Anyone who has been following Sony for the last decade or three should understand why that is a pretty bold statement. With a strong Yen, a disastrous earthquake, and two years of losses measured in billions, Sony cannot afford to make anymore mistakes. Bear with me while I re-hash some of their biggest ones in no particular order, and explain why using Vita OS for smartphones and tablets might just be the dumbest.
Sony, a once great company.
Sony botched manufacturing TVs? Isn’t that what they do? Well, they won’t stop selling TVs, but their margins certainly aren’t getting any bigger now that they were forced to sell their half of the joint S-LCD venture to Samsung. At the end of the day, this deal actually cost Sony nearly a billion dollars on the balance sheet.
Ever since they debuted the Audio CD in 76’ Sony has seemed to think they will be the progenitor of every major media format. Unfortunately for Sony, they haven’t been able to shake this delusion no matter how many times they fail. Betamax, DAT, Mini-Disc, ATRAC, UMD, Memory Stick, and before long the PSVita Memory card. Not one of these formats won a war, and some of them didn’t even have a direct opponent.
Sony is the victim of one of the most prolific and embarrassing customer information thefts to date. Everyone and their mother heard about it, and every PSN user felt the hurt. Not only did the gaming network go down for much too long, but Sony ended up giving away free ID theft protection to PSN users because that’s all they could do to protect them. Every gamer and electronics consumer out there now has a very good reason to question the security and stability of Sony products. No company needs that reputation, Sony may have needed it the least.
The PS3 and its Blu-ray ball and chain.
Putting Blu-ray drives in the PS3 was a costly bet for Sony. Losses were estimated at $300+ per console at launch. Yes, Sony LOST $300 on each original PS3. Just to cover the launch costs of the PS3, Sony took out a loan of over a billion US dollars. Game consoles are historically loss leaders, but $300 per console was unheard of before the PS3, and will probably never been seen again. Considering the financial trouble Sony was having at the time, they put a lot on the line in an attempt to win the HD format war. At this point we know HD-DVD lost, but can it be said Blu-ray won the war when it still fails to outsell DVDs? VHS took its time being phased out and DVDs seem to be just as stubborn. At this rate Blu-ray will be lucky to reign king for half a decade before being replaced by pure digital alternatives.
Although the PS3 eventually clawed its way up to good sales numbers, it’s likely that the combination of launching later than its competitors and at such a high price point hindered the console’s overall profit margins permanently. And of course, both those problems can be blamed on the integrated Blu-ray drive. The PS3 is a second console for many hardcore gamers, and everyone else bought it to play the Blu-rays they didn’t buy. When you combine that with the ability count the number of desirable exclusive games one hand, it’s doesn’t spell success. Sony used to be king, and now they’re fighting to hold spot number three, in a three horse race.
Playstation Vita
What a mess. Just like with the PS3, Sony is banking on their die hard fan base. They just watched their biggest competitor in the mobile gaming space, Nintendo, drop their next flagship model which is based entirely around the industries biggest buzzword from $250 to $170 because it just wasn’t selling. The Vita has zero backwards compatibility because Sony can’t include their bulky UMD drive in a modern portable console, Nintendo doesn’t have that problem. The PS Vita has zero storage included, even though it needs a memory card to function as a game console, its primary purpose.
Nintendo includes a 2GB card that fits into a slot made for the most ubiquitous and cheapest memory card available, MicroSD. Sony decides that they should launch at $250, but it’s not really $250 because customers need to spend at least another $20 on yet another proprietary Sony memory card for game saves. The $20 4GB card will likely run out of space fast for those who choose to download their games. In a few months Sony will have to drop the price and bundle a card with the Vita, but it still won’t play UMDs.
Vita OS, don’t even think about it.
You might have heard the rumor already, Sony built the Vita OS with the ability, though not necessarily the intention, to expand it as a potential platform for smartphones and tablets.
There is absolutely no room left in the mobile OS game. Android is the new market share king. It’s not going anywhere, Google will make sure of that. Hot on its heals is iOS, the first true smartphone platform. Apple has more money than you can shake a stick at, don’t even think Sony can try to compete with them. Windows Phone came late to the game, but Microsoft can’t afford to be a spectator in the future of computing. Don’t expect them to just roll over and accept a 5% market share.
Palm, the company that paved the way for smart phones, designed a very functional and powerful OS. And they’re gone now. Nokia, one of the largest cell phone makers in the world just turned their back on their own in house OS. RIM’s BBX, QNX, BB10, or whatever the hell name they didn’t get caught stealing, will be lucky to ever see a piece of hardware. And if it does, that just means RIM will end up with more debt after their new flagship ends up DOA.
The smartest thing Sony did in recent years was put Android on their smart phones. If Sony reverses course and tries to play the OS game now, it’s going to end in tears. Every new mobile OS faces a very dangerous Chicken and Egg challenge. Without market share it’s hard to attract app developers, without apps it’s hard to gain market share. Sony has neither the Chicken nor the Egg. If they want to sell any phones at all, they’re going to need to run Android or Windows Phone.
Nobody is buying a Vita instead of a smartphone.
Sony is already in the portable gaming business. With the cost of entry at $200 or more for a portable console, casual gamers are going to stick to their already expensive cell phones. Sony is the only hardware company who makes both portable game consoles and cell phones. Cell phones just so happen to be the future of casual gaming. If Sony can build a hardware and game delivery platform that picks up the gamers that Vita leaves behind, they might just have a future. Sony knows this, phones like the Xperia Play are proof that they see the importance of this market.
If Sony decides to put the future of their mobile business on the shoulders of a fledgling new OS, it may be their last great mistake.
