A look at what Sony wants, and what it has

In a time when both Hollywood and the gaming industry are just about the only two economic bright spots out there, Sony—a company with a giant foot in both worlds—has turned in some of the worst numbers in its history. But when asked to explain its lagging game sales, Sony has one answer that it can always fall back on: the PS3, you see, isn't a system that is focusing on the now. There may be a trend towards the Wii for a little while, and the 360 may be leading in sales at the moment, but the PS3 is a ten-year system. In other words, the system is yet in its infancy... but what does Sony mean by that?





Is this a decade of gaming?

Let's look at some past quotes to see this argument in action. "We didn't get into PS3 for the first six months of 2007—we're into this for the next 10 years and beyond," Jack Tretton told the LA Times in 2007. "A million units one way or another at this point isn't going to worry us.... The PS3 is ahead of the market, while the Xbox 360 and the Wii were designed for immediate market impact," he continued. The sales didn't need to come in 2007, Sony would pull ahead in 2008, and besides, the PS3 has ten years! Everything else will be dust in five or so, right?

The real ten-year machine: the PS2

The PlayStation 2 was released in North America in 2000, meaning that we're a little over eight years into that console's life. By every metric, the PS2 has been a huge success, making headlines when its sales passed 50 million units over its lifetime in North America alone. This is what a ten-year product looks like: a massive early success, a growing value proposition as prices came down with age, and the whole enterprise buoyed by amazing first- and third-party support.

The PlayStation 2 was also at the right place at the right time. Sony had hyped the system so well, and was coming off great success with the PSone, that it was able to crush Sega like a grape. In spite of its technical prowess and devoted fan base, the Dreamcast didn't last long against the full might of Sony.

And Nintendo, for its part, had a cartridge-based system that was expensive to release games for; indeed, those cartridges were just as expensive for consumers. The criticisms that Nintendo aimed for a younger audience and largely found success with its own games aren't new ones; the N64 made money for Nintendo, no doubt, but few were invited to the party. The GameCube, which followed the N64 and found niche success, was in the same mold. When it came to more adult, disc-based games, Sony had the ring all to itself.

Everyone at Sony seemed to know how good they had it, and they grew the installed base by leaps and bounds, creating wonderful games and peripherals for the system. Many of today's gamers can look back on as many warm memories and life-defining moments playing the PS2 as the previous gaming generation could with the SNES. But Sony grew arrogant during this time, and thought that it could out-hype the 360 the same way it did the Dreamcast. This was, to put it lightly, an insane miscalculation. Microsoft is not Sega, and it had the will and the bank account to stay in the red as long as it takes to get profitable. Sony had never gone against a well-entrenched and successful competitor with as great a fighting spirit as Microsoft showed, and they're still dealing with the new marketplace.

The second challenge facing Sony was that the Nintendo Wii isn't the Nintendo 64, and it sure as hell isn't the GameCube. The addition of a waggle-based controller may have invited early jokes, but Nintendo is dominating the industry, and its wave has not broken yet. Sony can claim that it's not in the same market as the Wii until it's blue in the face, but no one can escape the fact that in this economy every dollar given to a competitor's consumer electronics product is a dollar that you're not getting. Just because Nintendo proved that a larger market doesn't care about high definition doesn't mean you can dismiss the effect those sales are having on your business.

While the Nintendo Wii may have a wider demographic than the other two systems, it is still competing with its more powerful friends on retail shelves. Take my friends Scott and Courtney, who are usually my case study when it comes to casual gaming. They're in their late twenties, they have a baby, and they just bought their first HDTV. They have a Wii hooked up to it, and Scott wants to get a 360 or a PS3 so he can enjoy some console online play and perhaps watch a Blu-ray or two. For Christmas, he bought his wife a Nintendo DS, which she plays in the evenings. She likes New Super Mario Bros. Now, while neither Microsoft or Sony will ever say that their home consoles are competing with the Nintendo DS, like every family, Scott and Courtney keep a budget for their entertainment expenses, and that DS means no 360 or PS3 in the near future. It's a competition, and everyone is fighting each other. The Nintendo Wii is hurting the PS3, no matter how much the talking heads want you to forget it.

So while the PS2 is still going strong on a ten-year timeframe, that success is the result of a very favorable set of conditions for Sony, and those conditions don't obtain for the PS3. The Wii and the 360 are formidable opponents backed by deep pockets, and Sony didn't have a fight this hard with either the PSone or PS2.