Game companies such as Nintendo are thriving through the global recession while stalwarts such as Panasonic and Sony struggle (Sony's diversification and PlayStation sales haven't helped recently) with huge corporate hierarchies and a dearth of new "must have" products.
What's interesting about the growth of Japanese game play is that it's mainly on consoles and handhelds (with the Nintendo DSi blurring the line), whereas in the U.S. the growth is on mobile devices and online.
Online games grew 22 percent year over year in the U.S., while console game sales are expected to drop by as much as 20 percent year over year.
What happens next in Japan is still a mystery. Corporate behemoths have been slow to change and are severely weighed down by huge ranks of bureaucracy. The U.S. style of slash-and-burn economics isn't likely to fit for most of the Japanese electronics manufacturers, so they'll be forced to make changes in some manner that works for them. Sooner or later it will be very painful.
In the meantime game companies and software that enhances existing experiences, like doing even more with mobile phones, will have the upper hand on electronic sales for the foreseeable future.
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I wrote last week about Sony CEO Howard Stringer's comments suggesting Sony could have beaten Apple in digital music if only the had embraced open technology. While technology certainly could play a role in Sony's success, it's clear that the company needs a whole new way of thinking.
At a breakfast Thursday cohosted by the S.I. Newhouse School of Public Communications at Syracuse University and The New Yorker, Sony Pictures Entertainment CEO Michael Lynton told the audience his not-so-inner thoughts about the Internet.
"I'm a guy who doesn't see anything good having come from the Internet...(The Internet) created this notion that anyone can have whatever they want at any given time. It's as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, 'Give it to me now,' and if you don't give it to them for free, they'll steal it."
According to WWD.com Lynton tried out another simile. Referring to the Obama administration's goal to spread broadband access without, he said, regulating piracy, Lynton made a comparison with building highway systems without speed limits or driver's licenses. "We do need rules of the road," he said.
Rules of the road are one thing, but these type of short-sighted, borderline absurd comments suggest a more systemic problem. Instead of embracing new technologies and delivery methods, Sony chooses to stick to the old, now failing ways, as evidenced by the company's recent $1 billion loss.
With leadership like this, Sony only has itself to blame.
In an interview with Nikkei Electronics Asia, Sony CEO Howard Stringer pledged that the company would use more open standards in the future, saying "If we had gone with open technology from the start, I think we probably would have beaten Apple" in the music market.
Sure, and if Sony had created a music store, a desktop application, and a great device, it could have won that way too. But it didn't. Certainly, open technology would have helped to create some kind of ecosystem, but it wouldn't have solved the strategic problem of creating a holistic consumer experience. Nor would it have made a difference in the fact that Sony owns a huge library of music that Apple monetized far more efficiently while Sony fought for CDs to outlive MP3s.
Sony had many, many chances to use open standards and technologies for a wide variety of products and opted against in most cases. The company also gave up its massive lead in music players as Apple leaped ahead by creating a seamless user experience while Sony focused on that blue alien.
Sony is however leaning toward openness in the PlayStation Network (PSN) where the digital rights management is based on Marlin, an open scheme (yes, open DRM is an oxymoron) developed by consumer electronics companies and other companies that will allow other systems to participate in the PSN.
"What does all this mean?" he added. "Very simply, it means that Sony has begun the transition from a closed system to an open one.
Hindsight is 20/20 and I am sure Stringer believes his statement to be true. But open is a relative term. Just because other companies will be able to interact with the PSN it doesn't mean that the rest of the world's developers will be able to participate in developing games or applications or creating a cottage industry as Apple has done for the iPhone.
Being open doesn't guarantee that a community or ecosystem will sprout up around a product. A company with Sony's coffers could do a lot more to make its devices and content accessible to a broad range of developers who would seed the market and make it more money.
Via Engadget
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Sony Japan quietly announced Life-X, a kind of meta-aggregator for all kinds of content. While overall not that ground-breaking, Sony has yet to demonstrate much internet-savvy and this appears to be a first step in marrying digital content with Sony brands and devices.
The fact that Sony plans to enable this site in PlayStations and TVs is an interesting twist, suggesting that they finally have something in mind to drive more internet traffic onto Sony devices.
The site will be accessible through a host of internet connected devices and aims to become a destination site in Japan.
The free site, which will begin a closed test in late September, lets PC and cellphone users pool photos, videos and blogs, either by direct uploads or by linking to their accounts on other Web sites such as flickr (YHOO), Picasa (GOOG) and Twitter. They can then invite friends and family who can view the site using a Net-connected PC (including Macs) or cellphone, or with Sony's flat-panel TVs and PlayStation gaming equipment.
It is a bit perplexing why Sony (and other consumer electronics giants) haven't already launched these kinds of sites. There is plenty of content out there and aggregation just isn't that difficult. It will be interesting to see if Sony's brand awareness in Japan can drive the site to success.
Via BusinessWeek
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