The PlayStation 3 Coming In
EDITOR’S VIEW: The PlayStation 3 Rebirth
It has endured a horrible introduction to the world, but PlayStation 3 has survived. Now it’s set to prosper. Next-Gen’s editor-in-chief Colin Campbell explains…
The thing about brands? They’re all about reputation. And PlayStation’s reputation has taken a beating.
We need not go into detail here, but it’s sufficient to make the point that Sony’s dominance is over forever and its survival in the game industry at all has seemed, at times, less than certain.
Many brands would not have lived through the ignominious introduction of PlayStation 3.
But the PlayStation brand and the Sony brand have survived. They have clung on. They are still here. And now they are going to come back into play. The battle against Xbox 360 (let’s leave Wii aside for now) is not over. In fact, it’s only just beginning. And PlayStation will be the ultimate winner, although what that actually means is something I reckon is worth analyzing in its own right.
Here’s why PlayStation 3’s fortunes are turning.
PlayStation has, rightly, been losing because its software line-up is not as compelling as Xbox 360.
If you look at the best games of the last year, Xbox 360 had a better year of it than PlayStation 3. Next-Gen placed four platform-exclusives from both consoles in our end-of-year top 30, but the Xbox 360 games’ average position was 10th while the PS3’s was 19th. The former had two games in the top ten; the latter had none.
However, a look at the big games for 2008 offers some promise for PS3. Apart from Metal Gear, Tekken 6, GT5 and the Final Fantasies we have two good FPS games in Killzone 2 and Resistance 2 and, perhaps most crucially, two delightful mainstream offerings in SingStar and Little Big Planet. Xbox 360 has a good line-up too, but it’s no better and, you could argue, a bit less thrilling, than its blue-chip 2007 offerings.
Microsoft has been fighting its console battle according to the tried and trusted rules of an age when consoles were largely sold based on their merits, chief among which was their games library. And it’s done very well. But PlayStation’s software offering is in the ascendancy and, anyway (here comes a heresy) sometimes it really isn’t about the software. “What?” – you splutter with incandescent bellicosity. “Not about the software? You sir, are a buffoon and a scoundrel.” Wait. Hear me out.
BLU-RAY
This is the real nub of the hardware war. It always was. For Sony, it has proven a dreadful disadvantage these past two years. It will prove the company’s most fearsome weapon in 2009 and onwards, and it will begin to make a difference in 2008.
The decision to go with Blu-ray as PS3’s drive was simultaneously a bad decision and a good one. It was bad because it hiked the price of the hardware. It was bad because it caused technology challenges and delays. It was bad because no consumers – none – were asking for it. It was bad because it looked like the company was trying to use its leverage in the game business to further its bigger picture ends.
It was good because Blu-ray is going to emerge as the winning platform in the war against HD-DVD. It was good because millions of people will be upgrading to hi-def over the next five years. It was good because a significant percentage of them will make PS3 a central part of that upgrade process.
For Jack Tretton and his pals at Sony, 2008 has begun with the sun shining and the birds singing – Las Vegas style. At CES Warner quit HD-DVD; the HD-DVD booth was way quieter than the neighboring Blu-ray booth. The consumer electronics zeitgeist declared the war over and Blu-ray the victor.
It’s not the end of the war, but it is the beginning of the end, and Blu-ray is the one going forwards. The end of this foolish war will usher in a period of growth triggered by consumers relieved that they can make a purchase and not get screwed by this dim-witted squabble.
Consumers are replacing their TV sets with high-def flat-screens. They will also replace their DVD players with Blu-ray players. They will seek the machine that is noted for its quality; the one that is future-proof; the one with the trust-worthy brand name; the one that, wow, also plays games. They will invest in PlayStation.
So is it all over for Xbox 360? No, the sales numbers are still in that platform’s favor. But sales numbers change quickly. I’m going to predict that, at some point in 2008, Xbox 360 will enjoy its last ever month outselling PlayStation 3. It will be Blu-ray, not Metal Gear Solid, that makes this happen.
PRICE
Up until this point, Xbox 360 has represented the best value. No longer. PS3 is $50 more expensive than Xbox 360 but you get a bigger hard drive, you get a Blu-ray drive and you get to play online for free. It is becoming extremely difficult to argue the case that Xbox 360 is better value than PS3.
In fact, Microsoft is the one most under pressure to cut price. Its paid-for system on Xbox Live looks wholly unsustainable and its lack of a Blu-ray drive is not compensated by that $50 differential (we don’t count the Arcade Pack – does anyone?).
It may be that Microsoft will cut its price to sustain its lead, but two can play at that game (PlayStation 3’s manufacturing costs are dropping substantially) and, anyway, market-share is not as valuable as it once was, certainly not valuable enough to persuade Microsoft to take a big loss on its hardware so far into the console’s life.
BRAND
PlayStation 3, as a model, looks, to me like a pregnant platypus. But some people see beauty in its lines. (I think all the hardware boxes this generation are pug-ugly, but that’s a different point.)
For many people, it looks like a tres-moderne piece of under-the-telly technology. And, what‘s more, it carries the Sony logo and the PlayStation logo. For those of us entrenched in the biz, both these brands carry baggage. But for them out there – the Year 3 Console Adopters, the people who bought a DVD player after the Millennium – these are brands to trust. They speak of sophistication and quality.
I don’t even posit this as an argument against Microsoft or Nintendo, simply as a point about Sony and its relationship with consumers. Sony still means something to billions of people, and so does PlayStation.
HOME
Will PlayStation Home make a difference? When I saw it a year ago, I was convinced that this piece of software would play a major role in the console wars. I still believe it has a touch of genius, the common touch, to take virtual living out of the machismo ghettoes of Xbox Live or the vacant loonyness of Second Life. If it works, it’s an amazing thing.
So, for the first time, Sony is holding some decent cards, even if its chip-stack has been eroded these past few years. It should go on to rack up a hardware base that rivals and then overtakes Xbox 360.
All the above looks like some sort of prediction that PlayStation 3 is going to “win” the hardware wars. It really isn’t, because winning doesn’t mean what it used to mean.
This hardware cycle has confounded most of what we thought we knew about the console games market. We used to believe that there would always be an ultra-dominant console and a distant second-place. We used to believe that third place was no-where. It was once a central belief that games consoles ought not try and be something else; that convergent devices were anathema.
Those things don’t seem to hold any longer. All three console manufacturers are in a strong position to take a win from this generation; simultaneously.
There was a time when “winning” meant creating a big enough share that third parties would work exclusively with the publisher, thereby guaranteeing the growth of that share. Those days are gone. That fight is no longer relevant. Third-parties no longer see value in exclusives. Hell; there’s almost an argument for first-parties to tickle their rivals with certain game releases.
Now, each company must win or lose according to its own criteria.
Nintendo will sell more hardware units than anyone else, and it’ll make a heap of money. In pure numbers on the ground terms, Wii may well win.
But this isn’t a big win for the game industry as a whole, because Nintendo takes such a huge percentage of the software market. Even with today’s massive installed base, we don’t believe Nintendo’s third-party partners can sell much more than 500,000 units of any game in first three months on sale (in either North America or Europe), whereas Nintendo games can and do sell millions.
Microsoft has broken into the games console club and, crucially, created itself a solid reputation as an entertainment brand. It has a larger installed base than PS3 and will continue to enjoy that lead for many, many months to come. Xbox 360 is also going to be a player – albeit not the dominant one – in the emerging entertainment download hub revolution. Crazily, Microsoft might actually make some money from its console adventure. That’s got to be a win even if it sells fewer consoles than its rivals.
PlayStation 3 won’t repeat the successes of the previous two cycles. It won’t dominate the market with solid gold exclusives. It may well spend a significant proportion of this cycle as the console with the smallest installed base. But it will succeed in aiding Blu-ray’s march onwards. That, arguably, is the most crucial factor in its play. As a corporate goal, it diminishes any rivalry with Microsoft to almost zero.
PS3 will one day be seen as a great product – certainly getting a 40% share this generation is a much more challenging proposition than an 80% share in the 1990s (against weak-assed Sega and stubbornly cartridge-a-phile Nintendo, for Chrissakes).
PlayStation 3 is set for greatly improved fortunes in 2008. Blu-ray is the factor that is tipping the balance. For Sony, there remains the enormous challenge of making sure those Blu-ray / PS3 owners engage in PlayStation 3 as more than just a fancy hi-def movie player.
By Colin Campbell (next-gen)
Reference: The PlayStation 3 (officially marketed PLAYSTATION 3, commonly abbreviated PS3) is the third home video game console produced by Sony Computer Entertainment and successor to the PlayStation 2 as part of the PlayStation series. The PlayStation 3 competes with Microsoft’s Xbox 360 and Nintendo’s Wii as part of the seventh generation of video game systems.
A major feature that distinguishes the PlayStation 3 from its predecessors is its unified online gaming service, the PlayStation Network, which contrasts with Sony’s former policy of relying on games’ developers for online play. Other major features of the console include its robust multimedia capabilities, connectivity with the PlayStation Portable, and its use of a next-gen optical format, Blu-ray Disc, as its primary storage medium.
The PlayStation 3 was first released on November 11, 2006, in Japan, November 17, 2006 in North America, and March 23, 2007 in Europe and Oceania, with two stock keeping units (SKUs): a basic version with a 20 GB hard disk drive (HDD), and a premium version with a 60 GB HDD and several additional features. (The 20 GB version was not released in Europe or Oceania.) Since then, the console has had several revisions made to its available SKUs and has faced stiff competition from the other seventh generation consoles. As of December 2007, the PS3 is in third place in sales for its generation.
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