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"You Reek of Desperation (Hirai)"

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Tue 20/01/09 at 21:03
Regular
Posts: 15,681
As America welcomes its new president, Sony’s SCE chairman, Kazuo Hirai does the fanboy zealot thing of making a ‘console war’ statement then (metaphorically) sticking his fingers in his ears singing ‘la la la la la’ as the customers make their responses known.

As gamers, we have seen the huge change in sales where Sony and Nintendo appear to have switched positions, whilst Microsoft remains in the middle when it comes to their user base. In the early naughties, Playstation 2 was the daddy, Xbox was the beast in second, and GameCube , although doing better than the N64 did, had to settle for third place (ironically, welcomed there by the Playstation 2’s initial advertising campaign). As technology improved, Sony, Microsoft and Nintendo decide to improve their business models for the current generation of gamers. Sony, to continue the Playstation 2’s business model of new technology and new disc format for ‘teh win’; Microsoft, to bring a superior gaming system that puts the focus on the gamer (e.g. Xbox Live); Nintendo, to renew affordable technology with innovative controls and new ideas. I don’t need to mention how Nintendo have turned things around again in their favour, and how Microsoft’s successful campaign has so far seen them get a well established userbase in time for the Playstation 3’s release.

As always, we each have our favourite systems. It is impossible to be completely unbiased. However, you’ve got to laugh at the desperation hidden in the comments made by Kazuo Hirai as he insists there are weapons of mass destruction in Ira...oh wait, I mean states that Playstation 3 will eventually come out on top. What are his reasons for this?

“It's difficult to talk about Nintendo because we don't look at their console as being competitors. They're a different world and we operate in our world - that's kind of the way I look at things.”
So, Nintendo take a different strategy, so they’re not competitors? Hang on, just because Nintendo make a profitable machine with a different control method, they’re not competitors? Sure, you’re not going to see ports of Xbox 360 games on the Wii, instead completely different versions, but they’re still competing for shelf space in the big retail chains. They’re both gaming machines. They’re both after the same market. Or is it more that because Nintendo’s “fad” is selling approximately 4 Wiis for every Playstation 3 that Sony decide the only way they can consider themselves the “official” leaders in the market is by pretending Nintendo aren’t there? That would be like Burger King saying McDonalds aren’t aiming at the same market, or, BBC and ITV aren’t aiming their TV at the same number of viewers! It’s quite sad really.

“..with the Xbox - again, I can't come up with one word to fit. You need a word that describes something that lacks longevity. Last time I checked, they've never had a console that's been on the market for more than four or five years and we've committed to a ten year life cycle, so you do the math.”

Ok, How many games consoles did Sony have on the market prior to the Playstation? None as far as I can remember. Does this mean that there is no way the Playstation could beat its competitors in the gaming world? Well, history is the best judge of that. What Sony are forgetting is that Microsoft’s gaming platform that the Xbox was based on has been the controlling base for many gaming systems for years before Playstation was released. Direct X is Microsoft’s PC console and has been updated so many times that it is still currently ‘selling units’ through Windows. What Hirai forgets is that they’re new to the handheld games console market. Nintendo managed to keep Game Boy selling for more than 25 years (from 1980 to not so long ago) and the Nintendo DS is doing very well too. Using the same logic, I could say, ‘Sony have never had a handheld games machine last a quarter of a century, so “do the math”’ but I will not because there’s more to this market than Sony think.

They told us DVD would be great and, yes, to be fair the market needed DVD and so it was a great feature in the Playstation 2. The market doesn’t need Blu-ray with digital downloads on the increase. So why force it on gamers with the Playstation 3. It increases the manufacturing cost which means either a high R.R.P. or sacrificing profit in the hope that game sales will make up for it. Sony seem to be doing a bit of both, recently declaring losses, but still not making the system as affordable as it needs to be to sell to the masses...especially in the current economic climate where, despite entertainment sales being on the increase, people are still looking for value.

Affordability isn’t the only problem Sony face. They made PS3’s architecture a lot more difficult to program for, alienating the developers. This is especially crucial when they recently lost major exclusive franchises which used to be considered system sellers such as Final Fantasy and Grand Theft Auto. In fact, the ease of programming the Xbox 360 allows for means Microsoft are gaining franchises and often end up getting the best out of a game (see GamesRadar’s article on superior ports on inferior consoles article and check out The Orange Box). Hirai does have an explanation for this, however:
"We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

So lets get this straight...you don’t want developers to develop the best games now. You want them to struggle, whilst thriving on Xbox 360 and Wii with lower development costs, and instead get the best out of the machine after lots of practice when the next Microsoft and Nintendo systems are practically ready for release? Surely, developers consistently getting the best out of a machine is what sells consoles. Yes, as developers gain experience in developing for a systems, the benefits to gamers and developers alike are great. But if proves more cost-effective to reduce development costs by making for an easier system, you may never unlock a system’s full potential until its too late.
But as Microsoft’s Xbox Live Arcade proves, getting the best audio and visual effects out of a system doesn’t always mean getting the best sales. The original Xbox sold well (despite losing to PS2) but Xbox 360 is doing a lot better. It may have had a head-start on the PS3, but despite not having amazing 3D graphics, the XBLA games are doing great. How many people who have an Xbox 360 have not tried Geometry Wars?

What worries me as a gamer is that each major system thriving means I win, but Sony forgetting how business works threatens that. Even though I don’t own a Playstation 3, I want it to sell well, I want Sony to make a profit, I want games to sell. Sony seem to be missing the point with their strategies. They’re not developing their plans to coincide with the market, and that’s why Nintendo and Microsoft are doing so well. They’ve tapped into a casual games market, which, although the term is more corporate jargon than an accurate description, means they’ve discovered that those who don’t necessarily play the hardest and challenging games instead like to play pick-up-and-play games that don’t necessarily require long sessions to enjoy and get the most out of.

Wii Sports has become the biggest selling game in history. Wii Fit has topped the games charts multiple times despite its price tag. Dr Kawashima’s Brain Training has stayed in the DS charts for a couple of years now. Nintendo especially have discovered a hole in the market and filled it. Sony have tried to continue with what made the Playstation and Playstation 2 so successful, but are forgetting it is the gamers that count. Without them on your side, you’re nothing in the games world (ask SEGA)
I think Hirai’s statement is an act of desperation. They’ve gone from top to bottom, which means if they don’t learn from their mistakes, he could be kicked off the chair (even if it means getting a nice large payout that means he won’t need to work again. I’m not saying that the competition (or lack of as Hirai tries to convince us) are perfect, but like a pack of wolves they can smell the fear and will not be afraid to attack whilst they are strong. I hope Sony turn things around, remember the customer, and make the games market seem a little more interesting, instead of burying their heads in the sand and pretending they’re not in danger.

As a side note: I know I’ve always been a Nintendo fan through and through, but despite that, I’ve learnt to appreciate other systems and lose the ‘fanboy’ tag I developed for myself when I joined the internet community 13 years ago. I regularly play Xbox 360 and Wii, and occasionally play games on my PS2. I’ve even been known to dabble with a few original Playstation games. Please don’t see this as a flame-war post. I genuinely think Sony are making a serious mistake and are going to alienate the developers, shareholders, and strengthen their competitors by pretending they’re winning. Hirai might be right, Sony may make the system last 10 years. But at what cost? SEGA tried to make out that GameGear was bigger and better and lost out to Nintendo. Nintendo tried to make out they were bigger and better and lost out to Playstation. Microsoft tried to make out they were bigger and better and lost out to Playstation 2. SCE are now trying to make out they’re bigger and better and are losing out to Wii! There’s more to gaming than specs, and that is something Sony once knew, but are forgetting quickly. Also, pretending you’re the ‘official market leader’ doesn’t actually mean that you are...

Sources: Games Radar, C&VG, Guinness World Records Gamer’s Edition 2008, Games Industry.biz.
Tue 20/01/09 at 21:03
Regular
Posts: 15,681
As America welcomes its new president, Sony’s SCE chairman, Kazuo Hirai does the fanboy zealot thing of making a ‘console war’ statement then (metaphorically) sticking his fingers in his ears singing ‘la la la la la’ as the customers make their responses known.

As gamers, we have seen the huge change in sales where Sony and Nintendo appear to have switched positions, whilst Microsoft remains in the middle when it comes to their user base. In the early naughties, Playstation 2 was the daddy, Xbox was the beast in second, and GameCube , although doing better than the N64 did, had to settle for third place (ironically, welcomed there by the Playstation 2’s initial advertising campaign). As technology improved, Sony, Microsoft and Nintendo decide to improve their business models for the current generation of gamers. Sony, to continue the Playstation 2’s business model of new technology and new disc format for ‘teh win’; Microsoft, to bring a superior gaming system that puts the focus on the gamer (e.g. Xbox Live); Nintendo, to renew affordable technology with innovative controls and new ideas. I don’t need to mention how Nintendo have turned things around again in their favour, and how Microsoft’s successful campaign has so far seen them get a well established userbase in time for the Playstation 3’s release.

As always, we each have our favourite systems. It is impossible to be completely unbiased. However, you’ve got to laugh at the desperation hidden in the comments made by Kazuo Hirai as he insists there are weapons of mass destruction in Ira...oh wait, I mean states that Playstation 3 will eventually come out on top. What are his reasons for this?

“It's difficult to talk about Nintendo because we don't look at their console as being competitors. They're a different world and we operate in our world - that's kind of the way I look at things.”
So, Nintendo take a different strategy, so they’re not competitors? Hang on, just because Nintendo make a profitable machine with a different control method, they’re not competitors? Sure, you’re not going to see ports of Xbox 360 games on the Wii, instead completely different versions, but they’re still competing for shelf space in the big retail chains. They’re both gaming machines. They’re both after the same market. Or is it more that because Nintendo’s “fad” is selling approximately 4 Wiis for every Playstation 3 that Sony decide the only way they can consider themselves the “official” leaders in the market is by pretending Nintendo aren’t there? That would be like Burger King saying McDonalds aren’t aiming at the same market, or, BBC and ITV aren’t aiming their TV at the same number of viewers! It’s quite sad really.

“..with the Xbox - again, I can't come up with one word to fit. You need a word that describes something that lacks longevity. Last time I checked, they've never had a console that's been on the market for more than four or five years and we've committed to a ten year life cycle, so you do the math.”

Ok, How many games consoles did Sony have on the market prior to the Playstation? None as far as I can remember. Does this mean that there is no way the Playstation could beat its competitors in the gaming world? Well, history is the best judge of that. What Sony are forgetting is that Microsoft’s gaming platform that the Xbox was based on has been the controlling base for many gaming systems for years before Playstation was released. Direct X is Microsoft’s PC console and has been updated so many times that it is still currently ‘selling units’ through Windows. What Hirai forgets is that they’re new to the handheld games console market. Nintendo managed to keep Game Boy selling for more than 25 years (from 1980 to not so long ago) and the Nintendo DS is doing very well too. Using the same logic, I could say, ‘Sony have never had a handheld games machine last a quarter of a century, so “do the math”’ but I will not because there’s more to this market than Sony think.

They told us DVD would be great and, yes, to be fair the market needed DVD and so it was a great feature in the Playstation 2. The market doesn’t need Blu-ray with digital downloads on the increase. So why force it on gamers with the Playstation 3. It increases the manufacturing cost which means either a high R.R.P. or sacrificing profit in the hope that game sales will make up for it. Sony seem to be doing a bit of both, recently declaring losses, but still not making the system as affordable as it needs to be to sell to the masses...especially in the current economic climate where, despite entertainment sales being on the increase, people are still looking for value.

Affordability isn’t the only problem Sony face. They made PS3’s architecture a lot more difficult to program for, alienating the developers. This is especially crucial when they recently lost major exclusive franchises which used to be considered system sellers such as Final Fantasy and Grand Theft Auto. In fact, the ease of programming the Xbox 360 allows for means Microsoft are gaining franchises and often end up getting the best out of a game (see GamesRadar’s article on superior ports on inferior consoles article and check out The Orange Box). Hirai does have an explanation for this, however:
"We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

So lets get this straight...you don’t want developers to develop the best games now. You want them to struggle, whilst thriving on Xbox 360 and Wii with lower development costs, and instead get the best out of the machine after lots of practice when the next Microsoft and Nintendo systems are practically ready for release? Surely, developers consistently getting the best out of a machine is what sells consoles. Yes, as developers gain experience in developing for a systems, the benefits to gamers and developers alike are great. But if proves more cost-effective to reduce development costs by making for an easier system, you may never unlock a system’s full potential until its too late.
But as Microsoft’s Xbox Live Arcade proves, getting the best audio and visual effects out of a system doesn’t always mean getting the best sales. The original Xbox sold well (despite losing to PS2) but Xbox 360 is doing a lot better. It may have had a head-start on the PS3, but despite not having amazing 3D graphics, the XBLA games are doing great. How many people who have an Xbox 360 have not tried Geometry Wars?

What worries me as a gamer is that each major system thriving means I win, but Sony forgetting how business works threatens that. Even though I don’t own a Playstation 3, I want it to sell well, I want Sony to make a profit, I want games to sell. Sony seem to be missing the point with their strategies. They’re not developing their plans to coincide with the market, and that’s why Nintendo and Microsoft are doing so well. They’ve tapped into a casual games market, which, although the term is more corporate jargon than an accurate description, means they’ve discovered that those who don’t necessarily play the hardest and challenging games instead like to play pick-up-and-play games that don’t necessarily require long sessions to enjoy and get the most out of.

Wii Sports has become the biggest selling game in history. Wii Fit has topped the games charts multiple times despite its price tag. Dr Kawashima’s Brain Training has stayed in the DS charts for a couple of years now. Nintendo especially have discovered a hole in the market and filled it. Sony have tried to continue with what made the Playstation and Playstation 2 so successful, but are forgetting it is the gamers that count. Without them on your side, you’re nothing in the games world (ask SEGA)
I think Hirai’s statement is an act of desperation. They’ve gone from top to bottom, which means if they don’t learn from their mistakes, he could be kicked off the chair (even if it means getting a nice large payout that means he won’t need to work again. I’m not saying that the competition (or lack of as Hirai tries to convince us) are perfect, but like a pack of wolves they can smell the fear and will not be afraid to attack whilst they are strong. I hope Sony turn things around, remember the customer, and make the games market seem a little more interesting, instead of burying their heads in the sand and pretending they’re not in danger.

As a side note: I know I’ve always been a Nintendo fan through and through, but despite that, I’ve learnt to appreciate other systems and lose the ‘fanboy’ tag I developed for myself when I joined the internet community 13 years ago. I regularly play Xbox 360 and Wii, and occasionally play games on my PS2. I’ve even been known to dabble with a few original Playstation games. Please don’t see this as a flame-war post. I genuinely think Sony are making a serious mistake and are going to alienate the developers, shareholders, and strengthen their competitors by pretending they’re winning. Hirai might be right, Sony may make the system last 10 years. But at what cost? SEGA tried to make out that GameGear was bigger and better and lost out to Nintendo. Nintendo tried to make out they were bigger and better and lost out to Playstation. Microsoft tried to make out they were bigger and better and lost out to Playstation 2. SCE are now trying to make out they’re bigger and better and are losing out to Wii! There’s more to gaming than specs, and that is something Sony once knew, but are forgetting quickly. Also, pretending you’re the ‘official market leader’ doesn’t actually mean that you are...

Sources: Games Radar, C&VG, Guinness World Records Gamer’s Edition 2008, Games Industry.biz.
Wed 21/01/09 at 13:28
Regular
Posts: 14,117
A good read, well done.

I'd seen these comments of his the other day, and it reminded me what a plank that man is. Making statements such as "we want people to want to work overtime to buy our machine" before the damn thing was even released was a ridiculous thing to do. Coming out with things like this now make it sound like he's desperate, as you said.

The thing is, they are already making a loss on the machine, so while dropping the price would see an increase in the installed base (and subsequently money coming in from more game sales) they would actually lose more money in the short term.
Wed 21/01/09 at 14:52
Moderator
"possibly impossible"
Posts: 24,985
Fair enough that Sony are not pulling hard enough in the right direction, but the problem stems from just one source: Money.

While creating an early userbase by bringing the 360 forward (and thus causing trouble later with RROD, a gamble that still seems to have paid off despite the issues), it was the vast sums of money they used to entice 3rd parties to create exclusives or timed exclusives, get them to release previously Sony only games on the 360 and then buy up companies like Rare.

In the gaming world it's the unique titles that sell the system and the 360 has done well in this department. Sony are now pulling their pants up and doing something to provide better first party support but they need to focus on enticing those same 3rd parties (or new ones) back to the PS3.

In addition, PR on both sides has been both fierce and stupid. Right from the beginning, even before the PS3 was out, Microsoft PR started to diss the PS3 off (a 'where is it?' campaign). Sony retorted as soon as the PS3 was out with a chart of equivalent hardware, something they've recently re-done and MS have also used. Both of them are fighting like kids and neither is any better than the other. They have both publicly said that they don't think the Wii is in the same 'battle' as them.

But the important thing is that PR is not the same thing as the people who make the games and make the system a success. Most of us have just learnt to tut at the first sound of a Microsoft or Sony rep or even a boss as they try to shout across the playground. The PS3 is in third place because it doesn't have the software to match the 360 and the price is still too high to entice others. It is, however, improving.

The rest is up to whether you see 3 companies/consoles working in today's market. It has for a long time been a 3 horse race, but the 3rd horse doesn't have to be the last. If the console sells and sells well enough then it's surely not a failure?

As for Nintendo. The Wii was a great idea, cheap to build but ultimately changing the game market far more than new powerful hardware could. Nintendo PR hasn't, to my knowledge, slagged off the other two because it doesn't see itself in the same game. A new audience means more sales from a previously untapped source, plus the die-hard Nintendo fans of course! The only people Nintendo are currently peeing off is the 'fans' who think that Nintendo isn't catering to the 'hardcore' (see my thread on this) which is, to be honest, ridiculous.

Finally, I'd just like to add that this was a great idea for a thread and should win a GAD!
Wed 21/01/09 at 15:27
Moderator
"possibly impossible"
Posts: 24,985
And here, right on time, is Microsoft PR's reply from Greenberg :

"This sounds like an old hardware company that's comfortable with its market position," said Greenberg. "That complacent attitude is out of touch with where the industry and consumer is today. This generation won't be won over just hardware specs, but who can out-innovate when it comes to online and software. This is the kind of stuff that's in our DNA, and frankly moves the console war onto our home court."

"I'm confident we will outsell the PS3 throughout the entire generation by providing more innovation and building the best and broadest games library while growing our entertainment experiences on the leading online network."

"With a U.S. install base lead now of more than 7 million units (according to NPD), I can't imagine any scenario where the PS3 can catch up with us. In fact, even if you doubled the current PS3 sales and Xbox 360 remained flat, they couldn't close the gap until 2014,"
Wed 21/01/09 at 20:42
Regular
Posts: 15,681
Thanks for the comments :)

I was discussing this with a good mate in work today and we believe Nintendo are actually aiming to sell to the same gamers (as well as the established Nintendo fans), it's just their strategy seems to leave room for Wii gamers to have more than one system.

I'm content with my Xbox 360, Wii and DS (and PC) for gaming. Sure, that means I may be a little biased but I do wish I could join in in games like Little Big Planet. There are unique games on the Playstation 3 that I know I would enjoy, but Sony joined the race too late, and to be honest, I quite agree with Greenberg in that their "old company comfortable with their market position" comment. They're using the PS2's strategy in the current generation, and instead of saying, "Hey, you're right, we are in third place, so this is what we're going to do..." it's all about slagging off the opposition (which includes Nintendo). This is something all parties are guilty of, although Nintendo don't really need to say anything whilst they're on top.

I don't think it is possible now for Sony to cut the price by much and hope to gain a profit. But I do completely agree with you PB that coming in third place is not necessary a failure. In terms of business, Sony need to be making a profit to be a success. A third place profit is better than a top place loss. GameCube was in third place, now look where the Wii is.

One of the bigger issues facing Sony is that as Microsoft have had the head-start and gained a well-established userbase, they've got to prove their's room in the race for them. Although I believe Nintendo are after the same gamers money as Sony and Microsoft, I do agree they're different enough this time around that they're not treading on anyone's toes, nor are their toes being trod on. Sony and Microsoft, however, are fighting for the same spot on our shelves. I don't feel I need to spend any money on the Playstation 3 at present to get any more out of gaming than I am out of the machines I've got. However, I'm sure many Playstation 3 fans would also feel the same.

Microsoft and Nintendo have understood that new and innovative ideas work. Nintendo actually announced this strategy in the days of the GameCube, if I remember correctly, with statements that the days of graphical improvements are coming to an end and it is innovation that will win the hearts (and cash) of gamers. I bet Nintendo are thinking, 'we told you so'. Software developers aren't in the clear either, mind. The latest Tomb Raider didn't sell as well as expected and so the series is looking to reinvent itself.

I want Sony to convince me to buy a Playstation 3. I don't like missing out on any top games that take my fancy - but there's not enough (yet) to get me to spend the amount of money I would need to to buy one, and Blu Ray is hardly as groundbreaking as the VHS to DVD change...especially when I don't have a HD TV and probably wont for a while yet.

Instead, Hirai makes comments without substance, and Aaron Greenburg reads this thread and like a teenager who forgets to do their homework until last minute, re-words my phrases to make them his own (and adds a lot more bias to the mix)*.

*Ofcourse, the chances of my opinions being read by Microsoft, Sony or Nintendo are similar to my chances of winning Miss Wales whilst wearing a sheer pink bikini thong and singing 'I'm too Sexy for my shirt' by Right Said Fred...
Thu 22/01/09 at 13:46
Moderator
"possibly impossible"
Posts: 24,985
Good luck with the Miss Wales competition. :)

Anyway, yes, Sony need to do something, that much is obvious. The Blu-ray difference IS enough to warrant getting a blu-ray of some sort, but you hit the nail on the head when you say you haven't got an HD-TV as yet, this is the deal breaker and I think HD-TV, while on the up, will take a while to saturate the market.

But a gaming system is all about the games. Sony need to work hard to produce more must-have games and then they can lower the price of the system further. Microsoft make a loss on consoles but a profit on their games, Sony need to do the same to keep up with the competition.

The news today adds further pressure. Losses are worse than expected for Sony's Game business in general, so they are restructuring and loosing headcount. This may hopefully force their hand and let them re-evaluate the business before they have to start thinking about getting out altogether.
Mon 26/01/09 at 06:42
Regular
Posts: 15,681
HDTV choice is what made Xbox 360 seem less of a HD bully. Microsoft acknowledged that those with the technology will want to benefit from HD...so included HD compatability, but at the same time remembered that some gamers will still be playing on 14" CRTs in their bedrooms with no access to HD. I don't feel HD pressured by Xbox 360.

However, Sony seems hell-bent on selling Bravia HDTVs with every PS3 by telling us we're better off with HDTV and couldn't live without it. A marketing strategy that will surely cost them further in this 'unprecedented*' financial situation where people, like me, can not afford a HDTV at the moment. Atleast when PS2 was bringing DVD to the mainstream, there was a space in people's homes for DVD as no TV upgrade was necessary.

That's why this whole value for money thing doesn't wash with me.


*That's for another debate
Mon 26/01/09 at 09:10
Moderator
"possibly impossible"
Posts: 24,985
Most of the time my PS3 is on an SD TV and it's fine like that, even Blu-ray seems clearer than DVD on an SD TV.

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