Game Theory


There’s been some interesting things being said about Sony and its inability to get things right with the PS3.

Pros

  • Its an impressive, if flawed piece of engineering. It has been said that the PS3 platform is designed to last up to ten years. However, Sony’s hand may be forced to refresh much faster by the deeper pockets of rival Microsoft
  • It is a great platform to seed Blu Ray into the marketplace
  • Disaffected customers have been purchasing PS2s and PSP devices – which demonstrates strong brand loyalty, rather than a total rout by rival console makers
  • Sony’s ability to run Linux and powerful silicon may open new markets and partners beyond its existing eco-system
  • Sony can’t afford to fail, as Bill Gates said during the 1997 turnaround of Apple; a near-death experience can be a great motivator

Cons

  • The PS3 has underperformed in the marketplace, Nintendo and Microsoft are hitting target numbers
  • Sony has been outinnovated by Nintendo with the Nunchuk, providing consumers with a new way of interacting with games. In a war of polygons versus playability – playability wins
  • Sony game development is too expensive: the graphics elements of a PS3 game costs 8.6 million USD to develop, and 500,000 units are need to be sold in order to be profitable. This is roughly twice the price as a Nintendo game
  • Sony has ventured into Uncanny Valley with its latest graphics engine. (The dip in postive consumer attitude as the character better mimics human life is the Uncanny Valley.) There is a paradox of realism – after a certain point, the closer to reality that the gaming experience gets in terms of graphics and player experience; the harder it is for the game to seem real. This inability to believe makes it harder for the players to fully engage in the game.

ImpactSony is going to live or die by its software, out of all the consoles Sony’s is the most expensive to develop for and has the smallest user base. This is likely to be the case for the next 12 months at least. From a games developers point of view the chance of break even let alone success is least with the PS3 and probably greatest with the Nintendo Wii.

Couple these business factors with Sony’s distain for its developer community and you may see an exodus of developers to Nintendo.

Sony’s failure will be a breach of trust with large developers and will adversely affect an entire games industry eco-system. Electronic Arts is already taking corrective action; developers run a risk in the rush to get on the Nintendo train that quality slips as they try to get into the Wii market faster with mediocre products that will sit on the shelves.

The less games that sell on the PS3, the greater the loss that Sony suffers on each box. The more fanciful have speculated that massive hardware sales and low games sales could bury Sony. Its sophisticated engineering could be the biggest waste of smarts since the Maginot Line.