Sony’s seven-year quest to win back gamers’ hearts

Feature Paul Martinovic 19 Jun 2013 - 06:49

The PlayStation 4 looks set to make Sony top dog in the gaming world. Paul explores how Sony made that happen

As industry-defining moments go, it was initially about as understated as it gets. A title card flashed up on the screen in the Los Angeles Convention Center and Sony CEO Jack Tretton read out the words; words describing a ‘feature’ of a new gaming console, a feature that had been employed as standard by every piece of gaming hardware ever released up until that point. Words including terminology that is unfamiliar to most non-gamers, and even to a significant number of gamers. Words that were nevertheless greeted in the room like the very confirmation of the afterlife itself, and soundtracked by screams of relief and disbelief. A camera panning across the audience captured hundreds of attendees going wild and simultaneously fumbling for their smartphones, looking to capture a piece of the history that was unfolding onstage. One guy held a wrestling championship belt in the air triumphantly. Then, a few minutes later, it happened all over again.

As Tretton chuckled in disbelief, a rapturous din of applause, back-slaps and high-fives echoed around the room and into the homes of curious gamers watching the live-stream across the world. The knock-on effects were instantaneous.

Forums, websites, Tweets, Facebook statuses, image macros, gifs and YouTube comments around the world were quick to call the announcement as both a fatal dagger through the heart of Microsoft, Sony’s biggest rival in the console wars and, more pertinently, a blow struck for gamers – nay, consumers - everywhere. The next morning, Microsoft stock went down, Sony stock went up – not by hugely significant amounts, but significant enough when you consider both companies have much larger concerns than just game consoles. There were messages across the web from longtime Xbox fans, announcing their defection from the Microsoft cause to the sworn enemy Sony camp, with all the gravitas that the military terminology would imply. Microsoft defenders were conspicuous by their absence online, possibly for fear of being burned for heresy by an uncharacteristically united gaming community drunk on the possibility that maybe, just maybe, a corporate monolith was willing to listen to them.

Let’s be clear: Sony and Microsoft are two equally huge, equally soulless entities, whose only responsibility to this world is to earn their shareholders as much money as possible. Yet after E3, in the online gaming community the two have been clearly assigned roles in the fight for the future of video games: Microsoft as the evil empire looking to steal gaming from the serfs forever, and Sony as the white knights fighting on behalf of the common man. That’s Sony, a multi-national conglomerate ranked the 87th biggest corporation in the world, effectively assuming the role of the Rebel Alliance.

Of course, this moral framework has only really been overlaid onto the companies by the so-called ‘hardcore’ gaming community. (The definition of ‘hardcore gamer’ varies, but for the purpose of this article just take it to mean any gamer who takes an interest in their games consoles beyond when they’re actually playing on them; i.e. people who read gaming news, participate in online forums, watch trailers and walkthrough videos, analyse review scores, etc.) It’s currently unclear as to how much the ‘hardcore’ gamer is worth in terms of revenue to each company, but after this year’s E3 this is almost certainly about to become clear. While the victor of the console wars is far from decided, what’s nigh-on undisputable is Sony has won hearts and minds with their recent actions, and the PS4 is odds-on favourite to dominate the next generation. This is an outcome that would have been unthinkable even a couple of years ago.

The last time Sony were indisputably on top of the gaming world was in 2005, when Sony came to E3 to announce the successor to the two most successful games consoles of all time in the Playstation and the Playstation 2.

They arrived at the event filled with the confidence that had seen them dominate an unprecedented two generations of consoles, one that had been key in establishing franchises as Final Fantasy, Gran Turismo and Metal Gear Solid as some of the biggest in gaming, and that had almost single-handedly destroyed Sega's position as a gaming hardware manufacturer. Sony had the best games, the best tech, and the best marketing campaigns, and there seemed to be no reason to believe this wouldn’t continue with the third iteration of its flagship console.

In retrospect, the launch of the PS3 was at best complacent, and at worst outright reckless. The launch titles were uninspiring. The hardware, although technically impressive, was reportedly difficult to code for, particularly when compared to the Xbox 360, and led to both high development costs for the games themselves and in many cases notably inferior graphics on cross-platform titles when compare to their 360 counterparts. The online multiplayer component was less stable that the Xbox equivalents, although it was free.

The initial design featured an ostentatious-looking, boomerang-shaped controller, three Ethernet ports, two HDMI ports and six USB ports: the boomerang was abandoned in favour of an updated Dual Shock, and the number of ports was scaled down to minimise costs, once Sony realised the staggering amount each machine would cost to produce. Even after these cuts, each base model PS3 cost Sony $805.85 - the retail price of $499, deemed exorbitantly high in comparison to the Xbox 360 which came in at around $100 cheaper, still meant that Sony lost a scarcely credible $300 for every console they produced. Crucially, the internal faffing and production delays meant that the 360 had a whole year's head start on the PS3 in the US.

Microsoft’s rush to market did come at a price - the hurried manufacturing process has been credited by numerous sources as the reason for the scandalously high failure rate of the first generation of 360s, which some speculated could have been as high as 1 in 6 360s dying within three years of purchase.

An Xbox insider later alleged that effectively Microsoft made a gamble, reasoning that the bad press and millions of dollars they might have to spend on issuing replacement Xboxes would be a small price to pay for establishing a huge lead on Sony in the console wars.

Ultimately, though, the gamble paid off, largely because the system was, despite the unforgivable hardware failures, a very good one, with an interface, graphics performance and online multiplayer far better than anything that had came before, and operating at a level that the PS3 struggled to meet even when afforded a year to catch up.

What neither company could have anticipated was the phenomenon of the Nintendo Wii, which with its combination of a low price and innovative motion control, roped in casual gamers and families in unprecedented numbers, and in the process comfortably outsold both Sony and Microsoft's machines.

With the benefit of persepective it's hard to fathom how Sony managed to botch the PS3 launch so badly, but it seems that the two biggest issues were arrogance and complacency. The Playstation brand was seen to be unsinkable, and while it was far from destroyed the PS3 launch saw it take a pummeling like never before. With the high price they lost the masses, and with their tech failures they lost the hardcore.

A 2007 Games Radar article on top gaming PR disasters put the PS3 launch at the top, saying that Sony managed to "take one of the most anticipated game systems of all time and — within the space of a year — turn it into a hate object reviled by the entire internet". Gabe Newell, founder of the critically adored and hugely influential Valve Software, said in a widely-publicised interview: "The PS3 is a total disaster on so many levels, I think it's really clear that Sony lost track of what customers and what developers wanted...I'd say, even at this late date, they should just cancel it and do a do over. Just say, 'This was a horrible disaster and we're sorry and we're going to stop selling this and stop trying to convince people to develop for it."

The parameters for this unusually long generation of gaming in the UK and US had been set - the Wii was for families, the 360 was for gamers' gamers, and the PS3 was for those loyal to franchises like Metal Gear Solid and Gran Turismo, or for those people who wanted a Blu-ray player (it would be interesting to see how the PS3 would have fared or even if it could have survived if it had found itself on the wrong side of the Blu-ray/HD-DVD war), but ultimately was a machine with potential it conceivably might never be able to tap into.

As the generation went on, the ire of gamers would soon tune into a new development in games publishing – the implementation of DRM systems in games in an attempt to stop piracy and the increasingly lucrative second-hand games market – this despite compelling evidence that destroying the second-hand games market without first drastically lowering prices would result in decreased rather than increased profits, and that games with the most stringent DRM frequently tend up as some of the most pirated games of their era.

Software giant EA led the way in attempting to launch DRM, with a system in the PC version of their hit space RPG Mass Effect that required users to re-activate their software every 10 days to continue to use it, and limited the number of installs to three machines. This was shortly followed by a similar system for Spore, Will Wright’s follow-up to The Sims, the best-selling computer game of all time. The backlash online was ferocious and immediate: if there’s a company that hardcore gamers truly seem to regard as the ultimate big bad, it’s EA, who have been voted by a consumer magazine the worst company in America for the last two years in a row. Spore’s Amazon page was filled with furious, one-star reviews, and the game was ruthlessly pirated, seemingly out of principle.

This uproar seemed muted compared to the one that met the arrival of ‘always-on’ DRM. Ubisoft pioneered the system with PC releases Assassin’s Creed 2 and Settlers 7, which required that you remain online at all times while playing, and booted you out of the game (without saving your progress) if you disconnected. This system was so unpopular that Ubisoft were forced to back down on some of the stricter measures, and outages to Ubisoft’s DRM servers were later revealed to be the result of targeted attacks from hackers.

Another twist in the DRM tale came with the releases of the eagerly-awaited Diablo III and SimCity, two PC games which went so far as to host crucial game data on online servers, meaning users were never in full possession of ‘their’ game, and that it could be switched off at any time. The announcement of the SimCity DRM came during a Reddit AMA with the developers that quickly turned from benign to disastrous, with thousands of gamers threatening the boycott the game on release. When it was eventually released, the servers went down almost immediately, rendering the game completely unplayable for the majority of gamers and causing a PR nightmare.

These well-publicised incidents were restricted to PC gaming, where DRM systems were easier to implement – console gamers’ only real equivalent during this period was the much less Draconian online pass, a scheme which was recently abandoned in a suspiciously timely fashion. But all of the console companies would have been keenly aware of the assorted furores, which were widely reported in the gaming press.

Microsoft, in particular, would have known that their Xbox One DRM policies as they stand would have caused the uproar that they eventually did. Here’s a quick recap if you missed them: the Xbox One requires you to connect your console online every 24 hours in order for it to remain activated. You do not technically own boxed games – they are licensed to you by Microsoft, which means they can effectively turn their usage at any point. The ability to trade in your games is decided by publishers, as is your ability to gift the game to a friend: this only works if they have been on your friends list for 30 days or more. Loaning and renting games will not be possible.

After the DRM debacles of recent years Microsoft would have known that a sizeable chunk of gamers would welcome their revolution in digital consumer rights about as warmly as a fart in a spacesuit, to paraphrase Billy Connolly. They knew this: they just didn’t care. They weighed up the pros and cons, in much the same way that it had been alleged that they had done seven years previously when making decisions regarding manufacturing, and reasoned that the bad press would be worth the costs recouped from tackling the second-hand games market.

Their second gamble was to assume that Sony would be equally unwilling to pass up on the opportunity to kill off second-hand games stores, and be unwilling to be left behind in this brave new world of DRM. The third gamble was to aim high with the price (set at £429 in the UK, $499 in the US) and hope that brand loyalty to the Xbox would see them through, in much the same way that Sony believed the Playstation name could command a premium. The fourth gamble was to assume that Sony mess things up again.

After the bungled launch of the PS3, Sony had still found time for several more well-publicised instances of them metaphorically sitting on their own testicles. There was the ill-fated social gaming platform Playstation Home, the ‘ApocalyPS3’ that saw the console thrown for a loop by a leap year, and, most notably, the loss of the personal information of over 77 million users in 2011 that saw the Playstation Network go down for a week; an unprecedented catastrophe that not only infuriated consumers, but was serious enough to land Sony in front of governments all over the world in order to explain how they had lost so much personal data.

Sony did manage to weather the storm, however, offering an apology package to subscribers after the outage that was generally well-received by those affected, and were later cleared of any serious negligence in losing the data. Despite this significant setback, the last few years saw the PS3 finally establish itself and get its house in order. As technology developed, the cost of the making the console came down considerably, and so did the price, with the release of the revamped PS3 Slim being met with much acclaim.

Well-received exclusives such the Uncharted series, Heavy Rain, the Little Big Planet games, Demon Souls and the recent The Last of Us kept the consoles selling, and the Playstation Plus service, which in 2012 began regularly offering subscribers two free AAA games a month, was praised by gamers everywhere as a piece of generosity uncharacteristic for the game industry. Sony rode the wave of the thriving independent gaming scene arguably much more effectively than Microsoft and Nintendo, resulting in acclaimed titles such as Journey, Sound Shapes and the Pixeljunk series, and gave the company a reputation for supporting innovation. Gabe Newell did a very public about-face on the PS3 at E3, and announced that the version of Portal 2 on PS3 would be the ‘best’ on any console. Blu-rays slowly won more converts over from DVD, and the rise in popularity for Netflix streaming had a significant effect on the PS3’s fortunes: the system was identified as the most popular device used for streaming Netflix onto TVs, and was not far behind the PC in terms of overall use.

The preference for PS3 over Xbox for Netflix must at least partly be put down to Xbox’s decision to put the service behind a paywall, alongside other apps such as web browsers, Facebook and iPlayer: all services available for free on the PS3 and the Wii.

Just as Sony was showing signs of becoming the good guys once again, the last few years have seen gamers become more and more disgruntled with Microsoft: while Xbox Live’s stability and huge userbase made it the platform of choice to play games such as Call of Duty and Battlefield, the communities that those games attracted also meant that the service started to become associated with foul-mouthed teenagers, macho posturing, and (most disturbingly), an abundance of racist and homophobic language. The less populated PSN wasn’t devoid of these things, but Xbox Live was damned by its bigger community and better versions of the kind of games that seemed to attract and even encourage such behavior, and was tarred with a worse reputation as a result.

Similarly, Microsoft’s unwillingness to give anything away for free on Xbox Live was shown into stark relief by Sony’s new found generosity – also, Microsoft’s announcement prior to E3 that they were to enter into a ‘special relationship’ with EA seemed particularly antagonistic to the hardcore, particularly with its use of a phrase associated with the inept mendacity of war-on-terror era Bush and Blair. Microsoft also chose a bad week to announce a new system built around constantly keeping an eye on you, as the news was filled with revelations of the NSA willfully spying on US citizens’ phone records.

The stage was set perfectly for E3: sales of the Wii U had been disappointing, and there was a general sense that the Wii had been lightning in a bottle, leaving the next generation clear for Sony and Microsoft to fight it out. Microsoft’s E3 conference was solid, with a number of excellent games on display, but the minds of journalists and gamers was still on the DRM revelations.

Sony were yet to comment on the issue of DRM, leading many to interpret their silence as complicity. It turns out, it was a classc case of heroic showmanship – like Han Solo insisting he’s only in it for the money, only to roar into view and dispatch the Empire at the crucial moment.

It’s unclear as to when Sony deciding to aggressively counter-attack on behalf of hardcore gaming’s anti-DRM brigde, but ultimately all that matters is that it could not have been timed better. With their actions post-PSN outage, gamers had begun rooting for them again: this allowed them to get into a position to throw a knockout punch at Microsoft at E3, and it was greeted as such.

According to Giant Bomb’s Jeff Gerstmann, Sony made sure to fill a number of seats at the E3 conference with ‘members of the Playstation community’, to ensure the appropriate rockstar ovation to their announcement (it’s probably a safe bet that the championship-belt wielder was a member of this community). An even cannier move, and a bigger indicator of Sony’s renewed confidence, was their release of a viral video immediately after the conference. The video purported itself to be a guide to sharing games on PS4, and simply showed one smiling Sony employee handing a game to the other. The video felt opportunistic, like something put together the night before by an ambitious marketing exec; but you can bet that that person is being promoted to within an inch of their life right at this very moment.

The fact that Sony also announced that they would be undercutting their rival by £100/$100 is, in the short term, probably more significant: as thorny as the issue of DRM is, price will still be the more important factor for the vast majority of potential buyers. It also demonstrated that Microsoft hadn’t learnt from their rival’s overpricing of the PS3, in a misguided attempt to rely on the strength of the brand to see them through.

But Sony’s DRM stance is the more important decision, not just because it may have single-handedly saved the second-hand game industry, but for how it may have already given the company a commanding lead for this generation. Entertainment companies are, by nature, required to balance making people feel good with taking their money, and Microsoft recently have seemed to forget the first part of this equation.

Sony simply made gamers feel good again, after weeks, months, years of negativity: their conference suggested that they had gamers’ backs, directed some delicious schadenfreude and a bloody nose to an increasingly arrogant Microsoft, and provided a good old-fashioned comeback story for the ages. Gamers ultimately, do want to be stripped of their hard-earned money – they just don’t want to feel used, and right now, Sony are the salesmen with smiles on their faces.

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