How Does Sony Stay in Business?

The only explanation for the fact that Sony hasn't gone broke a dozen times already is it must be one of the great engineering companies in the world. I say this only because the company seems to shoot itself in the foot constantly with bonehead moves, incredibly poor marketing, and classic missed opportunities.

This for me began in the early days of the Sony VAIO. When VAIO first appeared in the 1990s, I went to Sony's booth at CES to ask why it didn't bother showing the machines to the computer trade press. It left us completely out of the loop.

Back then, the computer press was pretty much dominating and directing the scene. Sony's boxes looked pretty nifty, so I was curious. "Oh, we aren't marketing the VAIO to people interested in computers," I was told. "There's no need to talk to you guys."

I thought this was incredibly peculiar, since the company had just come off a decade of dominance in the computer users' milieu with its superb PC monitors. Sony already had the reputation and brand name everyone in the industry liked, yet it wasn't going to leverage any of it on some whim. I thought it was idiotic.

Within a few years, Sony ended up with a struggling laptop business and faded from the monitor market. The company, by staying away from the computer geek milieu, also missed out on trends it could have easily benefited from, including the mp3 iPod revolution, which it managed to completely ignore.

Instead, the company moved into game console market, which was outside the scene. Again, through incredible engineering, it took its place at the top and managed to build a huge business with the PlayStation.

I could go on and on with the missteps, but the ones that keep cropping up for the PlayStation are arguably the funniest and the most indicative of the company's weird arrogance and the fact that it lives in a bubble. Within a year or two of the PlayStation achieving dominance, a small company came out with an incredible emulator that let a regular PC run the games. Sony sued the company out of business. I was stunned by this, since I would have bought the company for less money than the lawsuit cost and started a new PC gaming business. Controlling the emulator would have given Sony all sorts of leverage, but nobody at the company seems to have the ability to think this way. It also should be noted that game sales account for profits not the sales of the consoles. So, how would the emulator hurt anything?

Okay, now we come to chapter two of this history of suing, which happened last week. Bob Pegoraro described the situation on his Faster Forward blog in the Washington Post:

"A California court has approved Sony's restraining order against George Hotz, who distributed a way to allow Playstation 3 [sic] users to put any operating system on their consoles -- an action that Sony claims opened the door to game piracy. PSX-Scene, a Playstation [sic] community, had the pdf files of the documents first.

Hotz has been ordered to take down all links to the hack and turn over his computers. He maintains that he never intended the hack to aid game piracy and, in fact, told the G4 network show "Attack of the Show" that he took measures to keep the code from being used in that manner."

So let me get this straight: Instead of hiring this guy to work for Sony, it sues him? Engineers like this guy are rare. Is the company that dumb? Or does it not hire outside its little cult? To me, it's an eye-roller. As Pegoraro points out, the hack is all over the net on mirror sites, so who are they kidding?

Yet again, a golden opportunity turns into a heap of dirt as Hotz will probably end up working for Microsoft.

How does this company stay in business? It's baffling.