The Lessons of the PS3

The PS3 is a full blown disaster for Sony on several levels. First and foremost, I can’t figure out why the hell I would want to shell out $600 for a game console that basically does what the Xbox360 does for a lot less – play great games. It has a Blu Ray DVD player, whoop de frickin doo… that isn’t making my game experience any better and in a year Blu Ray and HD-DVD players are going to be a couple hundred bucks so why rush in now?

Speaking of Blu Ray, the failure of the PS3 hit the mark has implications for Sony’s fight with Toshiba and their HD-DVD standard. Sony was really counting on a market seeding effect generated by PS3 sales to push them over the tipping point and establish Blu Ray as the default HD standard for DVD. Clearly they have to be rethinking that strategy at this point.

Sony is an interesting case study in the declining half-life of “it” companies, which Sony clearly was for most of the late 1980’s and 1990’s but today they are more known for rootkits, exploding batteries, and stunning inability to come up with anything that can effectively compete with Apple’s iPod and ITMS despite having created the portable music category with the brand equivalent of kleenex – the walkman.

Here’s my casual observation on what they did wrong:

1) Underestimated how competitive Microsoft is and by giving them a full year head start they pretty much exposed the arrogance of their corporate DNA which believed that they made the market on their time.

2) Failed to promote a healthy ecosystem. The game console doesn’t mean jack without great games and Sony should have been working overtime to spread the love among their game developers. What they did was simply expect their developer community to step up because, after all, it’s the Sony Playstation.

3) Gamers are moving online and Sony’s online efforts really don’t live up to what the competition has. Also, Sony Connect is an embarrassment.

4) Sony still thinks their market is hardcore gamers and teenage boys when in fact the demographics consistently point to a older and increasingly female market. Market to the mass market like Nintendo is doing.

5) The Nintendo Wii outsold the PS3 with an innovative controller and a very slick marketing campaign that featured games everyone could like. It’s that ecosystem thing again.

6) Where’s the tie-in with the PSP? I have a PSP and really dig it even though the games are spotty and Sony wants to lock you in by turning off all the hacked features as soon as they become available. That’s a whole other blog post that I’ve written a couple of times already.

7) The fact that I’d spend $500 on an Apple iPhone that hasn’t even launched yet before I’d shell out basically the same $$ on a full blown bad-ass game console pretty much sums up how badly Sony has stumbled on this very important product.

GigaGamez » Archive Can the PS3 Be Saved? «:

The PS3 hasn’t performed as well as expected. In fact, since E3 last year, not much has actually gone Sony’s way. There was the removal of features, loss of exclusives, extreme price and severe supply constraint… and that’s just leading up to the launch. Once November 17th rolled around, there were people camping outside of Best Buy to get PS3s so that they could scalp them on eBay for extreme prices, and that worked for a while. Then buyers got sick of paying for a system with one semi-desirable game, a blu-ray player with questionable usefulness and a really bad PS2 emulator.

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11 thoughts on The Lessons of the PS3

  1. Titles make or break a console. Good titles drive user adoption. A lack of good titles can kill a console pretty quick.

    Back when the PS2 was released, I was working for a game developer with a PS2 launch title. At the time, the PS2 was an amazing machine, but it was a total nightmare to program. The tools were hard to use — I seem to remember serious discussion about writing our own compiler… And then the dev stations (special versions of the PS2 just for developers) were incredibly expensive and scarce. The whole product release had to go through Sony’s approval and manufacturing process, which was slow and tedious.

    But back then there was nothing else that was even close to as cool as the PS2. The pain was worth the effort. We knew that as a launch title we would see great sales and that the PS2 hardware, when beaten into submission, would deliver a cool game.

    Fast forward to the PS3 era… From what I hear, the PS3 is a technical marvel with it’s 7 parallel processors, but optimizing your code to run well is a nightmare. i.e. nothing learned from PS2.

    And now there’s Xbox360 in the mix. The dev environment for the original Xbox was a dream compared to the PS2 tools, the only thing that slowed adoption within the developer community was the uncertainty as to whether the console would sell. Clearly it did, and now Xbox 360 has been flying off the shelves.

    So you have a relatively easy to program console with plenty of power and broad user adoption versus a painful development cycle for a console with smaller market share. And that’s a no brainer for most developers.

  2. yeah, that was the point of my #2. It’s no secret that the PS2 was a PITA to develop for and that Xbox360 has been a hit with developers for exactly the opposite reason, therefore Sony had everything to gain by ensuring that their development toolkit rocked. They didn’t and the game catalog is weak as a result meaning I have little reason to part with the dollars to buy a console.

  3. Jeff, great post…it’s astounding how many ways Sony has screwed up a technology lead.

    One of the most startling things about the PS3 is the lack of associated titles. Nearly every game that has any interest to people is literally a port of an existing XBox 360 game. And yet XBox is already in a lot of homes PLUS they have badass games like Gears of War to boot.

    The other HUGE mistake was the Blu-ray thing. I can understand why they went down this path, but it was flawed. So much of the PS2’s success was tied to the inclusion of a solid DVD; particularly in Japan. I remember when the PS2 was ablaze, reading several articles about how Japanese consumers were buying PS2 in many cases as a DVD player for its primary purpose.

    Sony thought they could replicate the two for one again but this time there were two critical (and fatal) differences:

    1. Blu-Ray hasn’t crossed the chasm…DVDs were mainstream when PS2 was rolling out, but Blu-Ray is not only an emerging technology, it’s quite possibly an obsolete one if HDVD wins out (as I think it might).

    2. PS2 were priced so that a buyer almost felt they were getting a DVD player for free. While the PS3 is much cheaper than a standalone Blu Ray plus another next gen game console, it hardly “feels” to consumers like they’re getting a deal since they would otherwise be content to wait on getting a next gen DVD player for another year or two.


  4. I disagree, a few remarks:

    Sales is a bit slow right now but they are still reaching their sales targets (although a bit late) so why should they lower the price or change strategy ?

    PS2 still outsells the next-gen consoles so it’s clearly a price issue for consumers and not a branding issue.

    Including the Blu-Ray drive from the beginning is a must since adding components later has never worked in the past. If PS3 reaches its sales target HD-DVD is dead.

    The Cell architecture may be PITA to develop for, but it is superior and it will show in games developed specifically for it. It can do things that is simply not possible on the other systems.

    Bundling and branding PS3 with Spider-Man 3 will drive sales this summer.

  5. disclaimer: i work for a non-xbox division in msft.

    1) Microsoft went out and got some of the best game developers to develop for xbox360.

    2007 has an insane game lineup:
    Halo 3, Fable 2, Assassin’s creed, some RPGs in Japan from part of the teams that gave us Final Fantasy and Chronotrigger. Atleast 10 other killer games.
    Microsoft was super agressive in buying or collaborating with the best studios like Bungee studios (i think the figure was either 18 or 32 million – not bad for the worth of Halo to Xbox) and getting super star developers/designers like Peter Molyneaux (Fable) to develop for Xbox.

    2) Xbox Live has taken off amazingly well. In addition Vista means that PC users can join Xbox live.

    Xbox live marketplace is already the #2 source for buying online video content.
    Sony doesn’t stand a chance in online.

  6. Allow me offer a different opinion, hopefully without flaming. About me: 38, engineer, longtime game player on the PC, haven’t played a console game in 20+ years, recently bought a PS3.

    Enumerated responses:

    i. Blu-ray whoop-de-doo? Yes, that is a big selling point. It’s two mints in one. Blu-ray has 50gb storage to HDdvd’s 34 (thus the potential for richer game content). Toshiba just came out w/ 3lvl HDdvd to boost cap to 51gb (only 1 more gig/BR, higher media prod costs, higher player complexity (to focus laser on 3 layers and through 2)). With the Xbox360 you can add on a HDdvd player for $150-200, making the costs of the systems the same. THE SAME. Add on wi-fi and the 360 costs more. PS3 has motion feedback from the controller, though not near as good as the Wii. 360? Nada. HDMI on X360? No. 1080p? Nunh-uh.

    ii. Blu-ray and HDdvd players are not going to be $200 in a year. A $600 BR player comes out this summer. There’s a $500 HDdvd player now. $200 players won’t be seen for probably 2 years.

    1. The flipside of that coin is that MS knew that they got clobbered by the PS2 and so rushed to market with the 360. They had a year to develop a base and work out bugs, so of course they have a big lead. PS3 will gain momentum. Sony is selling the system at a loss to hit a price point and gain a base; that is wise.

    2. Healthy ecosystem? Huh? Reverting back to english, consoles always precede games. A console needs a couple good titles at launch and the promise of more. The PS3 has that. Plus, the PS3 plays pretty much all the PS2 games. Doesn’t help me, but means a lot to the teeming throngs who own PS2s. Will they migrate to a 360, where their old games are crap, or to a PS3? Remember before answering that once you get the add-ons for the 360, it costs more than the PS3.

    3. Online – you may be right, I don’t have much info, so won’t comment.

    4. Demographics – yes, the median age of the game player is increasing, e.g. me, what of it? Sony should be marketing Checkers for the PS3? I don’t appreciate a good FPS? More, varied titles will come. More female demographic? I’ll buy that – how much more? From 0.5% to 2%? 3%? The marketing should be oriented to that sliver of the pie? Further, has that 3% come on board because of Extreme Hula-Hoop III? Or has a larger segment of the female population found that they can enjoy RTSs, RPGs, or even FPSs? From the female gamers I’ve seen, it is the latter.

    5. Games everyone likes. Like Extreme Hula-Hoop III. I think these are better characterized as games that everyone’s mother wants them to like. As such, it may be a slick marketing angle. Not to knock the Wii too hard, I think the Wii is a good entry-level system with a very innovative new controller. I like the Wii. If my wife wants to buy a Wii, that’s fine with me. But… 480p? What’s the point? That’s kind of 1996, isn’t it?

    6. I don’t have a PSP, so no comment.

    7. Then you go and lose all credibility by admitting that you suffer from fanboy-itis. Apple is such a religion to its advocates, they really dissuade from further considering what may be a very good system.

    Sony can lose. Sony is currently behind. Sony’s product is markedly better, but does need more PS3 games (in addition to the billion PS2 games). MS will fight. They like to win, and they don’t care how. Sony can also win. They are far from sunk.

  7. While I disagree with a few of your assertions, I really do appreciate you posting a lengthy and thoughtful response.

    I will take a moment to point out that Sony really screwed up the developer community PS2 push, which is the backstory behind my comments about healthy ecosystem. Sony knew that developers were going to hold their feet to the fire on the PS3 developer launch and quite honestly Sony still managed to screw it up.

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