LogIn"They don't necessarily have a deep understanding of how their work is being translated to growth, generation of sustainable profits."
Image credit: Insomniac Games
After Sony released its Q3 2023 report, sharing the latest PlayStation 5 sales figures, the following earnings call offered insight from Sony's bosses.
As you may recall, Jim Ryan, SIE's current President and CEO, will retire in March, and Hiroki Totoki, the Chief Operating Officer (COO), will step in as Chairman of SIE to aid in the transition. Totoki will serve as Interim CEO as the company begins the search for a new Chief Executive Officer.
During the recent discussions with investors, Totoki provided some interim updates on his experience with PlayStation representatives, sharing the things he noticed.
"It's been four months since I became chairman of SIE. A big problem of SIE that I found is they don't necessarily have a deep understanding of how their work is being translated to growth, generation of sustainable profits, and higher margins for the unit as a whole," stated Totoki (via Bloomberg's Takashi Mochizuki)
Totoki also thinks that PlayStation has a lot of hard-working people who are truly dedicated to the company, but they don't know how to grow margins and achieve the best results if we speak of the business aspect.
"I also visit studios and everyone is working really hard to fulfill their responsibility to try to optimize the business, and I understand that. But overall growth and sustainable profitability or increasing margin, how will that translate to these goals? I don't think people understand that deeply. I think that is the problem of the organization," he added.
It seems that the executive suggested that the issues are connected to budget allocation and production scheduling.
Totoki also mentioned that Sony is exploring profit-boosting strategies to be implemented before the annual report in May, and the plan is "to go aggressive in improving the margin performance". While some speculate that this might involve layoffs, company management hasn't confirmed any specifics.
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