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Sony keeps battle simple with Xbox
Sony's PlayStation 3 (PS3) games console has overtaken rival Microsoft's Xbox 360 machine in Europe, despite the Xbox's having a 16-month lead in the region and a much lower price, according to Kaz Hirai, head of Sony's computer games division.
- By Maija Palmer, Financial Times
- Published: 23:56 May 9, 2008
- Globally, Sony has sold 10.5 million PlayStation 3 consoles to date, compared with 18 million Xbox 360 consoles and 24.45 million Wiis.
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Sony's PlayStation 3 (PS3) games console has overtaken rival Microsoft's Xbox 360 machine in Europe, despite the Xbox's having a 16-month lead in the region and a much lower price, according to Kaz Hirai, head of Sony's computer games division.
Sony says it now has an installed base of more than 5 million machines in Europe, putting it a whisker ahead of Microsoft. Both consoles, however, still trail by some distance Nintendo's Wii console, which sold about 6 million units in Europe last year.
Globally, Sony has sold 10.5 million PlayStation 3 consoles to date, compared with 18 million Xbox 360 consoles and 24.45 million Wiis.
Analysts confirm they have seen a strengthening trend for the Sony console in Europe since the start of the year.
"The weekly sales figures suggest that the PS3 is outselling the Xbox 360 by as much as 15 to 20 per cent in Europe during the past couple of months," said Nick Gibson, an independent games analyst.
Nevertheless, Hirai told the Financial Times he would not rule out cutting the price of the PS3 as fierce competition in the market continued.
"We will look at price again in due course. Price crosses my mind often," he said.
Cheapest rates
The cheapest PlayStation 3 console sells in the UK for £299 ($584), compared with £159 for the Xbox 360 and about £180 for the Wii.
However, Hirai was keen to stress that price was not the only battleground; another key issue was ensuring that more big-selling games were developed for the PS3.
Top-selling titles can have a huge influence on hardware sales. When the long-awaited Grand Theft Auto IV was launched in the UK last week, sales of PS3 consoles increased 127 per cent, according to Chart Track, the research company.
The PlayStation 3 has been criticised for being too complicated, and many games companies have had to delay the launch of games for the machine as they came to grips with the technology.
Hirai admitted the company had not helped games developers enough initially. "More could have been done to engage games companies to ensure they developed games for the PS3," he said.
Since last autumn, Sony has halved the price that it charges companies to buy its development tools, and created "swat teams" of engineers who can fly out to development studios when they need help.
Hirai also said he would be more aggressive in signing deals to co-market games with developers. There would not, however, be any significant increase in marketing spend overall, he said.
Hirai is under pressure to keep marketing costs under control - and to resist too many price cuts - to make the division more profitable. It only returned to operating profitability in the three months to the end of December after racking up huge losses in 2006 and most of 2007.
A further update on progress will come next week, when Sony reports results for 2007.
Games line-up
Hirai is in Europe this week to promote a line-up of games that will launch later this year, including sequels to best-selling titles such as Resistance, a war game, and MotorStorm, an off-road racing title. Highlighting these games is part of trying to reposition the PS3 as a console for dedicated gamers.
Because the machine is equipped with many other functions, including a player for high definition Blu-ray DVDs, it was initially marketed as an all-purpose media device. This, Hirai, admits, was a mistake. "We focused too much on other aspects of the PS3 and there was confusion over what the machine was.
"I scaled everything back and have been repositioning the PS3 first and foremost as a video games console."
Refocusing on gamers has involved some sacrifices, including delaying the launch of Home, the virtual internet world for PlayStation 3 players.
It was initially due to be launched last year but is now unlikely to be available before the end of 2008 as Sony makes the site more appealing for dedicated gamers.
Hirai would eventually like the PS3 to be used as a multi-media hub in homes, used for internet access, television viewing, photos and other functions.
However, for now, he wants to make sure he can attract the core gaming audience. Games are first priority but other possibilities beckon Kaz Hirai, head of Sony's computer games division, wants to make clear that the PlayStation3 is "first and foremost a games console". But he is continuing to push for deals that will allow consumers to watch TV and films through the machine.
Sky deal
Last month the company announced a deal with Sky, the satellite TV company, that allows UK users to download Sky films and TV content to their handheld PlayStation Portable units.
Sony said it expected the the deal to be extended to the PS3, possibly later this year. Sony is also in talks with other media companies in Europe to sign similar deals across the region.
The company is under pressure to keep up with competitors Microsoft and Nintendo, which have signed similar media deals for their consoles. Microsoft announced in January it had teamed up with BT, the UK telecoms operator, to allow XBox owners to view BT Vision television services through their consoles.
Last month, Nintendo teamed up with the BBC to allow the Wii console to be used as a set-top box for viewing the iPlayer catch-up TV services.
Offering TV services is seen as a way to boost console sales by broadening their appeal to more than just core gamers. These could become standard features in future.
"This is an inevitable evolution of these machines. In the future you will expect to get TV services, internet access, messaging, social networking and other services on your machine as well as games," said Tony Cripps, analyst at Ovum.
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