Sony Outlines Digital Distribution for PS3

Posted by jgaudiosi :: Emerging Business Models

PhilharrisonPhil Harrison, president of worldwide studios for Sony Computer Entertainment, outlined PlayStation 3's PlayStation Network Platform (PNP) details at the Game Developer's Conference in San Jose, CA this week. (PNP is an internal name and the service will be renamed for consumers with online rumors currently pointing to PlayStation HUB.) Harrison confirmed that PNP will support the digital distribution of movies, music, TV shows and games.

PS3 will come with a 60 GB hard disc drive that will allow storage of content. The drive will be upgradable so consumers can swap out full drives and buy larger ones down the road. This will allow digitally distributed content to remain a focus of PNP over the life of PS3. Given that Sony is supporting PS2 for a full 10 years after launch, PS3 is expted to have a similar long life span.

Harrison said that PNP will focus on content, communication, community and commerce. Sony will offer PNP free to consumers and open the online service to third party developers. Harrison referenced Blizzard's "World of Warcraft," which has over 6 million players, as an example of the type of massively multiplayer online games he would like to see on the service. Sony Online Entertainment is designing PNP with Sony, which means gamers can expect to see "EverQuest" and original MMO games from that publisher on PNP in the future.

The PNP service will allow gamers to play a game and have simultaneous video chats on-screen with friends and gamers through a translucent HUD. This same display also allows Web browsing, e-mail and other online functonality all seamlessly while in a game world. PNP will also allow gamers to buy new cars and tracks for a game while in that game world. Customized shops within games will allow gamers to purchase new digitally distributed content seamlessly. The fact that these virtual stores can appear in the game universe (something that Xbox Live Marketplace does not currently offer) really shows off the convergence potential of the future of digital distribution.

Harrison alluded to the future of videogames and digital distribution when he said that Sony currently makes games on discs inside boxes in stores, but in the future Sony will be creating and servicing a network of gaming communities. Sony expects to make revenue not just from game sales in traditional packaged media, but through other communities like mobile gaming, in-game transactions, episodic game content, game subscriptions, and game object auctions (something that's huge with MMO games today on PCs). Sony is also launching an international e-distribution network that will provide content that's only available online.

Harrison even referenced MySpace.com as an example of how PNP could bring social-network functionality to PS3 for gamers. Gaming is a community experience, as Sony's online games like "SOCOM" and SOE's games like "EverQuest" have shown. The PC has already built communities around games, but PC gamers constitute small numbers compared to what console gamers can generate. Harrison said that Sony has sold 100 million PS2s and its 6,732 games had sold over 1 billion units worldwide. Sony owns 60 percent of the gaming industry today. Couple that wil online communities and there's a huge audience to tap into.

Despite its $30 billion global take, gaming is still in its infancy. Sony's PlayStation brand has done more over the last decade to bring gaming to the mainstream than any other company, but PS3 looks like the platform that can really take gaming to the masses.

Harrison compared the game industry to Hollywood. He said the strong brands and IPs that game companies are building today can generate merchandising income like Hollywood films and TV shows currently do. He also said there's no reason a great game can't generate the type of water coller talk that a new episode of "24" or "Lost" does on TV.

It looks like hit shows and films will be beaming to PS3s this November. During his speech, Harrison said that PS3 will be used as a content server that can deliver media to PSP anywhere in the world. That type of synergy is what gives Sony the edge in the next round of the console battle. Sony-owned film, TV and music content, coupled with game content, gives PNP a leg-up on Xbox Live right out of the gate, as long as the type of PSP to PS3 synergy exists withing the Hollywood and gaming Sony divisions.

Comments

Sony seem obsessed with the whole media element of their next gen console, they know that the Xbox 360 is beating them on all fronts gaming wise. They are clutching at straws.

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