it" is a mantra that seemingly holds little meaning at Sony; it's just decided to undertake the most dramatic reshuffle of its videogame business since the 1990s right in the midst of stellar sales of its most successful home console yet. Business units will be rearranged and merged, organisation trees pruned and spliced, and most dramatically of all, the PlayStation business' headquarters will shift from Tokyo to California. News of the changes has, understandably, been mostly shrouded in that special version of the English language spoken only by corporate PR people (a dialect uniquely horrible and utterly meaningless), which has left many of the company's customers and even its partners wondering exactly what it all means.

In some senses, this is just tidying up. The separation between Sony Network Entertainment and Sony Computer Entertainment was a well-intentioned one at the outset; there was a future vision which imagined that network services, like the PlayStation Store and PlayStation Now, would eventually be something much, much larger than the PlayStation console itself. The idea was that Sony Network Entertainment would end up being a business unit that worked not only with SCE but with every other aspect of Sony's business, underwriting the future success of the company as a whole. That future might still come to pass, but things haven't played out as originally anticipated, partially because the company's grand plans for network services have been undermined by the success of rivals and partially because PlayStation has done far better than expected. As a consequence, Sony Network Entertainment presently mostly provides services for PlayStation consoles; it makes perfect sense for it to be brought together with the PlayStation itself. Optimistically, one can hope that removing this paper screen in the corporate structure will also help to fix some of the lingering problems with Sony's network systems, which are all-too-often an unreliable negative counterpoint to its otherwise impressive hardware and software.

"one can hope that removing this paper screen in the corporate structure will also help to fix some of the lingering problems with Sony's network systems"

Rather more dramatic is the move from Tokyo to California - and the rather less widely reported change to the company's global management structure, which will seemingly see the European, US and Asian divisions of Sony Interactive Entertainment (the new merged entity) sharing a single top-level management team. It's not clear whether this will have any impact on the actual independence of the regional teams - SCEE and SCEA always had quite a surprising degree of autonomy - but a structural change like this is usually designed to reflect an intended outcome, and in this case it's not unreasonable to expect that the regions will be working more closely together after the changes take effect.

What of that move to California, though? Isn't PlayStation, like Sony itself, quite intrinsically a Japanese brand? Aren't many of the values and qualities of the console and its software that actually appeal to consumers down to the fact that it's a Japanese creation? I've seen those arguments and plenty of others shoot back and forth over the Internet in the days since the announcement; and I have to confess, I have a little sympathy. In the eras of the PlayStation and PS2 in particular, the Japanese roots of the consoles were a major selling point; the systems became a window on to a world that was fascinatingly different, culturally and creatively, and I don't think it's unfair to say that much of the subsequent success of Japanese pop culture overseas owes a debt to the gateway drug of PlayStation. If the whole thing is now going to be based in California, is it going to lose that cultural value somehow?

" In the eras of the PlayStation and PS2 in particular, the Japanese roots of the consoles were a major selling point; the systems became a window on to a world that was fascinatingly different"

Well, no; I think fearing that PlayStation's identity will be lost in this move is a consequence of misunderstanding what PlayStation's identity has actually been all along. Sure, the Japanese origins of the console were a big and important part of its DNA, but if anything, the appeal of PlayStation since the early years has been founded in Sony's willingness to entrust the keys to the kingdom to its overseas offices. That exhibited itself in software development - WipEout being a key title for the first PlayStation is an early example of a tradition that went on to deliver pillars of support to the platform from overseas developers, from God of War to Uncharted to Killzone and plenty of others besides. It went further than that, though; Sony Computer Entertainment divisions outside Japan were trusted to develop key technologies and services that would come to define the future of the platform, and key staff from those overseas divisions became a part of decision-making processes at Sony in a way that has very rarely, if ever, been the case at PlayStation's rivals.

That's what leaves PlayStation in the situation it's in today - with one of the most impressively multi-national core teams you could hope to put together to run a platform business. From Sony boss Kaz Hirai on down, top executives on the PlayStation side of Sony speak fluent English and have extensive overseas experience; while people like SCE (soon to be SIE) boss Andrew House and PlayStation architect Mark Cerny have come to the company from overseas divisions, risen to enormously important positions and work seemingly seamlessly with the Japanese organisation. That might not seem like any great shakes in some regards, but in the context of a Japanese business, it's a big deal; it's indicative of a willingness on Sony's part to really embrace the idea of being an international business, not just a Japanese company that does some business overseas. That's the DNA of PlayStation, more than anything else, and it seems eminently unlikely that that's going to change with the move of headquarters to California. It's not like Japan Studio, the actual source of most of Sony's interesting Japanese titles, is going anywhere, and if Sony's commitment to Japanese game development wasn't clear, consider the enormous amount of cash rustled up, upsetting every damn budget in the company in the process, to ensure Hideo Kojima was on board after leaving Konami.

"at the moment only about one in every 18 PS4 units sold is being sold in Japan"

There will, of course, be changes; an organisational shift like this is expensive and messy, and Sony wouldn't be bothering to do it if it didn't want to see some changes. One can easily guess at one of the catalysts for the move; the Japanese market is less and less relevant to the home console business with every passing year, and at the moment only about one in every 18 PS4 units sold is being sold in Japan. In contrast, Vita does reasonably well in Japan, but is an irrelevance everywhere else in the world. It's not hard to see the argument that putting so much of the decision-making capacity for PlayStation in the heart of a market that no longer buys home consoles has the potential to warp perceptions and force errors. The creativity and imagination of Japanese developers is essential to PlayStation; the country's business environment and consumer market, by contrast, seems like an active impediment to Sony's success. Far better to put Sony's videogame business overseas, where it'll be in the same environment as Sony Pictures and Sony Music - the media arms of the company with which it arguably has far more in common than the remaining Japan-based divisions.

Plenty of analysts are spending plenty of time teasing out Sony's new structure and organisational chart to try to understand what will happen to PlayStation in future; the bottom line of what I'm trying to say here i that we shouldn't expect very much change in the short to medium term, at least not of the kind that will be remotely apparent to consumers. The firm may, to some degree, be ignoring exhortations not to fix what isn't broken; but it will also be keenly aware that PS4 is a goose that keeps laying golden eggs, and won't be waving any knives in its vicinity where possible (unlike the ones presently being brandished at me by the Metaphor Mixing Police). We can expect no major changes of course for Sony's console strategy in the next year or two; if there's to be real fall-out from this change, it will be in planning for the longer term, as the new management team tackle the question of what PS4's success means for the future of the once-presumed-dead console business.

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10 Comments

Craig Page El Presidente, Awesome Enterprises

501 341 0.7
Maybe they're moving to California to be sold for a higher price?

Posted:5 months ago

#1

Jeff Kleist Writer, Marketing, Licensing

724 483 0.7
It's much more likely in recognition of where the money is. Consoles are dying in Japan, and fewer and fewer Japanese developers are working on games for them.

This will allow for far better and faster support and communication, as well as tighter intervention with other Sony services

Posted:5 months ago

#2

Jeff Kleist Writer, Marketing, Licensing

724 483 0.7
It's much more likely in recognition of where the money is. Consoles are dying in Japan, and fewer and fewer Japanese developers are working on games for them.

This will allow for far better and faster support and communication, as well as tighter integration with other Sony services

Edited 1 times. Last edit by Jeff Kleist on 30th January 2016 4:03pm

Posted:5 months ago

#3

Adam Campbell Product Executive, Hopster

1,432 1,467 1.0
It wont change the DNA but it will change the attitude. I think in many ways, that's a good thing. Also, expecting fewer of the Cell or Vita style mishaps as Playstation continues to move away from the Sony of old.

Posted:5 months ago

#4

Sandy Lobban , Noise Me Up

378 312 0.8
Having worked for Sony, yes it will. It will save the PS department from draconian japanese labour laws and help its bottom line. No point exporting to your biggest market and suffering from currency fluctuations either. It just adds uncontrollable headaches to the business stability.

Posted:5 months ago

#5

Jeff Kleist Writer, Marketing, Licensing

724 483 0.7
Sandy, to which laws are you referring specifically?

Posted:5 months ago

#6

Sandy Lobban , Noise Me Up

378 312 0.8
The ones where you can't let an employee go without rational, reasonable, and "socially-acceptable" cause. Socially acceptable cause is vague and not helpful when trying to compete as a business in a global market. I'm not unsympathetic to employees, but there needs to be balance and recognition that the world doesn't owe you a job.

It has resulted in company's having "training rooms". That's the friendly name, where people are moved to when they are no longer needed on the job but can't be let go for one reason or the other. You can read a bit about them here....

http://japandailypress.com/japanese-companies-using-banishment-rooms-to-push-employees-to-resign-3029793/

Posted:5 months ago

#7

Jeff Kleist Writer, Marketing, Licensing

724 483 0.7
I'm familiar with Japanese labor law, but I certainly wouldn't call that draconian. It's the company practices that are, not the law. And certainly that wouldn't be a big reason they're moving operations here, and those have pretty much been covered

Posted:5 months ago

#8

Sandy Lobban , Noise Me Up

378 312 0.8
Considering I worked in the company for 9 years, I would guess I have a better understanding as to why the electronics sector dragged the company as a whole down for a long period of time, and why it struggled to keep pace with competition in china, but lets not get fixated on one part of a comment/opinion. Of course there are other reasons, some of which I also mention. Opinions are what forums are all about.

Posted:5 months ago

#9

Jeff Kleist Writer, Marketing, Licensing

724 483 0.7
Sandy, I'm extremely familiar with the electronics sector of Japanese tech companies. While I've never worked for them as an employee, I've worked with them and with people who are veterans.

I'm pretty sure we completely agree why the Japanese electronics business is so much in the toilet, I recognize the welts from head banging ;) Probably a good place to start is how home base saw the CELL as a Swiss Army knife they could stick in everything from elevators to microwaves, and seriously compromised it's design to attain those goals. And how the laser focus on the Japanese market often blinds them to what is the outside reality

Posted:5 months ago

#10

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