Is Social Media the X-Factor for Sony’s PS4?
Sony Corp.’s (NYSE:SNE) Playstation 4 officially went on sale Friday, armed with next-generation graphics and huge fanfare from gamers who braved the cold for a chance to be one of the first to get their hands on the console. But, as industry analysts have pointed out, the gaming landscape has significantly changed since the Playstation 3 was released seven years ago, as reported by The Wall Street Journal. With mobile gaming on smartphones and tablets is increasingly becoming the go-to mode for casual gamers, Sony is well aware that success with this generation has less to do with power and more to do with finding ways to bridge the gap between hardcore gamers and the general population.
It’s hard to believe that Sony is in the midst of a turnaround attempt, but the tech giant’s weak second quarter earnings have pushed the company to lower its sales outlooks for consumer products like TVs, personal computers, and cameras. Additionally, Sony’s video game division oversaw an operating loss of $8 million despite revenue increases of 5.1 percent year over year. Add in the fact that Sony is unlikely to see early profits on PS4 sales, even if it manages to sell five millions units by March like it hopes, and it becomes obvious that Sony is riding a fine line over the next several years.
Additionally, access to mainstream gamers may be tougher this time around. When the PS2 was released, consumers on the fence could use the DVD aspect to push them over; when the PS3 was released, Blu-ray became an incentive to take the plunge. With no such X-factor this time around, the PS4′s key to success may lie in its integration of social media and its existence as a living room entertainment hub — something Microsoft (NASDAQ:MSFT) is gunning for with the rival system Xbox One.
Facebook’s (NASDAQ:FB) interaction with the PS4 is one example of how social media may influence the newest console generation. Gamers are able to log in to their PS4 console using Facebook, where they can connect with Facebook friends online and even instantly share screenshots and videos during gameplay via the PS4′s new controller, according to AllFacebook. While that’s an interesting feature that could help players to avoid having to deal with annoying players online, it’s still not a huge leap forward into the social media age.
There’s also the potential for Sony to integrate its sizable content business with its hardware business. Could Sony perhaps offer its music or movie catalogs along with its Playstation Network online service? If implemented correctly, consumers would certainly be willing to pay a premium for the service, and it could end up being the X-factor that the PS4 so far lacks. But, as some analysts have pointed out, Sony may be worried about such a service cannibalizing the profits from of its content business, making it a zero-sum game.
But it’s still early, and now that so many changes can be made via software updates and online platforms, Sony has some time to let gamers enjoy next-generation graphics while they work out what the PS4 will ultimately mean for the living room.
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