U.S. News

Sony Game Unit Plans to Cut Jobs in U.S.


Sony's game unit said on Thursday it planned to cut jobs in the United States and was eyeing restructuring steps in Japan as it struggles to keep up with industry rival Nintendo.

Sony Computer Entertainment (SCE) announced plans in April to cut up to 160 jobs in Europe, or 8.4% of its workforce there, and has said it would look at streamlining its operations in the U.S. and Japan.

Sony's game division posted an operating loss of 232 billion yen ($1.91 billion) in the year ended March 31 due to hefty start-up costs for the PlayStation 3, a new high-tech game console that has been losing out to Nintendo's wildly popular Wii.

A spokeswoman at SCE said the job cuts in the U.S. would be part of a larger effort to cut costs there. The timing and the size of the cuts have not yet been decided, she said.

SCE is also looking at ways to make its Japan operations more efficient, though no concrete plans have been drawn up.

"We are taking another look at the company as whole," the spokeswoman said.

Sony ruled the $30 billion global game industry over the past decade with the original PlayStation and PlayStation 2, but demand for the PS3 has been slow so far due to its high price tag and limited availability of attractive software titles.

Launched late last year, the PS3 sold just 45,321 units in May in Japan, compared with 251,794 units of the Wii. In April, the ratio was four to one in favor of the Wii, according to Japanese game magazine publisher Enterbrain.

Nintendo, known for such game characters as Mario, Donkey Kong and Pokemon, also launched its latest console last year. The Wii features a motion-sensitive controller that allows users to direct on-screen play by swinging it like a tennis racket or wielding it like a sword, opening a new avenue of game playing.

In the United States, the Wii was the top-selling new console for the fourth month in a row in April, with Nintendo selling 360,000 units, while Sony sold 82,000 units of the PS3 and Microsoft sold 174,000 Xbox 360 machines.