Bumper results for Sony, but will it turn around PS3?

26 10 2007

Sony has rebounded from its earlier lacklustre performance to post second quarter profits of ¥73.7 billion ($641 million), fuelled by strong gains in its movie and consumer electronics units.

But what of prospects for its next gen games console, the PlayStation 3?

So far, just 5.6 million units sold worldwide, with the company likely to miss its current financial year target of 11 million units. Plus the double whammy of outperformance by Nintendo’s Wii and just a handful of games titles published. Revenues in Sony’s games division were up 43% at $2.12 billion, however, losses doubled to $841 million.

It’s widely documented that Sony loses money on every console shipped, so even with the $100 price cut for the U.S. version and a lower-priced entry level model for European prospects, all hinges on must-have games being released by the major publishers.

Sony is also getting its ducks in a row when it comes to attracting consumers beyond the hardcore gamers it knows will snap up the consoles, with or without hitting sweeter price points. A new version of the device which morphs the PS3 into a broader home entertainment proposition, combining a TV receiver and DVR, goes on sale in Europe early next year. The company is also ramping up investment in Home, its virtual world which adds everything from community features, through to opportunities for upselling its other entertainment franchises; due to emerge from its beta chrysalis during 2008.

While attractive pricing is an obvious weakness of the PS3, Nintendo’s gamble of producing a lower-specification console which retails for a significantly lower cost has proved astute. Critically, the Wii has cut through to the women’s market, not the traditional preserve of hardcore gamers.

Evidence is emerging that PS3 may be starting to buck the downward trend, with the latest sales figures for European markets showing stronger sales than Xbox 360. There remains, however, a huge gap to close on the best selling Wii.

As disappointing as PS3 sales have proved to date – and in spite of CFO Nobuyuki Oneda’s confirmation that the year one sales target is unlikely to be met – The Street obviously believes overall group performance to be in rude health, with company shares closing up 6% on the day.





TV nets face up to growing online competition

25 09 2007

Variety reports on the latest online video forecasts produced by market analysts Screen Digest: the U.K. market for online TV will be worth £181 million (US $362 million) by 2011, but growth of the online movies segment is predicted to be slower.

There’s no doubting that across the Pond, the competitive environment is really gaining traction, as observed by the Financial Times: in the two years since that watershed moment when iTunes first started offering download-to-own TV shows from Disney, all of the major networks have scrambled to not only beef up their own sites, but also to broker those all-important third party syndication deals.

In the last week alone, Walt Disney-owned ABC has agreed a deal to syndicate its shows, for free, via AOL. The net joins CBS, which has been aggressively pursuing its own syndication strategy for the past few months, while Hulu.com, the online video aggregator site JV between NBC Universal and NewsCorp. is due to bow next month.

Hopping back over the Pond to the U.K., the BBC, ITV, Channel Four and five all have online catch-up TV services: the BBC offers the broadest range and volume of hours, while ITV and Channel Four are increasingly bolstering their catch-up offers with back catalogue shows. Satellite broadcaster BSkyB is broadening its Anytime service, with different flavours of the catch-up service available both via broadband and Sky+ DVRs; the company’s recent pact with Sony will also see an extension of the service for Playstation PSPs.

The Screen Digest research referenced at the top of this post acknowledges that established players such as TV networks also face competition from non-traditional market entrants, such as Joost and iTunes. Significantly, it may be players such as Apple and Microsoft, which stand to gain the most if they can finesse their strategies to leverage consumer relationships through ownership of devices, such as iPods, or the world’s most uniquitous operating system.

Four predictions of my own:

  1. The last year or so has merely been about positioning and trying to establish which online video offers work, and which don’t. Note CBS is moving beyond merely offering full-length TV shows online and gradually ramping up 2.0 functionality: conversational content. 2008 will see the space grow up considerably. 
  2. Whether it’s aggregators or TV networks’ own sites, online video offers are principally restricted to ‘walled gardens’ of content, usually from the operating network or a select few content partners. This is wholly alien to the TV viewing experience: consumers don’t watch shows from a single network or producer. The walled garden approach smacks of protectionism and, over the fuller term, it won’t last for all but the smallest handful of players. The creation of Hulu.com is the first acknowledgement by two major players that hybrid partnerships such as thes, which broaden out the available content offer, are the way to go. YouTube is further evidence of a successful broad-brush aggregation model – albeit with some copyright complications.
  3. The market is already overcrowded: come further shocks to the world’s stock markets (an inevitability), watch the venture capital evaporate. Incumbent players looking to second or third round financing, against a backdrop of unproven business models (let alone profit) will shutter or consolidate. Viacom had better be hoping that it can pick up the assets of Joost for a song.
  4. Apple TV and Microsoft Media Center are the first two examples of mainstream PC/TV convergence: but neither has yet created a compelling enough content offer nor low enough price points to give the products a reasonable run at setting the market alight, beyond early adopters. Next gen games consoles from Sony and Microsoft will up the ante by gradually bolstering their IP-delivered VOD offers, but even these may struggle to break through beyond gaming loyalists. Either some boffin will come up with the cheapest and most elegant plug-and-play convergence-enabler – witness what Freeview set-tops did for the U.K. market – or new product categories, such as networked DVD player / recorders or DVRs will hit that magic tipping point of attractive pricing and mainline retail distribution.




Sony to launch video Walkman

31 08 2007

sonynvideowalkman.jpg

Having originally misjudged the market for mp3 players and hoping to recapture some of the original magic (not to mention ubiquity) of the audio cassette Walkman, Sony yesterday unveiled its new series of portable media players, capable of playing video, as well as audio content, reports Reuters.

The consumer electronics to TV and movie production conglomerate has big plans for the new Walkman series, aiming to capture a 10% market share within two years of the devices going on sale in both Europe and the U.S. next month. Prices will range from €99 (US $134) to 249 ($336) for basic to high-end models.

Significantly, the devices will run Windows Media codecs.

Sony faces competition from Apple’s market dominance, with around 72% share, yet the notoriously-secretive latter has thus far refused to break out sales of video playback-enabled iPods from overall sales, suggesting they may either be slower than anticipated or a category struggling to establish itself.

This appearsto be confirmed by one of the highlighted findings from market intelligence firm In-Stat’s report on Big Trends Influencing the Global Handset Market 2007-2012, published last week: just 11% of consumers surveyed said they would specifically purchase a portable media player based on its ability to offer video playback.

However, combined with Sony’s earlier announcements: its PSP portability JV with U.K. satellite platform Sky and a DVR, DTT-receiver-enabled PS3, things are cooking up for the company.





Sony / Sky JV brings go-anywhere TV to the PSP

23 08 2007

Following news added yesterday that the European version of the PlayStation 3 is to get inbuilt TV receiver and DVR functions… 

Sony Computer Entertainment Europe (SCEE) and BSkyB have revealed further details of their joint-venture entertainment service for Playstation PSPs, first announced late last month.

Launching early next year, the Go! video download service will allow 2.3 million PSP owners in the U.K. and Ireland to watch Sky content on the move, reports the Financial Times. A collaboration with telco BT will also allow PSP users to make voice and video calls via their devices, as well as the ability to send and receive instant messages.

For the entertainment service, customers will be able to pick and choose from individual programmess offered by Sky, or subscribe to content packages like sports, entertainment, or animation, adds Wired.





Sony, Matsushita launch VOD service; bridges computer/TV divide

8 08 2007

Variety reports on yesterday’s announcement by Sony Corp and Matsushita Electric Industrial Co. Ltd. that they are to begin offering 2,000 VOD titles via their joint venture TV Portal Service, which can be accessed by internet-connected flat-screen TVs.

While the expansion of the service, initially launched in 2006 by a consortium of six Japanese consumer electronics manufacturers, consumers will be able to access a range of on-demand content, costing from Y200 (US $1.69) to Y300 ($2.54).

At first glance, the move promises to usher in true convergence and offer TV-type content, which just happens to be delivered via the internet, rather than broadcast. Yet, like Apple TV and, to a lesser extent, Windows Media Center, the enabling companies are applying 20th Century business models to a 21st Century distribution channel by limiting consumers to walled gardens of content.

Back to the drawing board… 

Aside from delivering what consumers want by making internet-delivered content available on a screen more conducive to the viewing experience unlocking the potential of the internet on TVs, it

Yet again we a move which promises to usher in true convergence, and yet again, the enabler clumsily insists on giving consumers choice only from a walled garden of content.