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Make or break for Sony

Sony is not doing so well these days. The well-publicized recall of millions of laptop batteries in recent months is just the tip of the iceberg that the Sony juggernaut has found itself on a collision course with in recent years.
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Sony is not doing so well these days. The well-publicized recall of millions of laptop batteries in recent months is just the tip of the iceberg that the Sony juggernaut has found itself on a collision course with in recent years.

It’s hard to say exactly where things went wrong for the Japanese electronics giant, but some experts think it might have something to do with the company focusing too much energy building robot dogs and not enough time designing affordable products that consumers actually want to buy.

Others credit the company’s obsession with security, and the fact that its products are not easily compatible with others.

Still others point to the way Sony itself functions, with different technology groups operating independently of one another to develop the next wondertoy, but with no central master plan to ensure everyone is working off the same page.

Some also point to the fact that Sony has all but ignored the software development aspect that goes along with the hardware they manufacture — the fact that Sony does not have an online gaming centre for the PS2 to rival the Xbox Live service offered by Microsoft is just one example.

Additionally, some believe Sony has been arrogant — so convinced of its own technological superiority that they were taken by surprise when other companies began to offer products that offered the same or better performance at a lower price.

And then there’s the public relations side of things. Just last year Sony BMG was forced to recall millions of CDs when it was discovered that they contained Digital Rights Management Software that snooped on purchasers’ computers and could have opened the doors to hackers. The software patch they issued to correct the problem apparently made the problem even worse.

Also in the last year Sony failed to reach a unified format agreement with other technology and entertainment industries over the next generation of high definition DVDs, essentially creating a Blu-ray vs. HD-DVD format war that rivals the Beta vs. VHS conflict of the 1980s. Sony backed Betamax in that fiasco, if you’re keeping score.

Sony invented portable music with the Walkman, but in the digital music race the Sony brand finds itself placed well behind Apple, Creative, Rio, SanDisk, Samsung, and others.

Whatever the reasons for Sony’s recent decline, the reality is that Sony stock is in the toilet, profits are down, and the pressure is building from all sides for the company to hit a homerun. The Playstation 3 is supposed to be that homerun, but it’s no sure thing.

After dominating the last two generations of gaming with the PS-One and PS2, the PS3 finds itself in an unusual position — the underdog. Hitting the market a full year behind Microsoft’s Xbox 360 with a very limited number of consoles (less than a million for all of North America in time for Christmas and none for Europe until spring), and behind the much anticipated Nintendo Wii, the PS3 has already found itself in a bit of a hole.

Adding to the slow start, Sony has also dropped jaws with the price — $659 for the pimped out version with the 60GB hard drive, $549 for the stripped down standard version. That’s about a third more expensive than the Xbox 360 and more than double the price for a Wii.

Still, Sony is convinced the PS3 will be embraced as good value. For one it includes a built-in Blu-ray player to watch high definition movies, while the Xbox 360 only offers HD-DVD as a $120 add-on. The Wii doesn’t even have DVD playback.

For another thing, Sony’s online gaming centre is free, compared to about $60 per year for Xbox Live. Also, the PS3 comes with a hard drive and has built-in wireless connectivity so you won’t have to run another wire from your podium into the living room. That’s an add-on for Xbox and Wii.

Whether those features — as well as the real possibility that the PS3 is the most powerful gaming machine ever devised — will be enough to turn around Sony’s prospects is yet to be seen. The Nov. 17 launch date won’t tell the whole story, although most stores have already sold out their pre-ordered units, huge lines are expected at retailers holding some systems back, and one system has already sold online for $3,200 U.S.

When the launch excitement wears down and Sony’s manufacturing machine starts to be able to keep up with the demand we’ll have a better idea who is going to win the next generation of the console wars. No console maker has ever won three generations in a row, but then nobody expected Sony to dominate the last decade. Sony has sold over 100 million PS2s so far, and should sell a few more million when the price comes down over the holidays. Microsoft, by comparison, has sold around 22 million Xbox units.

Full reviews of consoles and games are available at Gamespot ( www.gamespot.com ), Joystiq ( www.joystiq.com ), and Cnet ( www.cnet.com ).

 

Website of the Week — www.cfl.ca . The 2005 Grey Cup was the most exciting football game I’ve ever seen in any league, and the first round of the 2006 playoffs have already given us some of the sports highlights of this season.