COME PLAY IN MY SANDBOX
Yahoo! wireless evangelist Russell Beattie's enthusiasm for Sony's handheld game and video player, the Playstation Portable, aka PSP, is infectious. Following his posts for a while, it was this over-the top review by Brandon Watson, pushed me off the sidelines to pick one up at the local Circuit City.
It's sitting unopened in the closet while I wait for the one upcoming game I want to play on it, Coded Arms, something Russell has also been enthused about. As I've mentioned before, my issue isn't my passion for this stuff, it's finding the right balance between playing these games and doing everything else I like to do as well.
Reading his most recent post on the PSP today, it struck me as an interesting hypothetical case of what a company that we admire, could do if they put their mind to it. My last "hypothetical case" was on an Amazon.com blogging service a few days ago.
Anyway, Russell makes a logical case in a post titled "The PSP Platform", for why the gadget, with a little strategic and adroit execution (my words) by Sony, could potentially head Apple off at the pass on the road to claiming video and "vcasting", as they've done audio and podcasting to date. I agree with Om Malik that Sony's relatively expensive and proprietary memory stick storage is a potential issue, but that too can be tweaked as part of the corporate strategy (holding my breath).
All things are possible, and the most important thing here is Sony's will to do any of it. Almost a decade ago, in my role as an Internet analyst, I often made the case for Sony releasing a "Webman" in my presentations around the world (including relevant spots in Tokyo).
The hypothetical idea back then was that it would be the natural evolution of Sony's vaunted "Walkman" franchise into a digital world, as the then nascent Internet evolved into a broadband future.
Of course Steve Jobs had some other ideas, and the rest is history.
Russell makes a valid point that the PSP is potentially a second shot opportunity for Sony to address a missed opportunity. It would take a fair bit of hustle, but it could be done. This whole thing is so very, very early but Sony also has a lot on its plate. But Apple is definitely thinking these thoughts too. Perhaps Sir Howard is thinking harder.
But none of the things that Russell is suggesting are particularly hard, technically or otherwise. The core issue, remains the verticalization that most traditional consumer electronics, media, telecommunication and wireless companies have adopted as a core trait over the last few decades. I touched on this in a post back in March:
The next ten years of the Internet is going to be unlike the last ten...where each new application and content service will have to painfully slowly bore through the walled gardens of multiple vertical industry silos to reach the consumer. Whereas the last ten years, due to the wonderfully horizontal nature of the PC hardware and software industries, seeing companies launching new applications or content service was like watching dolphins race each other across the waters.
Generally, the forces of technology, along with eventual consumer demand, win out with the verticalized industries becoming more horizontal. However, the cost in terms of time, fewer start ups, lost opportunities and jobs, and national wealth creation is painful to contemplate. And these verticalized silos are not just across industries, but also in terms of legal and regulatory silos (FCC etc.) within and across countries and different types of intellectual property.
The silver lining to all this might be that while these vertical industries (cable, telcos, wireless carriers, traditional media, etc.) are playing a defensive game as long as they can, hoping that their customers get "used to" paying high prices, they are creating a high pricing umbrella for newly emerging horizontally oriented startups that are exploiting emerging technologies and standards as soon as they can be nailed down.
In my view the inevitable result of these technological and content creator forces will be the decreasing verticalization of the media industry, and the increasing creation of horizontal layers that allow each layer to do its thing best.
We saw how the forces that drove the horizontal PC industry into record global user adoption, followed by a similar trend in the narrow-band Internet.
This next drove the on-going defensive consolidation in the phone and wireless industries, which will be followed by the steps outlined above. Verticalized companies will go through the stages of going from defensive to offensive, with Sony's recent management moves being the most recent example.
Sony is particularly conflicted with the PSP. While they may have sold over 4.5 million units of the new Sony PSP CD disks (aka UMDs), as Russell points out, initially most of the titles came from the Sony movie catalog. Given the early signs of success of the platform, other movie studios are slowly making their content available in UMD format, but holdouts remain like Time Warner. In general, a rival content provider has to balance their support for the next, great content distribution platform with supporting a content rival.
If they had their druthers, they'd rather partner with an Apple, who has no content ax to grind, or even prefer to do nothing and wait, than support a verticalized rival. It's an open secret that Apple is on the cusp of announcing a video iPod soon.
While 4.5 million UMD movie titles sold may seem particularly remarkable at first glance, consider the following. With over 5 million PSPs sold, and with a fairly narrow range of games and other content to play on it, it's not surprising that people may pick up a movie or two as an experiment, and as something to do with their shiny, new toy.
I know I picked up a UMD movie with my PSP, just for that reason, even though I'd seen it already. It was just something to test the screen and the device out with.
We need to wait for the more normalized numbers after the PSP is launched in Europe, and once the novelty of the PSP wears off, to make a better judgment.
In particular, it remains to be seen how content providers evolve their strategies vis a vis the PSP once one or more neutral alternatives appear, Apple or otherwise.
These decisions are all about the economics and business strategy, and very little to do with technology. It's when the calculus makes sense for all parties involved and on the sidelines, that magic starts to happen.
In my opinion Sony is too concerned with protecting the PSP from its fanatical users to continue innovation. http://www.engadget.com/search/?q=PSP&submit=Search+%BB
One would think that Sony would 1) embrace those that are most passionate about their products 2) see the forest for the trees and add the capacity needed to make the PSP a GREAT video device.
Personally, I gave up on Sony a long time ago. I think it was after I bought a mini-disc recorder... I realized that I could digitally transfer music TO a disc, but to pull music FROM a disc I had to record in real time to my computer! Why? Because even in 2001 Sony was afraid of someone pirating music on their label. I think Sony Electronics needs to completely forget about Sony Movies and Sony Music. We'd all be happier people that way.
Posted by: Scott Ramsey | Tuesday, July 26, 2005 at 02:17 PM