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Sony's US video-game unit cuts jobs

business Updated: Jun 07, 2007 09:52 IST
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Sony's US video-game unit is cutting jobs to become more competitive, the company said on Thursday, as the PlayStation 3 machine struggles against rival offerings from Microsoft and Nintendo.

Numbers and other details aren't being disclosed about the employee reductions at Sony Computer Entertainment Inc in the US, which began on Wednesday, said spokeswoman Sayoka Henmi in Tokyo. The job cuts in the US follow those in Europe in April, but none are planned for Japan, she said.

"The goal is to reform the organization," she said. Sony Corp officials have said that changes are in order to adjust to the needs of the industry, as people increasingly use their machines for linking to the Internet, watching video, listening to music or looking at photos, not just playing games. The PlayStation 3, which competes against Microsoft Corp's Xbox 360 and Nintendo Co's Wii, went on sale in November Japan and the US, and in March in Europe.

Tokyo-based Sony shipped 5.5 million PS3 machines in the fiscal year through March 31, fewer than the 6 million the company had targeted.

Nintendo, the Kyoto-based maker of Super Mario and Pokemon games and Game Boy Advance machines, shipped 5.84 million Wii consoles worldwide during the same period. The Wii, which went on sale late last year worldwide, has done very well, winning over the elderly and other newcomers to games with a wandlike remote-control that can be used for fishing, tennis and other easy-to-play games. Sony isn't expecting to post a profit in its game business until the fiscal year ending March 2009.

US software company Microsoft is expecting to have sold 12 million Xbox 360 consoles by June. The machine went on sale in 2005. In recent years, Sony has been restructuring and playing catchup to improve profit in its core electronics division. But the hefty startup costs for the PS3 are weighing heavily on its revival efforts.