Why Sony Might Be in the Best Position Moving Forward

This may seem like an odd thing to deduce considering that Sony has been somewhat struggling with PS3 sales, especially outside of Japan, but with the right moves (some of which they seem to be gearing towards doing,) they could end up the tortoise in this rabbit race.

Rather then jumping right into Sony, I think its best to first set the stage by looking at what Nintendo and Microsoft are doing, and how that is allowing for Sony to perhaps slip through.

Nintendo:

Now Nintendo is easily at the front of the console pack with the Wii, as well as leading in the portable market with the DS. The Wii has managed to break into the mainstream in a way that no console really has ever managed to do (at least not since the Atari 2600 perhaps.) Although the console is selling like crazy, they are having some problems with it, most glaringly its the low attachment rate of software. Although people are buying the system, they typically aren’t buying other games with it, they are content with just Wii Sports. But if the console owner manages to buy a game it seems to be Wii Play, or Wii Fit, or one of the numerous mini-game packages.

In addition to that their move to digital distribution seems to generally be somewhat half hearted. Although the Virtual Console is great for getting to play old games that are hard to get a hold of, it seems as though its not really living up to its potential. Same goes with Wii Ware, which seems to generally be something of an afterthought. Although they are pushing the digital distribution with the DSi, it seems as though they are missing out on a great opportunity to link the Wii/DS/DSi together, and let you play games across the platforms (especially the Virtual Console ones which wouldn’t have much difficulty running on the portable consoles.)

Now in Nintendo’s current position they are going to continue to aim at that mainstream (as they have been,) and likely over time are going to produce fewer and fewer games for the core game audience. They’ll likely try to get the mainstream audience to purchase these core games, but it seemsdisadvantageous for them to spend millions on a game that would sell only to the small core audience when they can spend less and sell more copies of games directed at the mainstream.

Microsoft:

They have the core gamer market pretty much locked up. Getting out first, and getting out so much cheaper then the PS3 really helped them get that group, but continued support from their third party developers helped them lock up that market in general. As such they are in a pretty good position going into the future since they just have to keep doing what they are doing in order to continue to be successful, and that seems to generally be what they are doing.

Even so they have started to try and expand out somewhat into the new market of console owners that the Nintendo has pulled into the market with the Wii (at least if the rumors of the motion controller, and other things are to be believed.) It is something of a low risk play for them since it doesn’t take much investment or effort on their part to try and make a grab at these consumers. Even so it seems unlikely to be largely successful because, as I mentioned with Nintendo people are buying a Wii and not much else. It’s a bit hard to expect that these consumers to spend more then $200 on a 360, as well as whatever the additional cost of the additional hardware and games they would need as well. With the Wii it all comes together, and at the $200 price tag its almost an impulse buy for people.

In essence the Wii is sort of a toy for adults, and if Microsoft wants to break into that market they are going to need to have a version of the 360 that can be a toy for adults as well.

Sony:

At this point you might be wondering what’s left for Sony. Nintendo has the mainstream on console and the core on portable, while Microsoft has the core on console. What’s left for Sony is the future.

Yes, that sounds a little odd but stick with me here, since Sony because of its position has the chance to be innovative and very forward thinking. Which may not pay dividends right away, but could be veryadvantageous going forward. If you look at what Microsoft did with Xbox Live on the original Xbox, the service was ahead of its time, but rolling it out when they did allowed them to work through a lot of the bugs and issues that Sony and Nintendo have been dealing with with their online services.

Where this is important is if the rumors of Sony’s game rental service for the PSP Go are true. Now the Go in and of itself is interesting, especially since Sony has managed to make the PSP successful in spite of the UMD being neat, but not really practical. If they can really embrace the digital distribution model with the Go, and incorporate this rental service. I could potentially see the Go beating out the DS/DSi. But that really requires both support from the developers/publishers to get their new and old PSP games into a digital form, but also getting Playstation 1 games on the service.

They are somewhat in a better position in the handheld market however then the console one. Obviously they need to cut the price, but if the talk of the slim PS3 are true, it would let them potentially relaunch the console. At this point they have a very strong line up, and a lot of the titles that people were big fans of on the PS2 are making their way to the PS3 soon, or are already there. You can’t forget that Sony has ruled this space for the previous two generations, so a relaunch aimed at people who used to own Playstation consoles could help them get back into this race.

In addition with this console generation likely to be a longer then originally expected, it could put the PS3 at an advantage since it was rather ambitiously powerful in the hardware department at launch (in order to give it a longer life.) So it’s certainly possible that towards the end of the current cycle we’ll start to see things on the PS3 that aren’t possible on the other platforms due to hardware restrictions.

Of course all of this is really speculative, and I’m not trying to make the argument that they will make a great comeback and be top console again this generation. Rather I am trying to make the point that with their current position they are able to do, and experiment in ways that the other two are not likely to (possibly for the best, or the worst.) But in doing those real worldexperimenting , and doing the leg work on some of these things, they could potentially be lining themselves up to have a leg up on the others, especially when they next console releases come around. Because much like I said before with Microsoft and XBL, they can get a lot of the issues worked out now when most people are necessarily expecting or wanting some of these services, that way when they do expect and want them they already have something established and ready to go.