Sunday, April 09, 2006

Whither the PS3?

More on video games. Sorry. But this post will actually delve into the clash of corporate titans and the shaping of the tech landscape in the living room, so bear with me.

Another pal of mine, Joe, who pens the enjoyable The Adventures of JoMa, was asking me about the 360. Apparently he likes what he sees but has been a PlayStation guy, is averse to giving Bill Gates more of his cash, and kinda wants to wait for the PS3.

As in its previous two iterations, the third generation of the PlayStation could very well dominate the industry. But Sony is facing several new challenges that cast serious doubt on whether it will remain king of the video game hill this round.

Certainly if there's any product Sony should get right, it's the PS3. They've owned the market for a decade, have a loyal fan base, a deep library of exclusive games, and the trend-setting Japanese fan base firmly behind them.

But right now no one outside Sony knows exactly how good the machine will be. No real in-game demos have been seen, much less played, and experts have had trouble comparing the hardware specs to the 360 because the technologies are so different.

It's possible that Sony's machine will be more powerful than the 360, especially because they'll have had an extra year to tweak the specs and get everything optimized. But word in the dev community is that the Cell processor is a bitch to develop for and may have caused some of the delay in launching.

There are also concerns over Sony's gamble on Blu-Ray DVD. When Sony put regular DVD in the PS2, it was already a unanimously adopted format, and it made sense to have the extra disk storage space to hold the vast amounts of game data.

Now Sony wants to use the PS3 as a way to get millions of Blu-Ray players into homes, despite the fact that there is a rival format -- HD-DVD -- backed by Toshiba, Microsoft and others. Studios are also split on the format and there are likely to be few movies available initially. There is little benefit to actual gaming because there is still significant headroom in regular DVD technology.

In fact, Blu-Ray has already hurt Sony's launch. The company recently admitted that problems in finalizing Blu-Ray technology was behind the PS3 delay, and they've heavily hinted that it is going to make the PS3 very expensive.

Some consultancies have done estimates of what the PS3 will cost, and the bill of goods comes out to something like $700 or more. Now, I half suspect that Sony has been talking up the price, only to set up a positive reaction when they come out and price it at $400 or less. But they'd be taking a huge loss on each system sold, and Microsoft will have had the 360 in production for a year, so they might be in a position to drop the price.

The 360 economics are actually pretty good, and Microsoft has deeper pockets and would likely be able to last longer in a war of attrition. So, Sony had better be damn sure the addition of Blu-Ray will more than make up for the extra cost and time involved in launching the PS3.

It is also unclear what kind of online service Sony is going to have for the PS3. They poo-pooed online with the PS2, and ceded a 5-year headstart to Microsoft, which has been free to define what an online gaming service should be.

Sony is of course actively studying Xbox Live but there are some doubts as to how seriously it is taking online. Again, Sony might surprise with some incredibly deep and robust service that does everything Live can do and more, but there is plenty cause for concern that Sony's corporate hubris will bite them in the ass.

At this point, Xbox Live is the real killer app of the 360. For proof I just have to turn my head and see the Oriental Wife sitting there playing "Bejeweled 2". She was utterly uninterested in the original Xbox, but has taken like a fire ant to honey to Xbox Live Arcade. In short, Microsoft succeeded in turning the ultimate non-gamer into a addict.

That's because Live is simply so well-designed and so comprehensive that it really becomes a necessary part of the 360's package. Each game is Live-compatible and has "achievements" that are added to your profile as you progress through a game. You also accumulate gamer points, so you can see at a glance how experienced an opponent or friend is.

Some games have taken it to the next level, so to speak. "Project Gotham Racing 3", for instance, has Gotham TV where you can tune in to watch the highest-ranked players compete live. Apparently they also plan to hold big championship events that could draw tens of thousands of spectators.

You've also got a solid and growing library of downloadable content. You can not only download game demos to get a taste before buying the full thing, you can get old arcade classics (I've got "Joust" and "Robotron 2084", and "Pac-Man" and "Galaga" are going to be offered soon), and pick up expansion packs for games, too.

It's not perfect: Bethesda, the studio behind "Elder Scrolls: Oblivion", was the target of some recent criticism because an add-on they sold for $2.00 a pop was simply a set of armor for your horse. Nothing else, just horse armor. They've pledged that future expansions will give much more value for money.

Anyway, Live promises to really reshape how games are played, enjoyed, delivered, and profited from. Circling back to the discussion about Blu-Ray, one reason Microsoft didn't add a next-gen DVD player to the 360, apart from cost, is that Gates thinks downloads are the wave of the future. I'm skeptical of that in the near-term, but after seeing how easily Live works, it's not tough to imagine that scenario within a couple console generations.

Another wild card in this is Nintendo, which is planning its Revolution console for sometime this year. If there's one area where Sony is sure to kick Microsoft's ass, it's in Japan, where the 360 hasn't sold well at all. There are a lot of theories as to why this is, but the most prevalent reason is probably just that Microsoft hasn't found the right mix of games that appeal to Japan's, uh, unique tastes.

So, a few months ago, I would have said that Japan would be Sony's ace in the hole, the market it could always fall back on to offset any losses against Microsoft in the U.S. and Europe. And I'm sure that, no matter what, the PS3 will sell very well indeed in Japan.

But a funny thing happened on the way to the console wars -- Nintendo started innovating again. While their GameCube has more or less languished against the competition, Nintendo's DS handheld has been a smash hit and quite simply revived the company's fortunes. And they've done it with a collection of quirky, addicting games like a dog simulation, brain puzzlers, and cartoonish go-kart racer that lets you play anyone else via wi-fi. The DS has also benefitted immensly from a new redesign that transformed the slightly dorky hardware into an iPod-esque fashion statement.

Now there is buzz building about the Revolution. It has turned its back on next-gen conventional wisdom by foresaking hi-def, but uses an unusual TV remote-like controller that you wave like a wand to control on-screen action. If they can sprinkle some of the same pixie dust on the Revolution that they used on the DS, Nintendo will give the PS3 a serious run for the money.

So I don't think Sony can count on Japanese gamers automatically opening their wallets for them. Not only do they have to have the hardware, pricing and online capabilities to compete with the 360 in the West, they have to have the creativity and uniqueness to best Nintendo at home.

As they say, good luck with that.

One thing's for sure, we should know a lot more about what Sony has up its sleeve in about a month. They will certainly announce some stuff and show some of what PS3 can do at the E3 video game convention in Los Angeles.

I really do hope Sony comes out with a strong product. Competition is good. It Microsoft's burning desire to hand Sony its ass that caused them to birth the Xbox. Microsoft can get things right, but it needs to be scared, it needs to have a benchmark to beat. The PS2 provided that inspiration, so I fervently hope the PS3 gives them an equal incentive.

In the end, gamers win.