PlayStation 3 Has to Suffer, Signals Sony Boss
Sony Europe's David Reeves is almost refreshing at a time when refreshing's in short supply. In an intriguing shift from the standard "everything's coming up roses" mantra, Reeves reflects on the company's third quarter losses of $204m by telling The Guardian the company "simply [has] to suffer a little."
"[We have to]...go down in market share and mind-share," says Reeves. "It's like Ali v Foreman - go eight or nine rounds and let him punch himself out. We're still standing, we're still profitable and there's a lot of fight in us. I don't say we will land a knockout blow, but we're there and we're fighting."
That's quite a shift from the vibe back in early 2006, when the PS3 was slowly cycling up its engines on the launch pad. At the time, the company's water carriers were comparably blithe about the system's chances of failure. One game designer went so far as to call the company "smug" and "incredibly arrogant."
Asked about Microsoft's ability to meet its sales projections in May 2006, then Sony president Phil Harrison told the BBC "I doubt they will achieve that," adding "I think the clear advantages of the PS3 will mean that this product is very well accepted in the marketplace" and "We have a great brand and fantastically loyal consumers."
As it's turned out, the PS3's advantages were anything but clear. Sony's brand remains unimpeachable (tally total PlayStation sales including the PS2 and PSP as evidence) but its consumers are either less loyal than it believed, or the loyalists far less numerous. Maybe someone should have been paying closer attention when early polls in Japan suggested over 90% felt the system's launch price was too high.
Reeves says the company's objective is financial, which, though head-slapping obvious, subtly undermines the populist assumption that a system's success index lies singularly in unit sales.
Our priority has always been the PS3. The forecast was 10m at the beginning of the year and it's still 10m. If we'd cut the price, lost another billion dollars, we might have had a huge Christmas but it would have been followed by a huge loss.
That certainly sounds sensible. It doesn't make the PS3's golden ticket price point any easier to swallow, but it's a reasonable response to critics — myself included — who've repeatedly singled out the PS3's price as its albatross.
Do you have to lose money to make money? Sometimes yes, sometimes no. Judging from Sony's quarterly losses considered alongside PS3 manufacturing costs, holding steady on pricing was, perhaps in hindsight, the wiser choice.
Reeves undercuts his momentum slightly by retreating to value claims to highlight the PS3's prowess:
How do I justify it? Look at the capability of the machines. With PS3, you can go online for free, it's got all the games you want, it's got a Blu-ray drive so you don't need a new player, you can store photos on it, and you've got Home.
Actually, it doesn't have all the games I want (what does?), the Blu-ray drive seems less of a selling point as downloadable video — contrary to my own expectations — may be moving to supersede it. And PlayStation Home? Still a blip on the radar.
Still, it's nice to see someone at Sony with at least a partial grip on reality. Reeves even admits the company has "learned from Nintendo...[and] an enormous amount from Microsoft," concluding that:
Overall, the market has sharpened up individual competitors to do better - we should celebrate the industry and how we've collectively grown it beyond all recognition.
I don't know about you, but I'll drink to that.
Matt Peckham has no dog in this fight and wishes Sony, Microsoft, and Nintendo the best of luck. You can follow him at twitter.com/game_on.
Sony PlayStation 3 40GBPCWorld Rating
Sony PlayStation 3 80GBPCWorld Rating