The Wall Street Journal confirms this morning something that is an open secret of sorts: Sony is planning to mount a video downloading service for its hot gaming platforms, the PS3 and the PSP. The article says CEO Howard Stringer is spearheading the service, which would be a direct rival to Apple’s iTunes.
Although the “news” is getting a lot of play, Sony executives have said publicly and privately for months that just such a service is in the works. In July at E3, for example, Peter Dille, Sony’s VP of Marketing, said that the company is indeed working on a movie download service for both the PS3 and the PSP.
It’s no surprise that Sony is taking advantage of its wide-reaching gaming platforms to jumpstart a foray into the video download business. Sony’s PlayStation 3 gaming platform is an ideal platform for bypassing traditional video service providers and delivering video directly to the TV set using the Internet. As of June 2007, Sony had shipped 4.28 million of these desirable gaming stations.
The PSP is even more popular — as of June 30, 2007, Sony had shipped 17.86 of the portable gaming devices worldwide. Therefore, Sony has a combined reach of at least 22 million homes capable of buying and downloading videos, a great start.
But what is surprising is just how long Sony took to make this move, particularly given that one of its biggest rivals, Microsoft, leapfrogged ahead of the entertainment and gaming giant by establishing a video download service for its Xbox platform. Sony, unlike Microsoft, owns vast global entertainment businesses, including a major Hollywood studio, and should, given its leadership in both entertainment and gaming, have been the pioneer in marrying video downloads with gaming platforms.
Back in August 2006, I predicted in a report I prepared on Sony that the Japanese electronics and entertainment colossus would soon jump into the video download business. (As it turns out, “soon” translates into a year-plus.) It seemed to me then that Sony was perfectly poised to clean up in this arena.
[O]ur analysis showed that the PS2, PS3 and PSP product line could be key to how well Sony navigates the rapidly changing waters of video and entertainment distribution. These devices, which enable the storage, playback and wired and wireless Internet access to video content, could serve as the killer convergent devices that Sony executives have, from the outset, hoped they might be.
Sony’s clearest prospects for growth lie in the PSP, PS2 and PS3 convergent media devices because, unlike most other media and entertainment companies, Sony has a competitive advantage by also being a manufacturer of media receiving gear. Not only does Sony control major motion picture, television and music businesses, it also supplies the devices through which a large number of consumers can access that entertainment content.
It seems like Sony is finally doing something to make good on those growth prospects.
Posted by Cynthia Brumfield at 8:35 AM | Print | Comments (0)
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