Rock and a Hard Place: Sony’s Japanese Dilemma

What a dilemma it is, Sony’s PlayStation 3 isn’t as hot as the Nintendo Wii in Japan. Even the Xbox 360 has had some minor success stories in Japan while Sony sits back saying “wtf?”

President, SCE Worldwide Studios, Shuhei Yoshida is pointing the finger at the publishers saying, “What’s happening is that lack of support from the Japanese publishers – not necessarily from intentions but from development capabilities.” (kotaku) Why, though, would publishers push to produce games on the console that’s currently losing market share?

Sony’s position is very tough to deal with because they’re not market leader so publishers are looking for the biggest bang for their proverbial “buck” and that’s not the PS3 right now. You can produce an expensive game for an expensive console or a cheaper game for a cheaper console and make more money.

How, then, can Sony get out of this situation? They must find a way to promote an incentive for publishers to create Sony exclusives or, at least, a Sony “port” of a game to build up their library of must-have titles. Perhaps Sony’s punishment at the hands of Nintendo and Microsoft in the States has a bit to do with their global marketplace issues — they need to put a concerted effort into one of their regions and champion themselves in one realm before trying for all of them. Right now, they’re a watered down expensive console with very few exclusive titles.

Metal Gear Sold 4, Home and Little Big Planet are great reasons to own a PlayStation 3 if the price was a bit more reasonable. Looking at the future, we’ve got Resistance 2 and a few other titles that may make some waves in the industry, at least in the United States, but it’s going to be an uphill battle in which they are the second best this time.

It’s always easy when you’re on the top. PlayStation 3 is not on the top so it’s time to start struggling, cutting prices or enticing publishers to build good exclusive titles.

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It’s now the US government’s turn to question Sony about its online security, which follows the UK government’s scrutiny into the company’s affairs.

In a letter addressed to PlayStation executive deputy Kaz Hirai, the Subcommittee on Commerce, Manufacturing, and Trade has prepared a list of questions related to the intrusion; the list can be downloaded from the New York Times here. The letter asks several questions that Sony has not disclosed to the public, such as:

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The Subcommittee’s press release states:

“Given the amount and nature of personal information known to have been taken, the potential harm that could be caused if credit card information was also taken would be quite significant. The Subcommittee on Manufacturing, and Trade has a longstanding interest in consumer privacy, identity theft, and industry efforts to address threats posed by unauthorized access to consumers’ personal information resulting from a data breach.”

The Subcommittee is requiring a reply by no later than May 6, as part of a privacy driven effort “to protect consumer information.”

Meanwhile, Kaz Hirai will be holding a press conference tomorrow from Sony Japan, to address the PlayStation Network hacking crisis.

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Studios Closing: The Good, Bad and UglyStudios Closing: The Good, Bad and Ugly

Gamers around the world are going to feel the pain in the 2009 holiday season after the economy shakes apart many great development studios. Electronic Arts feels the pain of being a public company as their investors complain about lackluster revenue, THQ deals with closing studios to extend their runway and other firms will lose more headcount in the coming months.

It’s not all bad. But, it’s going to get ugly before it gets better.

The financial market has played tricks on everyone in our global economy and companies across all industries are going to feel a bit of a tightening around the belt. Investors are shaken and doing their best to protect their investments and cutting loose those that aren’t projecting profits in the near future. Game studios are going to slow their financial burn rates, trim a bit of the fat and hunker down the long term. The end result, next years holiday season will have a few less games because those games are being dropped to the floor now.

Mid-sized studios within larger firms may find their projects canceled or put on hold and their employees re-structured or let go while big studios assess what projects will make the long haul. This is the ugly side of the business, having to make a decision on what games stay and what games go with the grief of having to tell some of your best talent “goodbye.”

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Sony Says Competition is GoodSony Says Competition is Good

It seems the console maker who’s trailing in sales typically says how great competition is and how it’s great for the consumer. Sony’s not leading the console race, as of now, and Sony Computer Entertainment Europe president David Reeves stated in a recent interview:

The winner, he said, is the consumer. “That’s why we are not going to slag off Microsoft or Nintendo at all,” he said, “because again it’s rather like the trainer market: one year it’s Reebok, next year it’s Nike, and then suddenly it’s Adidas; it’s cyclical, but in the end everyone wins in five to ten years.”

Sony continues to speak towards their “10 year plan” and how they’re increasing momentum in the market. They’re not winning in sales but with a ten years to go, this is just the beginning. Had this statement come from Microsoft it would be a chance to worry, but Sony has proof to backup their statements.

The PlayStation 2 is going strong as a nine year-old and doesn’t seem to be letting up in game releases. Sony’s press conferences always cover the PlayStation 2 in their talks with the PSP and PlayStation 3 for three big reasons: it’s worth bragging about, it distracts from lower PS3 sales and it separates them from the competition.

Where is the GameCube or classic Xbox in Nintendo and Microsoft’s press conferences and number crunch reports? The fact is, the companies have given up on both products retiring them as “last generation” (translation: poor sales). What better reason to buy a PlayStation 3 than knowing the company is in the game for the long haul?

It might be bit cheaper to buy an Xbox 360 but who’s to say Microsoft isn’t going to announce their next generation console tomorrow and kill off the Xbox 360? Obviously, Microsoft will deny those claims but there will always be doubt without a proven track record.

On the other hand, Microsoft hasn’t seen the success in the classic Xbox and Nintendo hasn’t seen nearly the fervor over the GameCube as compared to their current generation consoles. So, that begs the question, why would they halt all that for new console announcements?

Until they’ve had more time in the market, we cannot be 100% certain what Nintendo and Microsoft are going to do when it comes to next-generation announcements while Sony’s been very clear in each press conference. As Kaz Hirai said to Eurogamer earlier:

“We certainly don’t do the consumer the disservice of basically saying that the consoles have gone by the wayside because we have a new one. Right now, a prime example? PS2 is nine years into it. Where’s the Xbox? Where’s the GameCube?”

If one console maker is looking for a way to stand out and explain their slow sales figures, Sony’s got the PS2 and its long history in their back pocket.

Now, if we could only get those game designers to continue to take it seriously and not put all their eggs into the PS3 basket.