In the gaming console world Sony’s Playstation used to be ‘top dog.’ Its Playstation2 released in 2000 sold more than 150 million units making it the biggest selling console of all time. But in the fast moving world of gaming, that’s ancient history. Now the top player in the field is Nintendo’s Wii.
Sony also faces competition from Microsoft’s XBOX. According to NPD Group, sales of new consoles and titles have shrunk every month at U.S. stores for more than a year. Experts say that’s partially because it’s been so long since a new console was released. But it also reflects changing consumer trends.
Joe Feldman, Telsey Group, said: “Online video game play has increased significantly and digital is going to be a big part of the future.”
Tech experts like Ross Rubin say it is crucial for the PS4 to incorporate mobile elements but digital games are a lot cheaper than traditional disk games which can cost upwards of 50 dollars. This poses a challenge for Sony's margins.
Ross Rubin, Principal Analyst, Reticle Research, Full Sot: “There is broad recognition throughout the console business that they need to embrace other forms of monetization.”
Popular games like Call of Duty will likely be able to demand the big bucks but Rubin says lesser known digital games might have to include some form of advertising to make them profitable for console makers like Sony.
Despite the challenges, Sony president and CEO Kazuo Hirai considers the gaming console one of the three pillars to bringing the company back to its glory days. The other two are mobile and digital imaging.
Ross Rubin, Principal Analyst, Reticle Research, Full Sot: “The first priority for Kaz Hirai is to get the company profitable. Is that something that it's capable of doing? Absolutely. Beyond that moving into growth will require capitalizing on something new and inventing industry, which is something that Sony used to be able to do but has had a tough time doing recently.”
The consensus is that it’s not ‘game over’ for Sony but it’s going to have to come up with something iconic like the Playstation, the ‘Walkman’ or the ‘Trinitron’ to get us all talking about the company again. Whether the new PS4 can be that game changer is the question.