Sony – Achilles heel

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User experience remains a huge risk in the next generation. 

• Sony’s launch of two new PlayStation 4 consoles broadens the appeal of the platform nicely but these devices do nothing to alleviate the issue that could cost Sony its lead in the console gaming market.
• Sony launched two new consoles at an event in New York on Thursday, each of which is aimed at spreading the appeal of the platform more widely.
  • First: PS4 update.
  • This is a slimmer, sleeker PS4 with all the same specifications as the original except that it comes in a smaller box with a lower price tag.
  • This is selling at $299.99 and is aimed at bringing new gamers into the world of PlayStation.
  • Second: PS4 Pro.
  • This is device is roughly the same size as the original, except that the graphics have been beefed up to support 4K, HDR as well as higher frame rates.
  • This is aimed at hard core end of its fan base which is always looking for ways to enrich the gaming experience.
  • Developers are already creating downloadable patches that will upgrade existing 1080p games to 4K as well as expanding the colour gamut and frame rates.
  • The 4K will also support video streaming services like Netflix which are already moving to 4K.
  • This device will be priced at $399.99 pretty much where the old PS4 was selling for.
• These updates are great for widening the appeal of the PS4 for playing games but they nothing to improve the user experience.
• Sony and Microsoft have carved up the console market between them with Sony doing extremely well in the current generation taking roughly 2/3 of all gamers onto its platform.
• I have long believed that this was more due to mistakes made by Microsoft at the launch of the Xbox One (see here) rather than the PS4 offering a substantially better gaming experience.
• Microsoft scrambled to fix these issues but the damage had already been done resulting in PS4 outselling Xbox by 2 to 1.
• However, I think that the next generation could be very different because then the user experience and the ecosystem will be much more important and here Microsoft utterly destroys Sony.
• When I compare the Xbox One’s rich and fun user experience to the bare bones of Sony, there is simply no comparison.
• The PS4 experience appears to be aimed at allowing the gamer to launch the game and little more.
• Furthermore, doing basic things like uploading a gamer photo, changing a password or setting up payment is tortuous and frustrating. (see here).
• When one is trying to develop an ecosystem, the user experience has to entice the user to stick around and explore what else is on offer.
• This is how user loyalty will be generated and how an ecosystem will get its users to spend more time within its community.
• Furthermore, the look and feel of that experience can then be replicated across other devices creating a feeling of ease and of being at home.
• With the Sony PS4 user experience it is almost a relief to fire up a game as Sony has provided the user with no reason whatsoever to hang around and explore.
• This will be much more important in the next generation as most games will be available on both platforms meaning that how well the device delivers other functionality could be the deciding factor.
• Microsoft is languishing when it comes to its Digital Life ecosystem but the assets themselves are in good condition and Microsoft has long understood what it needs to do to make its console appealing.
• Furthermore, Microsoft is unlikely to repeat the mistakes it made at the launch of the Xbox One meaning that Sony really needs to pull its socks up.
• Unfortunately, software is not something that Sony does very well and the company has a habit of ceding commanding market positions with very little resistance.
• I see no signs of Sony working on improving its user experience and I fear that Microsoft will take a large bite out of its market share when the next generation consoles launch.
• This is one reason why I fear that Sony’s improved fortunes may end up being short-lived as I think that Hirai-san has applied a Band-Aid rather than addressing the root of the company’s woes.
• Hence, I would be very wary at getting involved with Sony’s stock even though it remains the only Japanese consumer electronics company with any real chance of longevity.