Quote:
Originally Posted by GA Russell
fjt, I would like to hear your Howard Stringer story!
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It's a long and ugly story but in short:
Until Stringer came along, Sony never sunset any business they entered. Cheap lead acid batteries for boom boxes, 60's style transistor radios, $5 earbuds, they had a hundred business that had long since stopped making money so the board put him in charge. But the corporate VPs and unit managers ignored their marching orders and kept on keeping on.
It was so bad that the Playstation chief, Kutaragi, lied to the board about the build cost of the Playstation three and on his own authority added a $499 model that was barely $10 cheaper to build than the $599 model. The first Stringer and the board heard of it was at the PS3 introductory presser. Some reports said the first PS3's cost $900 to build and Sony lost over $2B on PS3 the first year alone. By the time they got build costs to breakeven PS3 lost them more money than PS2 ever made.
In Japan, no exec ever gets fired. They just get reassigned to an irrelevant post in the company. Kutaragi got fired. Officially he was heading up a Sony funded standalone subsidiary but he was gone from Sony. That is a fired as a japanese exec gets fired.
http://www.gamespot.com/articles/wsj.../1100-6166821/
http://www.forbes.com/2007/04/26/kut...acescan01.html
Thinking the corporate types were ignoring Stringer because he was a foreigner, the board brought Kaz Hirai back from the US to be Stringer's Deputy and downwards interface. Still no improvement. In the end the board bought Stringer out, promoted Hirai, and sold off a bunch of units just to get out of those businesses. They're still bleeding but at least PS4 is cash positive and the TV business is no longer a sinkhole. I think they even made a profit for the first time in ten years.
They were trying to run a 21st century consumer electronics company by 1950 rules. Not unlike B&N trying to run 1990's style book warehouses in today's environment. Not a good fit.
Considering that by B&N financials they have somehow managed the feat of never ever making money off ebooks I don't think Boire or Leach are necessarily the bad guys. Maybe they are but there's deeper issues at play there.