How Sony Can Boost PS3 Sales

60 Comments

As this holiday’s video game sales are tallied up, one thing is already clear: As an article in the Wall Street Journal notes, Sony’s (s sne) PlayStation 3 remains in a fairly distant third place, still eclipsed by Microsoft’s (s msft) Xbox 360 and Nintendo’s Wii. While it’s probably too drastic for Sony to walk away from the PS3, I definitely think they need some bold and creative changes to make their console competitive, namely to acquiesce to market realities while leveraging two underutilized assets. Here’s how:

Release a discounted, broadband-centric model of the PS3 WITHOUT a Blu-ray:
Sony’s high-definition Blu-ray decisively won the standards war, but the market’s been slow to give them a victory parade. For now, the PS3’s Blu-ray player doesn’t seem to be a huge selling point, but for Sony, it’s a huge investment. (Merrill Lynch estimated the Blu-ray will cost the company $100-$350 per unit over the console’s first three years.) The short-term solution is to manufacture a new PS3 line that comes without a Blu-ray. Sony could sell it for considerably less than the current $400 MSRP. While the standard PS3 will still be for sale, this cheaper model (call it “PS3 Net”) could come with several consumer-selected Sony games pre-installed in the hard drive (see below), and take advantage of high-speed broadband, especially in Japan, for downloading games, movies, and other content via the PlayStation Network. (And PS3 Net owners can still buy an external Blu-ray drive later.)

Slow the Wii’s growth by revamping the Playstation 2:
From Sony’s perspective, the console wars are a battle of opportunity cost, as every consumer who buys a Wii or Xbox 360 is unlikely to buy a Playstation 3. At the moment, that’s roughly 68 million next-gen console owners, according to VGChartz. However, combined Wii/360 ownership is still dwarfed by the 9-year-old Playstation 2, whose install base topped 140 million as of last summer and due to its affordable $130 MSRP, is still selling extremely well. To prevent all these PS2 owners from transitioning to a competitor, Sony should market several add-on packages to keep it current, especially against the Wii: A PS2-bundled with Eye Toy and other rhythm/motion game peripherals with new software, for example, and another bundle which adds wireless Internet connectivity, web browsing and downloadable content. Features like these will convince PS2 owners to stay in the Sony family while they wait for the PS3 price to drop.

Expand the PS3’s audience with a fully leveraged Little Big Planet:
With its cute-ugly characters and whimsical settings, this season’s PS3 exclusive Little Big Planet is far and away the console’s best chance to expand its audience beyond a core fan base of hardcore gamer dudes to kids and women gamers, two audiences the Wii has so far owned. With its creation and network-sharing tools, the game also turns the PS3 into the best platform among consoles for user-generated content. To capitalize on these advantages, Sony should sell a discounted version of the PS3 (see above) packaged with Little Big Planet, with additional enhancements such as a virtual currency/content marketplace, and a mini-MMO space linked to Sony’s new (but in my view, troubled) virtual world, Home.

But how feasible are these suggestions? I ran them by a developer friend who recently left the PlayStation group; he gave me his perspective on condition of anonymity. He liked the Little Big Planet idea most, adding that Sony “should focus more on a marketplace for casual and hobbyist games on the PlayStation Network,” a bit like Xbox Live’s XNA Creators Club, but using Apple’s (s aapl) iTunes app store/iPhone developer program as a model.

As for releasing a PS3 without Blu-ray, that strategy “makes sense and also has a probability of 0.0%,” he told me via email. “Sony is a huge company and there are many things that Sony Electronics and Sony Computer Entertainment would LIKE to do but cannot because of being in the same group as Sony Music and Sony Pictures.”

Similarly, he didn’t think a revived PS2 would do the company much good: “Nothing Sony does is going to slow the Wii’s growth, and if they get in that game, they are making a mistake,” he wrote. “They need to finish the game they started.”

Judging by his reaction, that might be Sony’s biggest problem. Even if the company was willing to make some daring course corrections now, it may be too late to change the heading of such a large corporate ship.

Image credit: www.littlebigplanet.com

60 Comments

netvitrinim

There is just one simple reason the ps3 is slacking behind the 360 and that are the limited number of exclusives. And since the ps3 is getting ported versions of 360 games there was just no reason to buy the ps3 for a long time. But that is dramatically changing at the moment.

Bob

It is allways funny to see these highly over educated analytics describe what Sony has to do to get back on track.

Bring out a cheaper version without Blu-Ray? People are way to focused on the pricepoint of the ps3. Sure when it was $600 that was totally true. but now the ps3 costs 399, which is on par with the Xbox Elite. Looking at what you get the 399 seems more then fair. The Blu-Ray is actually the smartest thing Sony has done in a long time. It’s not just in there to play movies you know. Companies such as Rockstar complained about the 360 limited storage and are working on a ps3 exclusive allready that will take advantage of Blu-ray. Same goes for Team Ninja and any other developer that wants to push gaming to it’s limits like Hideo Kojima. All the ps3 exclusives seem to get 9+ ratings and MS just cant compete with that in the long run.

There is just one simple reason the ps3 is slacking behind the 360 and that are the limited number of exclusives. And since the ps3 is getting ported versions of 360 games there was just no reason to buy the ps3 for a long time. But that is dramatically changing at the moment.

The 360 has a very succesfull launch with all of their succesfull franchises making an appearance on the 360 real early. But right now they to have run out of steam. Everybody is complaining why MS hardly announced anything for 2009, while Sony is just warming up.

In the end it is all about the games and MS just doesnt have the exclusive franchises and first party support Sony has build in over 2 decades. Personally I am more worries about Ms then about Sony. MS seems to be kind of lost at the moment. They cant compete with Sony’s first party support and exclusives and now it seems they are focussing more on casual gaming. If they were smart they would go back to their pc roots.

Bloodymess

The only thing Sony can do is lower its price and hope that enough consoles are sold so they can make the money back with software. Because if an Xbox 3 really does come out 2011 with backwards and forwards compatibility Sony as a game developer is doomed.

Mark

Yeah no blue ray are you dumb every game is made is blue ray.. lol and they are not going to be able to compete with the wii sorry the ps2 just will not work no matter what you do with it. the only thing i can see is if sonny actually made a wii like controller and games but not for sure how that would work.. Nintendo was pretty smart it doing what they did they couldn’t beat sony and xbox so they made something totally different that grabs people who don’t even play consoles. I know people who have one who never even though about and xbox 360 or ps3

Manoj

Well the reason why sony didn’t lower the price tag was that they were already loosing money on every PS3 console being sold for 399$.

Wii-43mn-2006
360-26.4mn-2005
PS3-18.8mn-2006

This doesn’t mark the end of the console’s battle race at all with 360 and also Wii. Well the ideal pricing would be in the range from 320-350$ to enter the competition. And a higher number of exclusives (atleast 3-4 titles) in the first quarter of 2009 will add momentum.

The PS2 had a lesser extent of slow start of 6.5 million by end of 2000 and it shot up to 49 mn in 2002 end aided by great exclusives. This means that somewhere during 2009 end or early 2010 end there can be same magic of tremendous boosting of sales upto 45-50 mn aided by exclusives and ground breaking PS Home feature.

Abu

They need to lower the price.If they lower the price it would sell out quick.They also need to market the right games. Instand of marketing Killzone 2, they market playstation home which was stupid.To appeal to casual gamers they should add the old playstation 1 or 2 games like Pryo,or Crash for 5 or 10 dollars in the plastation network.

K. Jordan

What ever happened to selling great games? Back when the first Playstation was introduced, it had a slew of great games. The system was incredible, but the games are what sold me on buying the system. Games like Teken, Wipeout, Ridge Racer, & ESPN Extream Sports, just to name a few. Now we have the PS3. It’s an awsome system, and a great blu-ray player, but where are all the great games that make the Playstation a Playstation. When did game makers loose their creativity? I’m not saying that there arn’t any good games out there, but if you have this great system start putting some thought into making a great game. I’m a 40 year old gamer who looks for quality in my games and I have quite a colection of games from PS1 to PS3. When I saw games like SSX I had to get the PS2. I was sold on that one game. I want games that I can play with my kid, my wife, the 3 of us together, and games that I can play by myself. Let’s face it, Sony’s Playstation is hurting, not because of the systems price, but the lack of good, quality, ORIGINAL, first party games that made the playstation stand out from all the rest. Quality games means more systems selling. The more games you sell, the more your profits go up, the more people want to buy the PS3 to play the game. The blu-ray is a great feature. I’m not knocking it. The DVD player was a great feature for the PS2, but by returning the focus to making great games should always take priorty. I love my PS3. To me, it’s the best system out there in my opinon. Putting more thought into games that not only adults can play, but kids and even the casual gamers can play, can help the PS3 dominate over Nintendo like it has done in years previous. That’s my $.02 and I’m sticking to it.

Joshua

I think you are retarded. Do you know anything about the PS3? It would become non-functional if they removed the blu-ray drive. All of the games are on blu-ray format and for good reason. Sony put games on blu-ray for a reason, ITS NOT JUST FOR MOVIES! Sony did it to provide true high definition gaming through HDMI. Only sony offers full 1080p resolution. The whole point for HDMI is to transfer a un-compressed signal. With bluray they dont need to compress game data because they have more storage on the disc. All 360 games are compressed and offer only upscaled 1080p which really isnt 1080p at all. 360 has HDMI but its useless because all 360 games are compressed which basically contradicts why HDMI was invented. And it doesnt have any native 1080p games anyway so it doesnt even matter on 360, 360 hdmi is a gimmick. Anyway back on topic the only way I see sony dropping the price is if they make it smaller in overall size when the new 45nm chipset is released next year which uses almost half the power of the current 65nm, They could go with a small external power supply removing the internal one, They could rouglhly decrease size by 60 percent, box it up smaller and send more on one palette when shipping, this would save a lot on shipping. Not to mention the money in materials they would save making it more compact. They may even could go as faas removing wifi, because any true online gamer knows it needs to be hard wired for optimal performance.

Gadget Sleuth

Two things they can do: More quality games, and a cheaper price. For $149-199, i’d think about getting one. For $300-400, no way in the world. Not enough content to justify it, especially with BR prices the way they are.

Curtis

The PS3 is $250, all you need to do is sign up for a Sony credit card.

I love the idea of releasing a PS3 without a Blu-Ray, but that apparently wasn’t very well thought out. All of PS3’s game discs are on Blu Ray discs. I don’t see developers going back to re-release their games on the standard DVD format. On top of that games like MGS4 would suffer terribly from not being on the proper medium (serious texture downgrades and audio would be much lower quality.

And games aren’t the issue, it’s all price right now. The PS3 plays every multi-platform title perfectly and has a large handful of excellent first party titles. The only real way for Sony to compete is to drop the consoles price.

facepalm

I can’t believe people actually think LBP can be released on PS2 “with little to no graphics and content degradation”.

Wow.. just.. wow.

Obviously they’re 360bots who still have PS2 from the previous generation. Do you even realize how computationally intensive something like LBP is? It almost literally requires a supercomputer to achieve real-time rendering with that quality, massiveness and details. Have you even graduated high-school? Wow..

Hint: Read Real-Time Rendering, Third Edition.. or you know what, just look at its cover carefully to understand how retarded your proposal is.

Avg Bear

This is really simple actually. 1) Reduce the price. 2) Release blockbuster titles. Sony can’t seem to do either. While I admire the technological advancement of Blu-Ray, that’s what this console was about from the start. So the PS3 isn’t really a gaming console, but an HD media console. GAMERS want to play GAMES. Duh.

Michael

It’s disconcerning that such knwon publications would be so journalistically irresponsible – neglecting to mention stats like how PS3 sales are up 60% in general from last year and in the strength of worldwide sales.

John

Ridiculous…. only one thing matters… make it $250 and sales would increase.

Jordan

Wow… just… wow…

OK – Point #1 – PS3 games are on Blu-Ray discs. So you want to split the already diminutive PS3 market by having them come out with a Blu-Ray-less PS3? Genius! Let’s divide a market that’s already too small to survive. A PS3 without a Blu-Ray drive would be UNABLE TO PLAY THE 266 some odd games currently available. Yeah, that’s going to make the machine a HUGE success…

Point #2 – The PS2 is over. The only machine selling less than the PS3 right now is the PS2. It’s time for Sony to cut their losses and let it go. At it’s height it averaged around 250 games PER YEAR. In 2008 there were only 150 PS2 games released.

Point #3 – I actually agree with. If Home had the user creation tools of LBP it would go a long way to being a force in virtual spaces. As it is, it’s like they came up with a MMORPG and forgot the game. You have a lobby system similar to Phantasy Star Online/Phantasy Star Universe but once you’re in the lobby there’s nothing else to do.

Unfortunately nobody seems interested in Little Big Planet. Sales of the title have been incredibly weak and, as I pointed out in #1 above, if you strip out the Blu-Ray drive the title would be unplayable.-

Deadmeat

What makes sense the most is a PS3 with DVD drive. From what I understand, Sony has a legal obligation to continue buying CELL, RSX, and SCC from Toshiba as the result of Toshiba’s purchase of Sony PS3 chip foundries early this year. This is why PS3 is still alive even though Howard Stringer would have dropped it last month if it wasn’t for the Toshiba contract. This is sort of like why Sega couldn’t kill Dreamcast until the 10 millionth was built, because Sega had supply contract for 10 million units minimum with its suppliers.

Given that killing off PS3 is not a legal option(even though Howard Stringer badly wants to), Sony’s next option is the removal of Blu-Ray and WiFi functionality. But whatever Sony does, they have only 2 more years to go, because the third-gen Xbox is scheduled to hit the stores in November 2011, complete with backward and forward compatibility(Your existing Xbox 360 games run enhanced on Xbox 3).

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