Why is Sony Losing the Videogame Wars?

A recent Yahoo article indicates that in the current generation of console videogame systems, Nintendo is dominating the industry while Microsoft's Xbox 360 is a comfortable second and Sony's PS3 is a distant third. So what has Sony done wrong?

PLAYSTATION 3 WAS A YEAR LATER TO MARKET THAN XBOX 360

Sony's biggest stumble was not having the PS3 ready until November of 2006, a year later than the Xbox 360. Although the Nintendo Wii was also late to the game, the console was not competing for the same market, hardcore gamers who are early adopters of advanced technology. Gamers who craved the newest experience in gaming flocked to the Xbox 360 a full year before Sony even had a console on the market.

PRICE

At $599 for a 60 GB model and $499 for a 20 GB model with less features, the PS3 cost some serious coin. At the time of launch for the Xbox 360, its top of the line model was only $399, and the lesser model was $299. Microsoft then made pricing cuts to the Xbox 360 prior to the release of the Playstation 3. Even now, at $399 for a 80 GB model and $499 for a 160 GB model, the PS3 is far less attractively priced than its competition, especially when an Xbox 360 can be had for $199 for its base model. Sony might argue that their console is much more expensive to produce, but given the cost to Microsoft to fix Xbox 360's numerous technical failures, Sony would have to be coming out ahead in hardware costs, even with cutting the price.

REDUCTION OF FEATURE SET IN NEWER MODELS, ESPECIALLY BACKWARD COMPATIBILITY

Sony created the most successful system in the history of gaming with the Playstation 2, selling over 140 million units, and amassing a library of over 1000 games. Sony initially decided to build the PS2 chipset into the PS3, allowing users to play any generation of Playstation game that they owned on the PS3. As Sony revamped their PS3 lineup, they shifted support for the Playstation 2 to software emulation on their higher end consoles and eliminated it from the lower end configurations. Now Sony has eliminated the backward compatibility completely from the two models currently in their lineup. They also eliminated the handy flashcard readers from the front , and two of the four USB ports.

By eliminating the backward compatibility from the PS3, Sony has eliminated a prime selling point for the millions of PS2 owners who are looking to upgrade, but want to continue to enjoy their entire Playstation library. It seems like Sony is saying the hundreds of dollars many PS2 owners spent on their games and system doesn't matter. Yes, people can still use their old PS2 to run the games, but most casual gamers don't want multiple systems clogging up their TVs. This move also makes the PS3 less marketable to families, since the large library of kid friendly titles on the PS2 can no longer be played on the PS3.

Eliminating the USB ports and card readers from the units is less problematic, but it seems as though the actual cost reductions that result from these actions would be minimal.

DIFFICULT TO PROGRAM FOR AND EXPLOIT SYSTEM POWER

Sony's Playstation 3 is said to be incredibly powerful, but until fairly recently, nothing on the PS3 has been more visually impressive tha its supposedly weaker competition, the Xbox 360. Part of this stems from Xbox 360 having the advantage of being available to programmers a year sooner than the PS3, but an even bigger part is how complicated it is to program games for the Playstation 3. According to an article on Hardcoreware.net, the Xbox 360 used popular and easier to use programming tools for making games, while Sony's proprietary system was buggy and difficult for developers use. This resulted in games for the Xbox 360 often looking better and being the first to market for games that arrived on multi-platforms. While this certainly will get better as time goes on, the longer the delay, the more likely we are to see the next generation of systems coming out before the PS3 reaches its potential.

LACK OF EXCLUSIVES AND LIMITED SOFTWARE AVAILABILITY

Next time you're in your local game or electronics store, browse the selection of games available for the Xbox 360 and Wii compared to the PS3. In most cases, the available selection is 2 to 3 times as big. Sony suffered from a lack of standout titles at its launch and has had a hard time closing the gap. With the exception of the latest Metal Gear Solid game, Sony's not really had a must have title in its library that isn't also available for Xbox 360. Most troubling was Sony's loss of Grand Theft Auto as an exclusive.

INITIAL LACK OF THE RUMBLE FEATURE IN THE CONTROLLER

Sony executive Phil Harrison dismissed the Dualshock rumble as a "last generation feature", but many gamers disagreed, questioning Sony's decision to drop something beloved from the PS2 when rolling out the PS3. In reality it was more likely that Sony didn't include the feature due to a patent dispute. It didn't take long for Sony to reverse itself and start making a wireless Dualshock for the system, greatly enhancing the gaming experience.

POOR MARKETING AND POSITIONING

Sony's marketing push seems to be "Hey, it is a PS3! Buy it." Sony has done very little to advertise to anyone beyond hardcore gamers, most of whom have already made their choice. Here are some items that Sony has failed to exploit:

-The superior reliability of the PS3. Playstation 3 systems have failed, but at nowhere near the rates of the Xbox 360. Additionally, the system reportedly runs a lot quieter than the Xbox.

-The superior Blu-Ray player inside of the PS3. If Sony had been thinking, they would have thrown a time display on the front of the PS3 and added in an infrared remote with everyone of them. The PS3 is considered one of the best Blu-Ray players on the market, but according to people I've talked to, getting someone to buy one for their home theater is like pulling teeth. People see it as a game system first and Blu-Ray player second. Sony easily could have gone after both markets.

-The hidden extra costs of the Xbox 360, including the cost of a wireless adapter and an Xbox Live account. Yes, Xbox Live is a superior experience, but it will cost you over $150 extra to buy the hardware and yearly subscription to use it.

-PS2 Compatibility and Microsoft's abandonment of the original Xbox. Had Sony kept the PS2 chipset or software emulation in the system, they could have exploited the fact that they wanted to continue the years of enjoyment people got out of their original Playstation libraries and show that, unlike Microsoft (who swiftly kicked the original Xbox to the curb), they embraced multiple generations of systems.

-The Wii has managed to attract all the attention away from the Xbox 360 and PS3, but few people seem to point out the obvious, the Wii is an underpowered system with relatively few good games. Yes, the Wii has some incredibly enjoyable games and its controllers make for a unique experience, but the truth is that many of the Wii games are underwhelming and the Wiimote and Nunchuck are often poorly implemented into Wii games.

UGLY HARDWARE

Beauty is in the eye of the beholder, but Sony claimed they wanted to make the PS3 a multimedia experience, not just a game machine. So why did they make it look more like a troop transporter from a sci-fi movie than an elegant piece of equipment for your AV stack? This alone may have kept many people from buying it for its Blu-Ray capabilities.

LACK OF CHEAP SOFTWARE

Sony has finally gotten around to putting some of its original release titles into a Greatest Hits series. Unfortunately, the price of these games is still rather high, at $29.99 each. While it is no doubt more expensive to create a PS3 game and produce the discs themselves, a $19.99 price point is what people have come to expect for Greatest Hits games.

SO WHAT CAN SONY DO????

If I were in charge of Sony, I would do the following.

-Lower the price by $100 or more

-Include a major game and/or several Greatest Hits games in with the price of the unit. Sony has tried this with Metal Gear Solid, but would be better served using a family friendly title or two to help promote families buying the system.

-Work out an arrangement with an online rental service (like Netflix's deal with Microsoft) and/or a content provider like Hulu to bring both free and rental video content onto the system. Sony currently has some content for rental over the Playstation network, but it is expensive. An unlimited download subscription model would be preferable.

-Market the system as a Blu-Ray player and multimedia experience and saturate the market with ads. Tout the PS3's reliability relative to the Xbox 360 and its ability to play games and movies in High Definition (something the Wii cannot do). Make the system seem less like a gaming unit and more like an investment in video's future.

-Lower the price on the most popular "Greatest Hits" games to $19.99.

-Work with rental outlets to encourage them to lower the price of Blu-Ray movie rentals. Most people just want to watch the movie, and if it comes down to paying $5 to rent it from Blockbuster on Blu-Ray or $1 to rent it on normal DVD from Redbox, most people are going to use that extra $4 to buy some soda and popcorn.

-Learn from the mistakes it made on the PS3 and make sure that Playstation 4 doesn't repeat any of them.