Game Theory

There's been some interesting things being said about Sony and its inability to get things right with the PS3.

Pros

• Its an impressive, if flawed piece of engineering. It has been said that the PS3 platform is designed to last up to ten years. However, Sony's hand may be forced to refresh much faster by the deeper pockets of rival Microsoft

• It is a great platform to seed Blu Ray into the marketplace

• Disaffected customers have been purchasing PS2s and PSP devices - which demonstrates strong brand loyalty, rather than a total rout by rival console makers

• Sony's ability to run Linux and powerful silicon may open new markets and partners beyond its existing eco-system

• Sony can't afford to fail, as Bill Gates said during the 1997 turnaround of Apple; a near-death experience can be a great motivator
  

Cons

• The PS3 has underperformed in the marketplace, Nintendo and Microsoft are hitting target numbers

• Sony's engineers have built the most expensive games console ever and the company stands to lose between 200 - 300+ USD on each box

• Sony has been outinnovated by Nintendo with the Nunchuk, providing consumers with a new way of interacting with games. In a war of polygons versus playability - playability wins

• Sony game development is too expensive: the graphics elements of a PS3 game costs 8.6 million USD to develop, and 500,000 units are need to be sold in order to be profitable. This is roughly twice the price as a Nintendo game

• Sony has ventured into Uncanny Valley with its latest graphics engine. (The dip in postive consumer attitude as the character better mimics human life is the Uncanny Valley.) There is a paradox of realism - after a certain point, the closer to reality that the gaming experience gets in terms of graphics and player experience; the harder it is for the game to seem real. This inability to believe makes it harder for the players to fully engage in the game.
  

Impact

Sony is going to live or die by its software, out of all the consoles Sony's is the most expensive to develop for and has the smallest user base. This is likely to be the case for the next 12 months at least. From a games developers point of view the chance of break even let alone success is least with the PS3 and probably greatest with the Nintendo Wii.

Couple these business factors with Sony's distain for its developer community and you may see an exodus of developers to Nintendo.

Sony's failure will be a breach of trust with large developers and will adversely affect an entire games industry eco-system. Electronic Arts is already taking corrective action; developers run a risk in the rush to get on the Nintendo train that quality slips as they try to get into the Wii market faster with mediocre products that will sit on the shelves.

The less games that sell on the PS3, the greater the loss that Sony suffers on each box. The more fanciful have speculated that massive hardware sales and low games sales could bury Sony. Its sophisticated engineering could be the biggest waste of smarts since the Maginot Line.

Blackberry is Bond-approved

Sony Ericsson must be steaming, after going to the trouble of doing their product placements for the new Bond film, BlackBerry ended up stealing the ultimate endorsement from Daniel Craig according to The Metro (November 21, 2006) - The Green Room column by Neil Sean.

Daniel Craig may earn his millions but he still enjoys freebies. The blond Bond caused a fuss at the Casino Royale premiere because only his goodie bag was missing a Blackberry phone.

Why didn't Sony Ericsson have its products in the goodie bag instead?

There's one born every minute

Someone bid 9,000 USD for a Sony PlayStation 3.

Play corrupts and game play corrupts totally

Earlier this week, the legal actions of Sony Computer Entertainment Europe (SCEE) apparently forced Lik-Sang.com to shut down. There has been soul searching in some quarters about Sony's conduct, particularly with regards the number of senior executives how had bought grey-market devices for 'investigative purposes' allegedly.

Rather than have people rattling around online, I thought that I would suggest some practical ways to respond in a responsible manner and explain to SCEE that they didn't appreciate the company's conduct.

I started by revisting a post I had written over two years ago for the AlwaysOn Network following articles I had read about Wal-Mart. It has some good rules of engagement in italics:

- Stop bellyaching saying how terrible they are. If you have money you have a choice; use it. If you have a fair bit of money you also have a voice; use it.

- Don't be abusive to company staff. These are people who are trying to get by; the last thing they need is some stuck-up righteous person going off at them. Be polite and courteous at all times - even to senior management.

- Consumers - don't buy the company's products and services. If you don't buy, they will go away or change to behave in a 'more acceptable' manner. Its the laws of supply and demand, you cut off their supply of money, they'll be more ameniable to respond to your suggestions for improvement.

- Do talk to your friends and peers about the benefits of rival ways of shopping. For a listed retail company, there is nothing more terrifying than a decreasing amount of money going through the tills.

There is nothing more powerful according to some of the world's leading marketers like Richard Edelman than word-of-mouth marketing. That's the reason why even mobile phones have blogs nowadays.

If you have bought a Wii and or your XBox360 tell everyone how good it is. If you are in Currys or Comet and someone is looking at the PS3 or a PSP, tell them how rocking your Wii, DS or video iPod is. If a Wii or XBox360 demo kiosk has fallen over , get a member of staff to reset it. Mac users have been doing this for years, its known in the industry as evangelisation.

- Focus on one message, there seems to be a myriad of issues that people have with Wal-Mart, however like advertising if you repeat just one message enough times it is more likely to get through to the public psyche and the board of the company. When they have listened to that focus on the next one.

In this case, I'd recommend expressing displeasure at the company's 'regional apartheid' against European gamers. It's a phrase that is loaded with imagery and emotion and makes a great media soundbite.

- Think about your message, phrase it in terms of the benefit to the audience. For instance, a politician who voices an opposition to the company may benefit from more votes and individual campaign contributions. Basic Dale Carnegie stuff but very true.

- Hound special interest groups like 'Greenpeace' and 'Friends of the Earth' telling them to readjust their priorities, you'll need to be polite and very persistent because they usually have pretty thick skins since they give it out so much.

Greenpeace is very interested in electronic waste at the moment., here is a link to their report on Sony. I found it particularly interesting that I couldn't find any information from SCEE on their website about their environmental record or what they are doing to limit e-waste. Why not send an email to Greenpeace and ask them to take action?

- Learn from the way political campaigns have co-opted the web and get active using meet-up.com, web blogs etc

- Write, email, call the company's share register, their auditors, their PR agency and their bank of record. Be polite, courteous, persistent and humourous (if you can be) to deliver your message and do it often.

• SCEE Email addresses are usually of the form: firstname_lastname@scee.net
• There is a feedback page here.
• The company press office email address

- Don't deviate from non-violent action. It's not cool and its not clever, it is counter-productive to your argument. Over here in the UK, the anti-vivisectionist movement have lost a lot of public goodwill by using violence and intimidation

- Vitriol is not clever, stick to the facts. To an outside audience your vitriol will lack credibility. That is why some of the empassioned anti-Bush protests have little effect (ya' feelin me Howard Dean?).

- Do not violate the company's intellectual property including trade marks. That funny piece of satire that you put up as a website, wont be seen by too many people because your web host provider or ISP will take it down if they get a letter from the company's lawyers.

There is nothing more frustrating to a company than not being able to do anything about its reputation, SCEE is especially vulnerable at the present time as it is in the midst of changing UK PR agencies. The company will struggle to respond to sustained criticism where it cannot bring legal pressure to bear.

- Suppliers - if the company knocks on your door wanting you to supply them. Send them on instead to the competitor you most want to see ran out of business.

- If you want to put your money where you're mouth is, make sure the company's stock isn't in your 401K

- Write to your mutual fund manager, write to your politicians

- Write to your local newspaper.

Post on the forums that you read, put a link to this posting for any people that are interested.

- Don't give up, its only by repetition and determination that campaigns suceed

Next Generation Media Format War will be won in 2 places (& they're not Japan or Silicon Valley)

Hollywood only has delusions of grandeur, it won't be the majordomo in the next-generation media format wars, neither will Microsoft or any of the Japan-headquartered consumer electronics companies.

The battle of disc versus disc will be won in the San Fernando valley and the rogue disc factories of China (and elsewhere) who will crank out pirate copies. However if you read coverage from the CES industry show happening in Las Vegas, you wouldn't pick up on this.

AVN, the US adult industry's news website has been debating the benefits of the different formats for quite some time. Reading the articles shows that the San Fernando valley based industry has been thinking HD for quite some time.

Don't believe me, then have a look at the history of VHS versus Betamax, or for a more modern phenomena see the rise of paid-for content on the net, how many porn-stars and glamour models feature on print advertisements for moble phone wallpapers?

Key factors for consideration include:

• The cost of duplication: one of the reasons why porn voted VHS according to industry veteran Al Bloom, discussing the price difference between blank Betamax tapes and VHS with AVN "Sony didn’t quite understand that if they sold their tape to the adult duplicators at a cheaper price that the format would have probably survived because the technology was better. They didn’t understand that people were buying these things to watch porno." These economics are also important for the pirate plants that will fuel the sale of hardware in developing markets.
  
• Backward compatibility: Bruce Mendelson of Legend Video sees the next generaton disks as an "extension of the existing formats" rather than a whole new products. Consumers will have a similar view and look to be able to play their existing library of DVDs.
• Compelling reason to purchase: Bloom "I don’t think the technological shift is nearly as great this time around. Back in the ancient 8mm days people were used to silent seven-minute reels, usually black and white, though there was some color reels out there. Then with videotape you could get a full hour with sound and color." The lack of a compelling reason to purchase is a potential stumbling block for both formats.

Another company which may suffer at the hands of the adult industry is Apple, despite having pushed HD video and having some of the best editing and post production tools on the market, it was Windows Media version 9's format the the first HD adult film was distributed in last year.

Sony gets guerrilla marketing very, very wrong

PSP "street art" campaign in San Pedro
Originally uploaded by Life on the Edge.

Sony Computer Entertainment apparently did a stencilling campaign around Los Angeles (although they're not owning up to it). And its starting to get some serious consumer backlash.

Where they went wrong:

• The artwork. The characters look more like they are about to have an epileptic fit than enjoy playing with a PSP. It isn't clever, it isn't humourous, its not particularly subversive. It looks cheap and lacks quality.
• The implementation: it seems to be be blanket in its coverage, SonyBMG's experience having an an anti-social behaviour order brought against it for similar poster campaign carpet bombing shows that the organisation does not share internal best practice
• The message: What is this campaign trying to say? It's not cool, its not down with the kids (as the tag on the stencil opposite shows)

It looks like Sony Computer Entertainment and or their agencies could do with paying more attention to the Word of Mouth Marketing Association...

Kudos to !Habit Forming and Popgadget.