Sony (ADR) Stock Woes: PS4 Release May Not Save Struggling Tech Giant
Sony announced the release of the next generation of its popular PlayStation gaming console in New York City on Wednesday, an announcement coming at the same time the company's stock was recovering from its lowest stock price in 32 years.
PlayStation 4 has the hopes of all of Sony behind it as it fights for its life. Sony's failure to adopt software over hardware over the last decade has helped to compound declining TV sales, which combined have sent the company's stock plunging since 2008.
The explosion of innovation in digital technology necessitated that Sony shift its focus on what it does best. Kazuo Hirai, the current president and CEO who ascended to the helm of the company through the PlayStation division, describes the PS4, mobile gaming, and digital imaging as the three targets pursued by the company to help itself rebuild after its falling-behind to Apple and Samsung in portable music devices and televisions respectively.
The announcement of the product so far has not helped the company as the stock was still down at the close of trading on Wednesday. A lot of information was given on what the new PS4 will have, however the announcement left out key details including the price, what the new console looks like (they only showed images of the new controller), what type of media the games will be in (digital or physical), and any actual footage of gameplay to analyze how the new system works.
New product announcements typically give companies a boost, but Sony's declining stock price after the announcement is an indicator that the markets are still skeptical that Sony's newest PS has what it takes to help the company regain momentum. The purpose of the announcement seemed lost on the press but this confusion-related curiosity might be Sony's winning strategy.
Sony's best hope is that the hype around the PS4 builds between now and the launch date while it focuses on those other two areas of mobile gaming and digital imaging to help it regain its former glory. Especially with the rumored Apple TV on its way, Sony needs to reinforce its entertainment value proposition to consumers, as it once did with the PS2 which still remains the best-selling home video game console of all time to date.