Can Sony PS3 Get in the Game?  November 12, 2007


Holiday Season Critical for Year-Old Console Amid Aggressive Push, Price Cut

It's crunch time for PlayStation 3. But Sony's got a plan: to promote its platform beyond video gaming.

With its most aggressive marketing push to date, Sony Computer Entertainment America is aggressively positioning the PS3 console as the center of consumers' home entertainment. Along with an equally impressive price cut -- to $399 from $599 -- PS3 finally may be ready to challenge rivals going into the holiday season, when, according to NPD Group, nearly 50% of video-game products are sold.

"It's not a system that's just about one thing," said Peter Dille, SCEA senior VP-marketing and PlayStation Network. "The campaign speaks for itself in that it's really trying to demonstrate everything PS3 can do -- it's bursting at the seams with all this entertainment capability."

Sony Playstation 3




PS3's marketing will center on gaming but will also highlight features such as its built-in high-definition Blu-ray player, downloadable content options and compatibility with PSP.

While one holiday season can't make or break any console, most agree this is a critical time for Sony. "It's the second season, and you're now past the early adopters and tapping a more general consumer," said Michael Gartenberg, analyst with Jupiter Research. "Sony is facing not only a reinvigorated Nintendo ... but also Microsoft."

Sony has been outdistanced by both of Sony's next-generation competitors. PS3 had sold 1.9 million units in the U.S. through September. But Wii sold more than double that: 4.5 million units in the same time period, according to NPD Group. And Xbox 360, which bowed one year earlier, outsold PS3 by a factor of three, with 6.8 million units in the U.S. in two years.


'Icing on the cake'

Gone are crying babies in the PS3 ads. Instead, PS3's latest TV spot, driven by music from heavy-metal band Saliva, begins with black vinyl hands punching out of the PS3 black box, some with clenched fists, some wielding weapons and at least two brandishing sports equipment. PlayStation Home, Network, and Blu-ray also appear morphing in and out of the box. Mr. Dille said several more TV spots are under development and will feature different types of content, entertainment features and third-party partnerships. TBWA/Chiat/Day, Los Angeles, which created the ads, is defending its agency-of-record status in a review.

Sony is also working with retailers to craft end-to-end Sony product packages, such as a Sony Electronics Bravia flat-panel TV bundled with a PS3. Mr. Dille said those types of deals will continue through the season. But what about gamers who still just want to, um, play games?

Analysts say that while add-on features and special deals help market a console, game content still drives the majority of sales.

"Our research shows that the most compelling reason a consumer purchases a new gaming system is to be able to play the games that they're eager to get their hands on," said NPD analyst Anita Frazier in an e-mail interview. "All the other features are certainly icing on the cake, but game content is still king when it comes to inspiring sales."


Catching up

A strong holiday could go a long way for the PS3. Sony has already seen a "very large uptick in sales across the board" after just one weekend of the lowered $399 price, Mr. Dille said. "We're feeling really confident, and there's a great sense of enthusiasm here." He added that many in-house think the $399 price point will make a big difference.

Some analysts aren't so sure. "They created a product that was priced out of the market, and the end result is the Wii came up and stole their share," said Rob Enderle of the Enderle Group. "Wii was outselling them 6-to-1 midyear, and while that's now closer, at 2-to-1, if you were once the leader and now you're the 1 in that equation, that's not a good thing."


Email: Beth Snyder Bulik



To be fair to Sony, the actual hardware was never really going to be in much doubt. And after your first few hours in the company of the PlayStation 3, you're likely to be impressed.


Several initial thoughts went through this reviewer's head. Firstly, the machine's really quite heavy. Secondly, aesthetically, it's really quite smart. And thirdly, and surprisingly, is that given the immense processing grunt under its glossy, buffed-up exterior, it's very quiet in operation. It certainly puts the Xbox 360 in the shade in that department.


When we switched on for the first time, following as simple a connection procedure as you'd expect with a games console, we signed up for the PlayStation Network and downloaded an advised, albeit not compulsory, update. This involved us getting the machine online, which was thankfully straightforward. A built-in wireless receiver or the Ethernet port at the back are your two choices, and we tried both, finding the machine adapted to either at breakneck speed.

The download and application of the upgrade took care of the first five minutes or so, but eventually we got to spend some time with the browser interface. This bears striking similarities to the one Sony employed with the PSP, and given that the two machines have a degree of interoperability, that's perhaps unsurprising.


It was interesting to note, going through the menu, just how Sony has made it easy to support elements you'd usually not expect it to be so welcoming of. The option for an OS install took us aback, and we were pleased to see the Folding@Home client built in too. But on top of that, the likes of keyboards, mice, Web-cams and such like - all of which can hook up via the assorted USB ports - are very easy to add.


Media support is well-rounded, too. That 60GB hard drive inside the machine can be filled with music files, for instance, and several codecs are supported. Likewise, there's Blu-ray and DVD playback. The former - the reason why the machine is so over deadline and so over budget - actually turns out to be a bit of a trump card. While we've not had the pleasure of many Blu-ray players, we're informed by colleagues who have that the PS3 is one of the finest, if not the very best, Blu-ray disc playback device on the market, to the point where many are picking up the PS3 for precisely that reason, rather than for its gaming prowess. It's aided - again, for the time being scoring a point over its Microsoft-produced rival - by the native inclusion of HDMI, meaning full 1080p output is well within the realms of the console (a new model of the Xbox 360 is expected to add this feature shortly).


The games, which ultimately will be the biggest influence in the rise or fall of the machine, we'll look at in a separate review. But there's little doubt that the PS3 is capable of some incredibly impressive-looking games. There's no obvious outright classic available as this review was written, nor a clear one on the horizon, but Sony's track record should ensure that the shortage isn't a long-term one. There's also, of course, Sony's equivalent to Xbox Live Arcade, whereby games can be bought and downloaded onto the console online. A free game was available at launch and you can expect lots more, for sub-10 price tags, in the future.


But there are still problems here, and they break down into price, the competition and backwards compatibility. In reverse order, then, the European model has been compromised slightly and the hardware that allowed support for PSOne and PS2 games has been cut back. As a result, software emulation is doing more of the work, and it renders a massive chunk of the Playstation back catalogue incompatible at this point in time. Given the price premium Europeans are paying, we find this a complete and utter disgrace.


Furthermore, for the same money as the PlayStation 3 goes for, a gamer could pick up both a Wii and an Xbox 360, and arguably they'd get better value that way. 425 for a games console is, in the modern era, unacceptable, and ironically the only people who will initially get real value from it are the aforementioned Blu-ray player customers. Gamers aren't getting the best end of the deal.


So it all leads to point one: price. 425 is a massive price tag and one that, while the hardware may justify, the competition makes a mockery of. Sony is, infamously, making a heavy loss on each unit sold at the moment too, which may yet tie its hands for future price cuts, and that leaves the PlayStation 3 in a very weak place. The machine is genuinely excellent and in many ways it's better




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