Sony pressured to change game with PS4 console

Feb 20, 2013 by Glenn Chapman
A June 7, 2012 file photo shows fans playing Playstation 3's Hitman Absolution at the E3 videogame extravaganza in Los Angeles, California. Sony is expected to reveal its vision of the future of home entertainment on February 20, 2013 by providing a glimpse at a new-generation PlayStation console that streams games, films, music and more.

Sony is expected to reveal its vision of the future of home entertainment on Wednesday by providing a glimpse at a new-generation PlayStation console that streams games, films, music and more.

" needs a big hit with this game console," said Forrester analyst James McQuivey.

"Not just because it has lost its dominance in gaming to Microsoft's , but because the company needs to make what might be its last attempt to be relevant—not as a device maker but as a ."

McQuivey argued that the Japanese consumer electronics titan must show it can go beyond selling gadgets to skillfully cultivating ongoing relationships with customers who turn to online sources for entertainment.

"It's a big challenge," the analyst said. "While we won't know for a while whether Sony's new box succeeds as a device, we will know right away whether Sony has the right ambitions."

Analysts and industry insiders are certain that a Sony event in New York City on Wednesday evening will be devoted to introducing the PlayStation 4, a console that would hit the market next year.

"Expect Sony to come out, guns blazing, talking about technical details and specifications of what is likely to be a pretty mind-blowing system," said TechSavvy Global strategic innovation consultant Scott Steinberg.

The company will likely also announce "kick-ass games and development talent recruited to the cause," he continued, explaining that "Sony has traditionally been run by engineers and focused on high-performing ."

However, analysts want to see whether Sony goes beyond impressive hardware to a console that integrates services, the popularity of smartphones and tablet computers, and rich portfolios of games, films, music, and television shows.

"The question is going to be how the system has been updated to stay relevant to the times," Steinberg said. "Gamers want to know what they can get on the PS4 that they can't get anywhere else."

The PS4 will succeed consoles that began their lifespan in late 2006.

Sony has remained mum, but that hasn't stopped talk of hardware upgrades such as improved graphics and controllers with touchpads, and chatter of a Sony cable-style service to route film or music content to PlayStation consoles.

Speculation ahead of the event included talk of being able to play full-scale videogames streamed online—a break from the practice of selling titles on disks.

"If Sony can offer streamed top-notch games via an affordable pricing plan, that would be a coup," Steinberg said. "It is a nascent market that will be growing by leaps and bounds in coming years."

Free or inexpensive free games on smartphones and are increasing the pressure on videogame companies to deliver experiences worth players' time and money.

New generation consoles are typically priced in the $400 to $500 range, and blockbuster game titles hit the market at $60 each.

"Sony is under a lot of pressure," said National Alliance Capital Markets analyst Mike Hickey. "Gamers are desperate for innovation and better games."

While Sony is tethered to "legacy" hardware, companies such as Apple and Google are driving innovation with tablets, smartphones, and ways to route Internet offerings to television sets, according to Hickey.

In ramping up content and services for PlayStation, Sony needs to motivate people to upgrade from the current model.

"If Sony wants to win it, they need to show some killer games to get people to go out and spend a lot of money for the core game experience," Hickey said.

He blamed a dearth of compelling titles as a reason for disappointing sales of Nintendo's innovative Wii U consoles, introduced late last year.

"The Wii U is a case study you can't ignore," Hickey said. "Sony at least has to nail it with the games; the core market can drive the mass market."

Industry tracker NPD Group reported that just shy of $9 billion was spent in the United States last year on purchasing or renting video and computer games.

Another $5.92 billion was spent on game downloads, subscriptions, and play on mobile games or at social networks, according to NPD.

"Tablets are in every household and the computing power of tablets is going up every year," Hickey said. "Eventually, the tablet could very well become the console."

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Eikka
3 / 5 (4) Feb 20, 2013
It's not about Sony, but about the game studios. Every big game today is built to a pattern.

It's like pop music really. People buy what they hear around them because that's all they know exists, and what plays on the radio and television and movies is decided upon by big music labels and rightholders, so they stop investing in variety to minimize risk and maximize profits.

In other words, big game studios are screwing the customers over, and they won't compromize their profits for Sony's success. For example, big AAA titles really only cost around $10-15 per unit sold to produce because they're sold worldwide in the millions - but they charge $60, plus DLC, plus micropurchases, plus extras...

It's a money mill. The only thing Sony can bring to the table is streaming games that would eliminate second-hand sales of purchased games and screw the customers over even more.

And that's the really important thing about the next console generation. Who streams first, gets all the games.
Noumenon
2.3 / 5 (9) Feb 20, 2013
big AAA titles really only cost around $10-15 per unit sold to produce because they're sold worldwide in the millions - but they charge $60


So what? You don't seem to understand how capitalism, and thus economics, works. Why would anyone invest in a company when that company only sold their products at what it cost to produce them?! The fundamental principal of basic economics is about V A L U E. The goal is to produce a product that has more VALUE than cost, to produce it. If a AAA game did not have that VALUE of $60, IT WOULDN'T SELL.

The only thing Sony can bring to the table is streaming games that would eliminate second-hand sales of purchased games and screw the customers over even more.


The customers can't get screwed if they don't agree to the terms and don't make the purchases. You see, it is the CUSTOMERS who decide the VALUE based on THEIR demand of the product. How could it be that you don't understand this?!
krundoloss
not rated yet Feb 20, 2013
I agree, adopting a model similar to Steam would bring in more money. The playstation store has never captured my attention, simply because they almost never have a deal or special of any kind. Why are games sold on playstation network for the same price or higher than buying the game in a store? They need to realize that if they charge just $5 less for the digital download, they will save money in overhead by not having to pay to produce disks, cases, and employees at game stores. Also, people cannot sell the games secondhand, so the would be buyer is more likely to buy the game from the playstation store instead of from someone else on ebay. So, if they let go of thier traditional thinking, they can make more money. The whole point being, Charge less for digital downloads and watch your revenue increase!
Noumenon
2.3 / 5 (9) Feb 20, 2013
So, if they let go of thier traditional thinking, they can make more money. The whole point being, Charge less for digital downloads and watch your revenue increase!


Possibly, and that may be what they are intending to do, seeing as how well "apps" sell on portable devices,... but they have some really smart people working at Sony,.... but companies have made errors before in a evolving market.
Frostiken
1 / 5 (2) Feb 20, 2013
*sigh* Another 10 years of terrible dumbed-down games and stagnated development and innovation.

In before a bunch of fanboys try to tell me how "epic" Bungie's next generic sci-fi neon colored FPS game will be, because the trailer was so cool.

Why can't consoles just die already.
arq
not rated yet Feb 21, 2013
@frostiken,IMO this playstation and the xbox (rumored to be coming this year) will be the last.
Eikka
1 / 5 (1) Feb 22, 2013
So what? You don't seem to understand how capitalism, and thus economics, works.


Selling "content", e.g. games, movies, music, has nothing to do with capitalism and the free market because of the copyright system. They're not selling any actual product - they're cashing in on the ignorance of people who can't estimate how much it cost to make and how much everyone else is paying, to figure whether they're paying more than enough.

That's why there's no actual bargaining going on between the producer and the consumer. It's like printing false money with each new copy "sold", because you just have to take it at face value.

Work done once should be paid once, profit and investor dividends included.

The customers can't get screwed if they don't agree to the terms and don't make the purchases.


Well, you could do that, but then you get no play. You're simply holding the situation hostage to force unreasonable anti-free market terms.
Eikka
1 / 5 (1) Feb 22, 2013
If a AAA game did not have that VALUE of $60, IT WOULDN'T SELL.


That "value" is completely imaginary and is a result of a market failure. Because of copyright the game studio can simply declare that the game costs $60 per copy, take it or leave it. There's no competition because you can't make the same game and sell it cheaper elsewhere - not even a sufficiently similiar game - you'd get slapped with a cease and desists and fined for billions.

That's in effect the same as a phone company that jacks up the prices to maximize profits because they own all the cell towers and landlines.

Eikka
1 / 5 (1) Feb 22, 2013
You see, it is the CUSTOMERS who decide the VALUE based on THEIR demand of the product. How could it be that you don't understand this?!


It's the company that decides the "value" of a product. They tend to choose the most profitable price that maximizes the number of sales and the unit price. The individual consumers decide nothing.

You have to remember that the producer is not entitled to a profit. They aren't even entitled to the cost of the product if nobody wants it.

That's why competition is essential for a free market to function properly, and why anti-competetive measures like copyright break the system.

Noumenon
1.7 / 5 (6) Feb 25, 2013
I'm astonished at how ignorant you are wrt to copyright laws, and market forces generally.

Copyright laws serve to protect the investment of the original developer of the product, from those seeking to profit from it while not themselves having to invest in its development. Copyright laws are absolutely necessary, as are laws protecting any private tangible property.

They're not selling any actual product - they're cashing in on the ignorance of people who can't estimate how much it cost to make and how much everyone else is paying, to figure whether they're paying more than enough.


Gibberish. The game IS the actual product, which costs millions to produce. To recoupe that cost and to give motivation for investors to risk their money to begin with, a return on investment is required, and thus it is required to sell many many copies. The consumer only has to know what VALUE that product has to them,.. and buy it or not buy it. Consumers drive the market which is about value.
Noumenon
1.7 / 5 (6) Feb 25, 2013
It's the company that decides the "value" of a product. [...] The individual consumers decide nothing.


Christ,... no, the company does not decide the value. The company decides the price. The value is what people are willing to pay. The company ANALYZES THE MARKET for the given product to determine its VALUE, and THEN decides what price to put on it.

They tend to choose the most profitable price that maximizes the number of sales and the unit price.


That's correct. And how do they determine that price? By magic,... by guessing? Nope.

In order to maximizes the number of sales, obviously they must have a handle on what people are willing to pay for that product,.... which by definition means what VALUE it has in the market place. The consumer determines the value every time.

It is an actual concern of companies, as even you just hinted at,.. not to over price a product if the market can not rationally support it. To establish a price is likened to valuing your home