A look at what Sony wants, and what it has
In a time when both Hollywood and the gaming industry are just about the only two economic bright spots out there, Sony—a company with a giant foot in both worlds—has turned in some of the worst numbers in its history. But when asked to explain its lagging game sales, Sony has one answer that it can always fall back on: the PS3, you see, isn't a system that is focusing on the now. There may be a trend towards the Wii for a little while, and the 360 may be leading in sales at the moment, but the PS3 is a ten-year system. In other words, the system is yet in its infancy... but what does Sony mean by that?
Let's look at some past quotes to see this argument in action. "We didn't get into PS3 for the first six months of 2007—we're into this for the next 10 years and beyond," Jack Tretton told the LA Times in 2007. "A million units one way or another at this point isn't going to worry us.... The PS3 is ahead of the market, while the Xbox 360 and the Wii were designed for immediate market impact," he continued. The sales didn't need to come in 2007, Sony would pull ahead in 2008, and besides, the PS3 has ten years! Everything else will be dust in five or so, right?
The real ten-year machine: the PS2
The PlayStation 2 was released in North America in 2000, meaning that we're a little over eight years into that console's life. By every metric, the PS2 has been a huge success, making headlines when its sales passed 50 million units over its lifetime in North America alone. This is what a ten-year product looks like: a massive early success, a growing value proposition as prices came down with age, and the whole enterprise buoyed by amazing first- and third-party support.
The PlayStation 2 was also at the right place at the right time. Sony had hyped the system so well, and was coming off great success with the PSone, that it was able to crush Sega like a grape. In spite of its technical prowess and devoted fan base, the Dreamcast didn't last long against the full might of Sony.
And Nintendo, for its part, had a cartridge-based system that was expensive to release games for; indeed, those cartridges were just as expensive for consumers. The criticisms that Nintendo aimed for a younger audience and largely found success with its own games aren't new ones; the N64 made money for Nintendo, no doubt, but few were invited to the party. The GameCube, which followed the N64 and found niche success, was in the same mold. When it came to more adult, disc-based games, Sony had the ring all to itself.
Everyone at Sony seemed to know how good they had it, and they grew the installed base by leaps and bounds, creating wonderful games and peripherals for the system. Many of today's gamers can look back on as many warm memories and life-defining moments playing the PS2 as the previous gaming generation could with the SNES. But Sony grew arrogant during this time, and thought that it could out-hype the 360 the same way it did the Dreamcast. This was, to put it lightly, an insane miscalculation. Microsoft is not Sega, and it had the will and the bank account to stay in the red as long as it takes to get profitable. Sony had never gone against a well-entrenched and successful competitor with as great a fighting spirit as Microsoft showed, and they're still dealing with the new marketplace.
The second challenge facing Sony was that the Nintendo Wii isn't the Nintendo 64, and it sure as hell isn't the GameCube. The addition of a waggle-based controller may have invited early jokes, but Nintendo is dominating the industry, and its wave has not broken yet. Sony can claim that it's not in the same market as the Wii until it's blue in the face, but no one can escape the fact that in this economy every dollar given to a competitor's consumer electronics product is a dollar that you're not getting. Just because Nintendo proved that a larger market doesn't care about high definition doesn't mean you can dismiss the effect those sales are having on your business.
While the Nintendo Wii may have a wider demographic than the other two systems, it is still competing with its more powerful friends on retail shelves. Take my friends Scott and Courtney, who are usually my case study when it comes to casual gaming. They're in their late twenties, they have a baby, and they just bought their first HDTV. They have a Wii hooked up to it, and Scott wants to get a 360 or a PS3 so he can enjoy some console online play and perhaps watch a Blu-ray or two. For Christmas, he bought his wife a Nintendo DS, which she plays in the evenings. She likes New Super Mario Bros. Now, while neither Microsoft or Sony will ever say that their home consoles are competing with the Nintendo DS, like every family, Scott and Courtney keep a budget for their entertainment expenses, and that DS means no 360 or PS3 in the near future. It's a competition, and everyone is fighting each other. The Nintendo Wii is hurting the PS3, no matter how much the talking heads want you to forget it.
So while the PS2 is still going strong on a ten-year timeframe, that success is the result of a very favorable set of conditions for Sony, and those conditions don't obtain for the PS3. The Wii and the 360 are formidable opponents backed by deep pockets, and Sony didn't have a fight this hard with either the PSone or PS2.
Old but not alone
Being old doesn't mean you're alone when you're a console. Far from it
So the PS2 is a true ten-year system, but for the end of those years it will be living with its older brother. And that's the bothersome thing that Sony doesn't really talk about: being in the market for ten years doesn't mean that the company won't release a new console when the Xbox 720 or whatever is released; it simply means that the PS3 will be on store shelves in ten years. Kaz Hirai had some strong words with the Official PlayStation Magazine recently."And with the Xbox—again, I can't come up with one word to fit. You need a word that describes something that lacks longevity," he said. "Last time I checked, they've never had a console that's been on the market for more than four or five years and we've committed to a ten year life cycle, so you do the math..."
Keep in mind it was also said that backwards compatibility was important to the PlayStation line of products, and that rumble was a last-generation feature. If it's in Sony's best interests to dump the PS3, the company will do so without a moment's hesitation, and to hell with whatever they've said in the past.
Sony has done plenty of innovating, but it didn't need the expensive Blu-ray drive or Cell to do it
What we do know is that at least in the US market, the Xbox 360 sales don't show many signs of slowing, even in the face of the PR disaster that the Red Ring of Death brought Microsoft. The prices are coming down much quicker than Sony can afford to follow, meaning that Microsoft is already leveraging its software support and aging technology into a low-cost system to try to maintain long-term appeal. Sony simply doesn't have the sales yet to do that, and so far there has been little evidence that those sales are coming. So the talking point of the ten year system is just that, a talking point.
So what of Sony's two claimed advantages over the 360: a more advanced processor design, and Blu-ray support? Regarding the first, Sony has only recently begun to offer parity in terms of graphics to the 360, and it seems unlikely that the increases in graphics we've seen with the PS3 will continue on the same curve. Of course, anything is possible in theory, and enterprising developers managed work new wonders with the Playstation 2 hardware even as the PS3 was preparing for launch. The real question, though, is whether the "graphics gap" that Sony is banking on at some point in the future will be able to make up for damage to sales and title support that the price gap is doing to the platform right now.
As for Blu-ray, color us unconvinced that in a world of broadband and networked consoles, Microsoft's DVD game format will prove to be its undoing. Still, Sony has kept pushing the idea Blu-ray is a necessity for games. Sony's Phil Harrison talked up Blu-ray for gaming in 2006, saying that early titles were already filling up the discs. "It's not just about graphics," he said. "It's about 7.1 audio, it's about speech, it's about having up to 1080p movies built into the game; it's high-res textures, it's animation, it's everything that goes into making a very rich and varied next-gen experience. Partly it's visual, partly it's sound, and partially it'll be down to gameplay benefits as well - more levels, more detail, richer experiences."
Some devs do indeed moan about squeezing their games onto the Xbox 360's smaller media format, but this issue is less apparent to everyday gamers. I can name you plenty of PS3 games with a ton of levels and good experiences, but I can do the same thing on the 360. Blu-ray doesn't enter into it for most gamers.
Everyone has a ten year plan, and we shouldn't forget it
We realize that talking about consoles in a story such as this is a precarious thing; no matter what you do, you're apt to attract mobs of readers with pitchforks and torches. But it's important to look at the heart of the ten year argument and realize that it's mostly smoke and mirrors. Every company that creates a consumer electronics product as expensive as a gaming console has at least a ten year plan, and Microsoft knows that the majority of their sales are going to happen once the system gets to the sub-$150 price point; they're also in the best position to get there quickly.
As for the Nintendo Wii... well, it's nearly impossible to speculate on that. Nintendo has been re-writing the rules of when and how you create a gaming console almost as long as they've been in the business, and the Wii is clearly setting the pace. It's impossible to guess if consumers will still be interested in the Wii when its successor is realized, and if anyone is willing to guess about what that successor is going to look like, they have a better crystal ball than I do.
We also can't discount the possibility that Sony gets out of the gaming business altogether. This possibility is unlikely, but if Sony can move the Cell processor into more devices and Blu-ray becomes as popular as DVD, the company could at least make its R&D money back. As for the ten-year plan? They had better start selling more systems, and find a way to drop that price if they hope to tap into the casual and lower-cost market that the PS2 has served so well in the twilight of its life.
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I think it's a good article to put everything in perspective especially the example used to show that even a DS purchase would impact the console sales.
MikeB predicts that the PS3 will sell about 140 million units by the end of 2016 and triple the amount of 360s in the long run.
