No product better exemplifies Sony Computer Entertainment’s “everything and the kitchen sink” design mentality better than the company’s Playstation 3 home console, originally a hulk of shiny black plastics and chrome accents that seemed huge — larger still than most DVD players today — but used some advanced parts for 2006: a 3.2 GHz proprietary multi-core computer processor unit (CPU), a 550 MHz Nvidia graphics processor humbly dubbed the “Reality Synthesizer,” and a Blu-ray drive.
After the console’s launch in November 2006, iSuppli estimated the material and manufacturing costs, concluding that Sony (SNE) lost as much as $307 for every console model, and in fact, the Playstation 3 business was in the red until the company’s fiscal fourth quarter of last year. Some gamers viewed it as too costly a purchase initially, while critics questioned its potential in a market dominated by significantly cheaper competition from Microsoft (MSFT) and Nintendo (NTDOY).
More than three years later, Sony Playstation CEO Jack Tretton remains positive — he has said Sony is experiencing its “best year ever” — despite the fact that third party numbers from VGChartz indicates the Playstation 3 remains third behind Microsoft, with 49.2 million PS3s sold globally, a number that in and of itself isn’t shabby but lags behind the 86.3 million Wiis in homes.
Much of that confidence has to do with the Playstation 3’s once-pricey tech, which Tretton argues continues to outclass competitors as far as specifications go. For starters, he points to the Wii’s lack of a hard drive and Xbox 360’s reliance on traditional DVD storage.
“If you’re really going to sustain technology for a decade, you have to be cutting edge when you launch a platform,” he says. “Here we are 4 years into the Playstation 3, and it’s just hitting its stride. We’ll enjoy a long downhill roll behind it because the technology that was so cutting edge in 2006 is extremely relevant today and is conspicuously absent in our competition.”
And while sales numbers — and gamers — might say otherwise, Tretton thinks time has not been kind to the 360 and Wii.
“They’re starting to run out of steam now in terms of continuing to be relevant in 2011 and beyond,” he says. “I mean, you’ve gotta be kidding me. Why would I buy a gaming system without a hard drive in it? How does this thing scale? Motion gaming is cute, but if I can only wave my arms six inches, how does this really feel like I’m doing true accurate motion gaming?”
In some ways Tretton may have a point. What might have been viewed as financially exorbitant back in 2006 could prove useful later on in the Playstation 3’s life cycle. A game like the popular role playing game Final Fantasy XIII used one Blu-ray disc but had to be broken up into three traditional DVDs for the Xbox 360.
When it comes to the Playstation Portable, Tretton doesn’t necessarily view Nintendo’s DS handheld family, which he calls the “Game Boy experience,” as competition. (Though, it’s worth nothing that Nintendo’s DS devices have sold more than 146 million units worldwide, while the PSP currently tops out at 67 million.)
“Our view of the ‘Game Boy experience’ is that it’s a great babysitting tool, something young kids do on airplanes, but no self-respecting twenty-something is going to be sitting on an airplane with one of those,” he says. “He’s too old for that.”
Over the next fiscal year, Tretton and crew are jazzed about two things, the first being 3-D gaming, which is finding its way into upcoming releases like Uncharted 3 and SOCOM 4. Currently, 3-D gaming for the Playstation 3 requires 3-D glasses, which sounds about as cool as going to the dentist to some, particularly given the recent launch of the 3-D, glasses-free, Nintendo 3DS.
“Conceptually, it’s hard for people to put their head around,” he admits. “But when you put them in front of a 3-D TV and you have them play or Killzone or Uncharted or you let them watch the National Championshiop in 3-D, they get it. Just like with HD, people have to experience it, there has to be content that takes advantage of it, and I think this is going to be a pretty nice breakout year for that.”
The other exciting product in the works is a new upcoming handheld device, codenamed NGP, launching holiday season 2011 that follows in the footsteps of the PS3: a quad-core ARM A-9 CPU, quad-core graphics chip, 5-inch multi-touch display, a multi-touch pad on the back, front and rear cameras, and built-in GPS, among other features, all resulting an experience that approaches — and in some ways — surpasses the Playstation 3 experience. Just as Sony did with the Playstation 3, the company arguably tried to cram some of the biggest tech trends into the device, from big multi-touch screens to cameras.
“With the NGP, we asked, what is it that is lacking? We looked at every technology out there, every [bell and] whistle, and how can we make those flexible as possible for consumers to experience.”
When it launches later this year, the result will probably be a higher price point and a profit loss on each unit sold, but for Tretton, it sounds like a relatively small price to pay for longevity in an increasingly competitive market.
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