PS4 appeals to gamers, investors with social push

If there was any doubt that Sony was trying to appeal to investors rather than gamers with its PlayStation 4 launch in New York on Wednesday, Andrew House – the company’s head of computer entertainment – put it to rest near the end of the two-hour show.

"There's another partner we'd like to invite on stage to show the tremendous support we have for PlayStation 4," he said before calling up a representative from Blizzard Entertainment to talk up the new console.

It was the umpteenth developer in a long cavalcade of them, each of whom was called on to spotlight new and different capabilities of the next-generation machine. The PS4 will hit stores late this year, just in time for the holidays.

From the “share” button on the redesigned controller that will allow gamers to instantly upload videos of their accomplishments to Facebook and Ustream to better social interactions (like taking over someone’s game online to help them through a particularly tough part) to – of course – more realistic graphics, the new console will do it all, they said.

No fewer than a dozen of them, that is, from the big guys at Ubisoft and Capcom to the small, indie developers such as Braid creator Jonathan Blow, to everyone in between, Sony’s collective message was clear – we’ve got tons of backing for this effort, so trust us.

The none-too-subtle reassurance to investors was perhaps understandable, given that the console is arriving at a time of upheaval in the games industry. The rise of tablets and smartphones, as well as the growing popularity of free online PC games, means the market previously dominated by the company, plus Microsoft and Nintendo, has fragmented.

A report last month by consumer tracking firm NPD Group found that overall spending on games in the United States, the world's largest market, declined 9 per cent in 2012 to $14 billion, from $16 billion.

Free-to-play online games, where developers make money through micro-transactions - players buying new tractors in FarmVille, for example - and cheaper tablet and smartphone offerings were cited as the cause. While such games generally don't come close to the graphic-intensive immersive experiences of consoles, they have scratched enough gamers' itches to make a difference in their spending.

Nintendo and Sony have both had particularly rough rides in the mobile space, with sales of their respective portable systems - the 3DS and Vita - being more sluggish than expected. Just days ago, Sony cut the price of the Vita in Japan by 20 per cent in an effort to boost slow sales.

The fragmentation has also hit home consoles, with Nintendo last month significantly cutting sales forecasts on its Wii U. The company expects to sell only 4 million units of the console, which launched in November, by the end of March, down from 5 million. Game sales expectations are taking an even bigger cut, to 16 million from 24 million.

Nintendo shares have generally been heading downward as a result since 2008 while Sony – also burdened by slowing television sales, which make up a good chunk of its bread and butter – has also seen its stock drop over the past year.

Microsoft is next in line to launch a new console. The follow-up to its Xbox 360 is also expected this year, but the company has taken pains recently to position its device as something more than just a games machine.

At the D: Dive Into Media conference last week, Microsoft executive announced that the amount of entertainment content - as in movies and TV shows - offered through its Xbox Live online service tripled in 2012.

"Yes, we started with video games, but we have been on a journey to make Xbox the center of every household's entertainment," said Yusuf Mehdi, corporate vice president of Microsoft's interactive entertainment business.

The market looks to get even more fragmented with a number of new players soon expected to enter. Valve, operator of the popular online game download service Steam, is planning its own console. The Steambox would essentially bring PC gaming to the television screen.

San Francisco-based startup Ouya made waves last year when it became one of the fastest projects on crowd-funding site Kickstarter to raise $1-million. The company plans to release its $99 console, which will run Google's Android operating system, this summer.

There also the continuing rumblings regarding Apple getting into the home television and gaming market. With the majority of the most successful and profitable apps in its App Store being games, Apple has already cemented itself as a major competitor to established players.

If Sony is going to revive its fortunes with investors, it’s going to have to make a concerted effort to appeal to gamers over the next few months leading up to the PS4’s release.