Sony Lightens the Load

Watching Sony's attempt to jumpstart sales of its PlayStation 3 console by dropping features is like watching a pilot throwing out cargo to lighten the load before takeoff.

The problem is, of course, that the one feature responsible for the bulk of the PS3's cost... the Blu-ray drive...is the one piece of hardware they cannot get rid of. It's the engine, if you will. So, Sony is forced to instead eliminate features it once touted as important.

Backwards compatibility, which may have had more than a little to do with the early success of the PS2, is the latest feature to be jettisoned in the new 40GB console announced for Europe and Japan...and also expected for North America.

Dropping the PS2 Graphics Synthesizer chip, as well as two of the four USB ports, apparently saves Sony enough money to justify pricing the latest US version of their console at $399.99.

There is no question that the new price tag makes the PS3 more attractive to those who might have balked at the original asking price, and it also brings the PS3 closer in line to its competition. In fact, with the 20GB Xbox 360 Pro now priced at $349.99, the extra $50 could easily be justified by the PS3's Blu-ray capabilities, not to mention a hard drive which is twice as large.

The loss of backwards compatibility, however, represents some unexpected turbulence.

At first glance, one can almost agree with Sony's newfound belief that backwards compatibility isn't important. After all, it isn't difficult for people to keep a PS2 hooked up to the same television set. It is also hard to point to a single PS2 title that the majority of PS3 owners would demand to play on their new console. And, while it may have caused some grumblings among hardcore gamers, incomplete backwards compatibility didn't adversely affect sales of the Xbox 360.

In fact, prior to the debut of the PlayStation 2, you would have to go back to the mid-1980's (with the Atari 7800) to find a videogame console that featured backwards compatibility out of the box. It simply wasn't considered an important feature.

For those people who have dumped their old consoles long ago, publishers have already been able to provide NES, SNES, N64, Genesis, TurboGrafx and PS One titles for download to the latest generation of consoles. Thanks to broadband, and the availability of larger hard drives, it may even one day be possible for the most recent generation (Xbox, PS2) titles to be made available for download via Xbox Live or the PlayStation Network...although, at this point, the download time would be almost unbearable.

So what benefits does backwards compatibility offer?

Backwards compatibility might encourage brand loyalty. A family with a decent library of PlayStation games and controllers may feel better about their investment, knowing that their existing software and accessories won't have to be abandoned so quickly if they stay with Sony for the next generation.

Backwards compatibility also might encourage consumers to purchase a new console earlier than they might have otherwise, since they know they will be able to play their last-generation titles while waiting for new software to arrive. This is especially important for consoles whose launch titles have been somewhat disappointing.

Let's face it--so far, there really haven't been that many PS3 titles worth playing. The system has yet to see a title achieve both critical acclaim and commercial success to the same extent as a Gears of War or a Halo 3. Some anticipated exclusives, such as Lair, have performed poorly, while games such as Heavenly Sword and Warhawk have received average reviews at best. The recent delays of Unreal Tournament 3, a timed exclusive, and GTA IV, which is multiplatform, aren't helpful to PS3 sales either.

Things may change in the near future with the release of Ratchet & Clank Future and Uncharted: Drake's Fortune, but the fact remains that Sony has never had the likes of a Halo or Zelda title to sell its consoles. While it does have many successful first-party franchises (Gran Turismo, Jak & Daxter, Sly Cooper, SOCOM), Sony has generally relied upon strong third-party support...support which is not yet forthcoming in this generation due to the PS3's smaller installed base.

That, of course, is the "Catch 22" that Sony finds itself in: people won't buy the PS3 until there is an attractive software library, but third-parties won't create an attractive software library until more people buy a PS3.

To Sony's credit, it has been hard at work trying to resolve both sides of this conundrum. It slashed the price of the PS3 only eight months after the US launch--not an easy thing to do considering how much money it already lost on each console sold. It has settled the case with Immersion, and has slated several key titles for a holiday release...although, frankly, this would have been better news last year.

While Sony certainly sold a number of PS3 consoles to videophiles as Blu-ray players, and will likely do so again with the latest price drop, it is questionable whether or not this group will ever purchase a significant amount of software. And Sony's cut of a $30 Blu-ray movie is surely less than its take on a $60 PS3 game.

As has always been the case, consumers purchase videogame consoles based upon the games that the machine can play. Since the perception is that the PS3 is currently lacking in this regard, backwards compatibility arguably becomes even more important.

It is therefore surprising that Sony has made the decision to eliminate this feature in order to further reduce the price of the PS3. They seem to be gambling that potential PS3 customers are willing to forego backwards compatibility in order to save a hundred dollars. But are they? After all, gamers who didn't bite at the last $100 decrease are likely to still be playing PS2 games...which are now no longer recognized by the new console.

Whether or not Sony's latest gamble pays off, its decision has resulted in a confusing mix of SKUs and a possible customer relations problem over PS2 games that will work (20GB; 60GB), may or may not work (80GB) or definitely will not work (40GB) on a PS3.

Alternatively raising and lowering the capacity of the included hard drive and eliminating features once considered important gives the impression that Sony has no overall flight plan, but is making this up as they go along.

It isn't too late for PS3 sales to soar. The only question is, in its attempt to lighten the load, has Sony jettisoned the parachute?