GamesIndustry.biz: Don't write off Sony

Even if it is an entertaining pastime.

Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer a day after it goes out to GI.biz newsletter subscribers.

Pastime of the week for this particular part of the summer silly season - at least, among those who are quite finished scrambling to come to terms with the fact that E3 has gone to the great convention centre in the sky - seems to be coming up with new and interesting ways to cast doubt upon Sony's prospects in the next generation console race. Fanboy arguments supported by misconception and exaggeration abound - and that's just in the mainstream media and among analysts. What's going on on Internet forums makes even less sense.

Sony only has itself to blame for this, of course, and we can't say that our hearts are bleeding with sympathy for the Japanese giant. The arrogance displayed by SCE boss Ken Kutaragi and his US right hand man Kaz Hirai every time they open their mouths on the topic of the PS3 can be explained by their success in dominating the last generation with PS2, but that certainly doesn't justify it - and the genial manner of the firm's studio boss Phil Harrison can only go so far in terms of repairing the damage done to the firm's image by his overbearing bosses.

However, even if Sony is failing to endear itself to the media, to analysts or to gamers at the moment, that's no reason for the reality of the next generation console battle to be ignored. Judging from reports in the past fortnight, it would be easy for an outside observer to assume that it's all over already; the media paints a picture of Microsoft being victorious before the first shot is even fired, with Sony's overloaded battlecruiser set to sink before it even leaves port.

The fact is that there's little evidence to support that assertion. Even if Microsoft reaches its 10 million unit target by the end of the year - which does look likely - that's still not a lead that guarantees dominance in a market where the top-selling console last time (the PlayStation 2) sold over 100 million units. Both Sony and Nintendo are planning to ship their new consoles at such a rate that they could, in theory, have caught up or passed out Microsoft by the end of 2007; a scenario which is not exactly likely, admittedly, but certainly not impossible either.

Equally certain is that Sony's price point will dissuade some consumers - but a host of factors could conspire to outweigh that price point. If Sony has software with massive appeal to the mass market - something which Microsoft will still lack even coming into 2007, with the resolutely hardcore Gears of War being its key title for Christmas - or better again, if Blu-Ray really does prove to be as popular with consumers as movie bosses seem to believe, then the price point could prove inconsequential, at least for the first ten million units to pass through the channel.

This is quite an optimistic way of viewing Sony's chances, of course - but it's worth balancing out some of the pessimism which has been doing the rounds so often that it almost seems to be accepted as fact in some quarters. Much of this, it's clear, is influenced heavily by the American dominance of English-language media. Microsoft is so hugely successful in America relative to other territories that it can skew the global perspective; whereas the Xbox 360 has sold 3.3 million units in North America, it has sold only 1.3 million in Europe and just 400,000 elsewhere, making it fair to say that North America is still the only territory where the Xbox 360 has seen major success.

However, to listen to the media you would think that the success of the console has been replicated everywhere - which is simply not the case. North America is unquestionably a very important market, but Europe is expected to overtake it in size terms in the coming years, and despite the waning importance of Japan, it is still a key market - and other Asian territories are growing in importance. Microsoft is, in a sense, picking up the easiest consumers first. It is converting Xbox customers into Xbox 360 customers, and playing to a highly receptive home crowd - which suggests that the second ten million will be a lot more difficult than the first, because it will have to expand its reach not only demographically, but internationally.

That's where Sony already has the advantage; the PlayStation brand is synonymous with gaming around the world and across a huge demographic, not just in North America and with a narrow range of players. When reading the various reports which seem to imply that Sony has already failed or that victory is in the bag for Microsoft, it's important to remember that. Microsoft's use of first mover advantage has certainly been more impressive than many observers expected, but come November, the firm will still only have its home crowd in the bag. 2006, and even 2007, are only a warm-up - the battle for hearts and minds among casual gamers, international markets and wider demographics hasn't even begun yet.

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