Deconstructing Sony (warning: long)

[ChrisClement]

Ever heard of the phrase "jack of all trades, master of none"? Where you do a little bit of everything, but can't do one thing really well? I give you Sony Corporation and the home movie and gaming industries. It is hard to blame Sony for trying to use their success in the gaming industry to breathe new life into their DVD sales which is being plagued by staggering demand and falling prices (thanks to a flood of used DVD sales) . Just look back to the huge success of the PS2. Why wouldn't the execs at Sony try to duplicate the dynamic duo of gaming and DVD playback of the PS2 with the PSP and the PS3. One would think that the heroic brain trusts at Sony came to the call when Joe Consumer called out "Give us Blu-ray and UMD!" But that's not what happened. To say that the proprietary UMD format and the high definition DVD Blu-ray are contrived markets would be an understatement. To the consumer, the rise of the DVD made sense. So did HDTV. But HD DVD? Why? The leap in quality from VHS to DVD and regular TV to HDTV were huge. But put DVD next to Blu-ray or HD-DVD and the difference isn't nearly as compelling. Consumers were more than ready to dump their VHS tapes in favor of DVDs because of the ease and vastly superior quality. There has been no such rush for the average consumer to adopt high definition DVD. This and the fact that the market is still trying to invent itself with the HD-DVD/Blu-ray war and you get a big yawn from Joe Consumer. Sony executives are evidently of the opinion that Joe Consumer can easily be manipulated into adopting whatever newfangled product they shove down the pipe. Rather than allowing the market to form on its own, Sony is trying to push and prod Joe into buying their new formats whether the consumer wants them or not. The PSP UMD movie format was an absolute failure and yet Sony somehow felt the Blu-ray movement would be much different which is why they are forcing every consumer that wants a PS3 to buy a blu-ray movie player at the same time. But will the fact that Sony is trying to invent a market that does not yet exist be their failure? Microsoft thinks so. They offer a HD-DVD player separately from the XBOX 360 and for good reason: those that want it will buy it, those that don't, won't. But Microsoft isn't tied to the movie biz like Sony is and so their interest in seeing HD-DVD succeed is not nearly as high as seeing the Blu-ray fail. Imagine the consumer is stuck in an elaborate maze of Sony's design and can only get the cheese if we follow the complex path Sony has laid out. Want a PS3....you get a blu-ray too....and how about some blu-ray movies....and a nice Sony HD television as well. Except, of course, that in this case, the consumer does have the choice to not enter into the maze at all. It is a new market that Sony is trying to invent, one that is predetermined by product manipulation. And we see even more manipulation with the PSP. Months ago we heard of the ability to download old PS1 games to play on the PSP would be coming. That was all fabulatastic, except for the fact that Sony pulled a "gotcha" in the end and decided the PSP could download PS1 ONLY through a PS3. This, despite the fact that there is no technological reason for that requirement. Like their attempt to merge gaming with their blu-ray movie format, Sony decided to force consumers to buy two products when they only needed one. Is this too just part of the big Sony maze? Consider this: Sony's actions with their gaming products have been tied in one way or another to their home movie interests. That begs the question: would the PS3 requirement for PS1 downloads to the PSP have been created if the UMD movie format had been a success? In the end, Sony may find that one of their more successful products, the PSP, may have been severely hindered by their high level of product dependency. Or maybe the PSP's sudden lack of appeal in selling movies has cast the PSP/PS1 download ability upon Sony's sacrificial alter? Either way, a great feature for a promising handheld may have been squandered in the process. By trying to dominate both the home movie and gaming markets, Sony has, in effect, manipulated itself OUT of the position of dominance that it once had in the gaming industry. Sony is losing money on every PS3 and demand is not what was expected. In a year, maybe two, the next-gen market will be fully fleshed out, but the movie format war will still be raging unless some dramatic truce between the two camps is achieved. The fact that Sony is gambling in both with the same set of dice may be the undoing of an incredible era in gaming. If I'm sitting in the Microsoft or Nintendo camp, I have to like the odds.