Should Game Consoles Offer Video?

Playstation 3
Starting early next year, PS3 owners with Internet access in Japan will reportedly be able to download a host of HD offerings directly onto their PS3 hard drives (see our previous coverage). So now that both Sony and Microsoft are trying to provide video services to device owners, it begs the question: Does video have a place in the world of video games?

It depends.

Video game consoles sell best when the hardware company’s main focus is video games. A quick snapshot of the industry bears this out: Sony (SNE) has been lagging due to its belief that impressive hardware specs and Blu-ray can carry the day; a focus on innovative gameplay, meanwhile, has put Nintendo out in front.

But as a source of additional revenue, getting into the video downloading business may not be a bad idea. As one report pointed out, Microsoft expects to make $726 million from its Xbox Live Video Marketplace by 2011.

That alone may have been enough to bring Sony — a company losing money on each sale of the PS3 — into the market video download market. But why isn’t Sony focusing on bringing gamers to its console? In an industry where hardware manufacturers usually sell consoles at a loss and rely on fees from software developers to turn a profit, focusing on the strength of its video game offerings should come first. After all, no one buys a video game console because it will let them download movies — they have Apple TVs for that.

Instead, the average consumer will buy a PS3 because it offers a library of games that will justify the purchase. Only at that point — when consumers own the PS3 and are using it on a regular basis — will Sony incur the benefits of offering VOD service. But until then, the company must focus on attracting developers and gamers because if nothing else, Sony should have found out by now that success in the video game industry has nothing to do with video and everything to do with gaming.

Don Reisinger is a technology columnist who covers everything from Google to HDTVs. He currently writes for over 15 popular technology publications, including CNET’s Digital Home, InformationWeek and Future Publishing in the UK.

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