Sony's New Marketing Strategy May Mean Doom for PS3

[Damion Chaplin]

<div class='os_post_top_link'><a href='http://www.gamasutra.com/php-bin/news_index.php?story=10122' target='_blank'>http://www.gamasutra.com/php-bin/news_index.php?story=10122</a><br /><br /></div><i>"...two things are clear: 1) the high price of the PlayStation 3 is going to slow overall industry growth, especially for software and 2) if Sony does not change its current strategy for the PS3 the system will probably end up in third place in installed base. Microsoft and Nintendo have been handed that golden opportunity and both companies have a chance to make their systems the market leader. However, it looks like under any scenario the video game market is going to be severely fragmented, with several incompatible platforms having strong market share and even the possibility of a platform doing well in one region and struggling in another. As we have mentioned in past briefs, the big concern with Sony is not only the PlayStation 3 launch price, but the signs that Sony has gotten itself into a business model that is not conducive to the mass market video game audience. There has been a lot of talk about positioning the PS3 as not just a video game system, or even entertainment system, but instead as a computer system."</i><br /><br />Sony is positioning the PS3 as a computer, not as a gaming system, according to Sony Chief Ken Kutaragi. Their new marketing strategy eschews the traditional gaming console method of releasing a new system every 2-3 years. Instead, they're hoping for a more modular approach, which they hope will allow the PS3 to remain current while MS and Nintendo struggle to put out their next-next-gen consoles, around 2008. In the meantime though, MS and Nintendo have an opportunity to snatch the user base right out from under Sony, especially if MS's Argo project is successful. This holiday season will be telling, and will probably determine the short-term winner of this gaming console war. We'll just have to wait to see if Sony's more long-term approach will pay off or kill the PS3 before it can even leave the ground.

[Felix Torres]

Funny thought: the PS3, as currently priced, may be uncompetitive as a console but it might be a breakthrough Media Center product.

Think about it: MS has given the 360 excellent Media Center features, and we know the hardware can handle anything you'd need in a Media Center, but MS limits the fuctionality to protect their MCE PC product line. As a result, you can only play videi in extender mode and the built-in Media Player, while it has a very good interface and good features, is only a shadow of what MS could deliver if they chose to.

PS3, on the other hand, has a bigger HD to hold content, the PSP as a content client, and Sony's raging case of Apple-envy to drive functionality. ;-)

I could see Sony offering low-res movies and TV shows for the PSP via the PS3 along with music through a walled-garden games-and-media service akin to XBOX Lve.

Of course, Sony would not likely offer HD video content via d/l since it would conflict with the BD-ROM that is the heart and soul of their strategy, but it would still offer a pretty good alternative to an MCE PC if Sony knew how to execute.

Which is, of course, the real problem: right now Sony is incpable of executing.
Indeed, judging by Kutaragi's track record (PS2, PSX, PSP) there is practically no way Sony gets this kind of functionality in place this decade.

What I don't understand is why Sony doesn't just go and buy Apple altogether; the corporate cultures are clearly compatible (both worship at the altars of NIH, kewl, and premium pricing) and if Sony so desperately wants to be Apple...

Oh, and as for the long-term competitiveness of the PS3?
Sorry Mr Kutaragi, but 2008 is when MS anounces the *Next* XBOX. For shipment in 09.
MS is running on a 4-year cycle, not the 10 year cycle Kutaragi loves.