Phil L

Memo To Microsoft and Sony: Game Consoles Are For Playing Games

No Roger, games consoles aren't just for games. Uou've been writing about the PS3 for months, but you still haven't understood Sony's PS3 strategy. You write that Wii is disruptive, and that Sony needs to disrupt the disrupter. But you haven't understood that Sony's strategy IS disruptive, and the basis of that strategy is a focus High Definition and home media. The PS3 is a classic horizontal product play that ties into multiple Sony lines of business: handheld gaming (PSP cross-over), TV (Sony is defining a "True HD" 1080p positioning to re-inforce their position as a premium player in the TV market), movies (Blu-Ray intellectual property, higher margin format, and forthcoming movie downloads via the PlayStation Network), photography (import, view in Full HD, rotate/crop and print from the PS3), home video (import and play full AVCHD movies into the PS3), mobile ("Home" access/sharing from a Sony Ericsson mobile), and of course music. Multiple Sony business units leverage and benefit from the PS3 strategy. When it comes to gaming, Sony defined a high-definition experience, and realized (unlike Microsoft) that higher capacity storage would be required to deliver that experience. The PS3 has a Blu-Ray player not just to support Sony's desire to delivery the successor to DVD, but because Lair requires 25GB, and Killzone 2 requires 3GB for a single level. Further, Sony has done more to broaden the appeal of their game console, by not just on motion sensing controllers (which the PS3 has) but on community ("Home") and user generated content (e.g, LittleBigPlanet, SingStar), as well as puzzle games (e.g., Soduku, Echochrome) and board games (Eye of Judgement). Not only is it trivial to add on Wii-like controllers, since the the PS3 already supports motion sensing and supports Bluetooth as a wireless standard (third parties are already producing controllers) Sony promises even more intuitive/innovating gaming using the Playstation Eye... allowing video control of games. In short, Microsoft has niched themselves with inferior technology and quality for hardcore FPS games. Nintendo has broadened the appeal of gaming, but cannot handle High Definition (and to do so will require an expensive re-design) or handle other forms of media. Sony has produced good quality product and is ruthlessly reducing the cost of production in order to take it to a larger market and has the longest "legs" on it. As you said yourself.... disrupting the disrupter requires taking a longer term view. The PS3 is winning the HD war for Blu-Ray, helping to drive HD revenues in Sony's home entertainment division, providing Sony's studios with a new, higher margin media for movies and online distribution, and building the basis of a larger and longer-term online revenue stream. Sony deserves more credit for what they are achieving with the PS3 than this sort of facile business analysis.