Even though the Dreamcast has been a success since it's launch, the PlayStation2 is forecast to blow by it in short order, but the road won't be easy. If the PlayStation2 is going to be the new market leader, and if it's going to come anywhere near the wild predictions of analysts like Merrill Lynch, it will have to overcome the following seven obstacles.
The Seven Deadly PS2 Pitfalls
- It's going to cost too darn much:
- Consumers are going to be confused about what it is:
- It's too difficult to develop for:
- Settop boxes just don't work in the US:
- Shovelware at Launch:
- It doesn't look like a game machine:
- The competition is too hungry:
The biggest obstacle that the PlayStation2 must overcome is its initial purchase price. In the past, game companies have been able to sell consoles to early adopters around the $249-$299 price point in North America, but it wasn't until the consoles dropped to around $150 that they began selling in massive numbers. The PlayStation2 is an expensive machine to build, and Sony won't be able to launch it at a mass consumer price without worrying about price-dumping charges or losing millions of dollars right off the bat.
Sony must find a way to quickly drop the price of their system, or else they could price themselves right out of the mass market. Currently Sony is building factories to mass-produce its Emotion Engine chips, and this (along with dropping RAM costs) should make the price fall. The only question is: will it fall fast enough?
As gamers, we know that the PlayStation2 is a gaming platform, but the mass market will be confused about what the actual purpose of the system is. Is it a gaming machine, is it a DVD player or is it an Internet device? If the buying public isn't sure about what it is, or, more importantly, they get the feeling that it's a mediocre technology compromise, they'll steer clear.
Sony has the advantage that it has more than one hundred developers and publishers who are eager to inform the buying public that this is indeed a gaming machine. We'll see whether or not they'll succeed.
Sure, every developer worth its salt (or not otherwise detained by partnerships) is working on a PlayStation game, but the system is not the easiest to develop for. Unlike the Dreamcast, where developers can blandly port a PC game to the console with less effort than opening a jar of peanut butter, the PlayStation2 requires ground-up development.
The console will also require developers to hire large teams to create games that take full advantage of the PS2's power. This means that the entry cost for making a good game just went through the roof. Many fear that this will stratify developers into the haves and the have-nots. They're also afraid that the high cost of development will prevent companies from experimenting with new game types and instead stick to tried-and-true, watered-down game design.
The truth is developers are beginning to see feature-filmlike profits for their games, so more companies are willing to make the big initial development. Also, note that many top selling PlayStation games have been unique titles (Parappa the Rapper, Tony Hawk). Smart developers will continue to innovate when they see returns like this.
The US audience has never bought into the settop box as a concept. Who needs a settop box when they already own an Internet-connected PC? The personal computer has established itself so deeply in the North American mindset that people see little or no need for a TV-based Internet System.
In Japan, the settop box concept could work very well, but in that country, PC penetration is almost not worth noting. Making the sale to US and European audiences will be a tough sale, but if Sony plays up the DVD capabilities and the gaming of the console, they will be able to overcome the settop stigma.
When it was announced that more than 250 PlayStation2 titles are in the works, we basically heard two responses. The first was "yeah, more games," and the second was "how many of those games are going to be any good?" No console has launched with this much developer support, and the PlayStation2 could suffer if its good launch titles are overshadowed by a wave of substandard games.
Sony holds the key to overcoming this problem. If the company holds extra-tight quality restrictions during the first year of launch, they will be able to skip past the majority of shovelware problems until the console is firmly on its feet.
Are non-gamers going to see the sleek, futuristic design of the PlayStation2 and immediately associate it with the toy their kids want for Christmas? Sony has done a tremendous job designing the PlayStation2, but it risks alienating the parents who want to pick a cute, safe game machine for their young children.
For gamers this shouldn't matter much, but it could hurt Sony's mass-market aspirations. However, we're willing to bet that the entire next wave of consoles will look more like the PlayStation2 than the kiddy friendly Nintendo 64.
Sega and Nintendo aren't dead. In fact, both of them are intent on returning to their old market dominance. Both companies have been weakened in recent years, but both have plans for one-upping the PlayStation2. Add Microsoft and its mysterious X-Box, and you have a pretty serious competitive environment.
The videogame market lead is Sony's to lose right now. The competition, while strong, is playing catch-up right now and unless Sony makes a serious misstep or falls because of one of the aforementioned pitfalls, the other guys won't matter all that much.
