This week Sony had a press conference to announce their next gaming platform, the Playstation 4. I was able to watch much of the announcement and read a few summaries like this one from Penny Arcade. As predicted, this will be an exciting year for gamers…

Sony in 2013

Prior to the event, the talk about Sony was not good. Basically folks were talking about what the F Sony is doing with their current systems.

Several games have released with absolutely zero advertising. Starhawk? PlayStation all-stars? Sly Cooper? Big releases for the PS3 and the Vita with no support from Sony to promote the games.

Added to the lack of advertising, there have been problems at the company. Sony corporate is losing money. They fired their advertising agency. They sued their iconic (and very funny) spokesman “Kevin Butler”.

And they have been announcing that they are dropping support for various game studios that made games for Sony. No DLC, no new games, etc. These announcement are often the death of these small companies that relied on the Sony platform.

These are not the kind of news stories that a healthy, thriving company generates.

February 20, 2013

What Sony has been talking about is their Event on Feb 20th. This event has been an almost complete copy of Apple’s PR playbook.

They scheduled an event of their own, not tied to a trade show like E3 or DICE or GDC. They announced the event early and invited journalists but did not say exactly what it was for. All of which got people to talk about and speculate and get excited about the event. Just like Apple does.

The event itself was pretty solid and smooth. Journalists were invited to attend in NYC and they live-streamed the event for rubes like me so they got wide distribution of their message. Some presenters were a little awkward, some were clearly speaking English as a second language, but overall it was a lengthy, entertaining event for folks that want to see a new game console.

However, Apple announcements do some things that did not happen. Sony did not show the device. They did not announce a price. They did not announce a release date. And the release will not be anytime soon. “Holiday season 2013” is still over six months away.

But I think the event was a success for Sony. They are making the transition to owning the PR cycle like Apple does. They did a solid job. They pre-empted Microsoft even though Microsoft is expected to release their own system first.

Now folks are talking about the Xbox and whether Microsoft will do an event themselves. If there is an Xbox event, will it be one they planned to do anyway or will be seem rushed or forced like the Surface announcement last year? Time will tell.

Unfortunately, the event does not really resolve some of the big problems Sony is facing for a next gen console.

Market reach

There is no doubt that Sony and Microsoft can build cool products. The big question is whether they can create profitable products given the increased competition and changes in the entertainment industry.

The PS4 looks like a PS3 – expensive hardware that will probably be sold at a loss with the expectation they can make it up with software and services over time. In other words, the PS4 has the same business model as the previous consoles.

It also looks like the same product. A dedicated gaming machine costing $400? $500? Whatever the price it will clearly be much, much more money than a $100 Roku or AppleTV.

We have the data. With 6B people in the world, dedicated game consoles appeal to a limited market. While Apple sold roughly 125M iPhones and 60M iPads last year alone, none of the three consoles has sold more than a 100M units after 6 or 7 years on the market.

The PS3 has sold about 70M systems and that is a lot of devices. However there are two important questions.

• Is there any reason to expect the next system to sell more units?
• If they sell 70M or fewer units, can Sony turn a profit?

Microsoft has sold more units than Sony but they face the very same fundamental questions about their business.

A PC is a PC

As I wrote about before, the PS4 is basically a PC using commodity Intel hardware design.

We can look to Apple for guidance regarding this change. The iMac really took off after Apple moved from low-volume RISC-based hardware from IBM to commodity Intel CPU’s. By moving from low-volume to high-volume, OEM’s are able to provide more for less. Sony is moving from the Cell processor to commodity hardware from AMD. That change will clearly lower their hardware costs and they will probably also lower the costs to developers for making games on the system. Win-win.

Moving to a PC design will raise two big questions:

• Backwards compatibility of games you already own
• How will the platforms differentiate themselves

Backwards Compat

While the hardware change is a win-win for the OEM and developers, it is a lose for consumers of the current game consoles.

Unlike something like an iPad, every generation of game console moves to a completely different architecture. This time around, Sony is moving from Cell to X86 and Microsoft is moving from PowerPC to X86.

I don’t expect either company to be able to provide backwards compatibility for existing games on the next systems. There is no way a consumer will be able to stick a disc in and have it just play.

Sony tried to provide backwards compat with the original PS3’s by literally including the chips from a PS2 in the box; this was expensive and not a success. This time, Sony has hinted that they may be able to solve the problem with game streaming; an interesting idea.

Platform owners want to sell you a new platform and if possible they want to sell you your favorite games all over again. Its an open question whether this will be a hurdle that customers will balk at.

Differentiation

If Sony, Microsoft and Windows are all providing essentially the same X86 hardware, how will these companies attract purchasers?

Some folks are brand-loyal. While most games will be multi-platform, there will be a few platform exclusive titles. If you want to play Halo, you will need an Xbox for instance.

I think the real selling point however will be the services. This is an area that I think both Sony and Microsoft are fairly weak in (in different ways) so it will be exciting to see this improve.

The first service is the user interface of the device. The main area of differentiation though will be the online features, including a store. Sony talked a fair amount about new services for the PS4.

Sharing, Streaming, Remote Play

Right off the bat, Vita owners will be able to pretend they have a (better looking) Nintendo WiiU. They will be able to play PS4 games on their Vita instead of on the TV. I thought this was a lame idea when Nintendo launched it and this has not change my mind but perhaps it will have appeal for some people. This is similar but different from Microsoft’s “Smart Glass”. Perhaps someone will find something creative to do with combining portable and dedicate hardware.

Sony talked about “personalization” and I thought “Amazon”. Doing this in their online stores is a no-brainer.

Changing the experience of the device to better match the interests of each customer sounds great. It can also be really difficult to implement and support but I wish them luck.

As a gamer, I buy these devices to do one thing: play games. I never want to see commercials for movies or music or things I don’t want; unfortunately those are the things these companies want to sell me. So there is an inherent conflict in the idea of “personalization” for this kind of device. Companies can differentiate by making different decisions on the balance.

Share

Sony talked for a while about sharing online. They purchased the game streaming company Gaikai and then went silent. It looks like they are trying to use that technology to add various types of streaming content to the PS4. It is exciting to see some new ideas being tried.

I don’t have enough gamer friends for sharing game recordings to be compelling to me but perhaps this will be a solid hook for younger gamers. A dedicated button for sharing content, a way to making game recordings, an online version of couch co-op. This is something new. Sony is not known for their skill in Internet services and the Internet is not a core experience for Japanese gamers as a whole but I am intrigued and hope they can execute.

Media devices and Instant-on

For years Sony and Microsoft have talked about taking over the living room with game consoles. They can play games and they can watch movies!

The “watching movie” market is much larger than the game market so this is an attempt to reach a larger audience, as mentioned earlier. However it competes head on with media boxes like the Apple TV and Roku. Watching movies over the Internet takes much less hardware to do well so dedicated solutions can be offered at a much lower price.

Years ago, we used a Windows PC to watch Hulu and ESPN3 on our TV. I also tried to watch ESPN on my Xbox360 but the PC was a better experience (and free). Then we started to use our PS3 for watching Netflix and Hulu. The experience with all of these devices was similarly lacking: Turn on the machine, wait for it to boot up, find the app, wait for it to launch, browse the app and start a show. It worked but…

Then I bought a $99 Roku and never used the PC or PS3 again. The Roku is tiny, low power (so I don’t feel guilty about the Earth), silent, and always on. I turn on the TV, the thing is ready to go. If I change apps, it takes a minute but there is no comparison to the Xbox or PS3 or Windows.

So I was impressed when Sony mentioned that they understood this complaint and that they are adding ‘instant-on’ to the PS4. If that really works, they might finally have media streaming solution I would use and we could get rid of one device in the living room.

Closing

All in all, Im enjoying the hype. Im excited to buy a next gen system. I know that execution almost always falls short of the hype but Im hopeful for entertainment this yet. The ps4 announcement was a solid effort. Sony Corporation has been having some difficult years but I hope the PS4 is able to find enough success to stay in business. This should be an entertaining year as the hype train has just started.

In 2012 there were a number of rumors about a "Steambox" from Valve. In Q4 2012 Valve released "big picture" mode for Steam. At CES this year, Valve sort of announced Steambox hardware from partners. While Valve is secretive about their plans, there is clearly something there that they are exploring.

However, many if not most of the podcast discussions I have heard seem misguided to me. I think people are largely missing the point of why Valve would even consider a Steambox.

Why does Valve need a Steambox? To be an independent gaming provider in perpetuity, Valve needs their own platform.

To understand the Steambox, you have to look at gaming platforms.

Think of a platform as a way to sell game entertainment to consumers. A platform is a hardware device consumers can purchase. That device includes an operating system and a service that lets one use the device and provides game content over the Internet.

There are 3 dedicated game platforms:

• Sony has the PlayStation 3 with the Playstation Network store
• Microsoft has the XBox 360 and Xbox Live service
• Nintendo has the WiiU and their online store
  

Sony and Nintendo also have portable game platforms, the PS Vita and the 3Ds.

In addition to the dedicated game platforms, there are non-dedicated platforms that run games as well as other stuff. There are way more non-dedicated game-capable devices than there are dedicated game devices. Microsoft and Apple have the largest install base of devices, traditional desktop computers. Microsoft has the Windows PC and Apple the Mac. Microsoft and Apple also have mobile computing platforms. Microsoft has the Surface tablet and Apple has the iOS platform, including the iPhone and iPad.

Then you have Valve.

Valve has a service for provisioning games online called Steam. Steam is a fantastic service and I would argue that it is a better service than Xbox Live, PSN, or the Apple App store. But it is only a service and not a platform.

Valve does not control the hardware or the OS for Steam. Valve depends on the platforms from Microsoft and Apple to run Steam. While the store has been very successful, Valve's fate as a platform provider is not in their own hands. They depend on the kindness and support of others.

By not having their own platform, Valve is vulnerable to the platform owners. Microsoft and Apple do not have Valve’s interests at heart; they have their own. If Microsoft decided to change Windows in a way that prevents Steam from working, Valve is screwed. Their interests may coincide now and a conflict may be unlikely but it is possible.

That is why Valve needs a Steambox. Not having their own platform is a business risk worth addressing.

Given that Sony and Microsoft are about to announce their own new platforms in 2013 and that both of those platforms appear to be based on Windows desktop-type hardware, this could be a propitious time for Valve to address that risk with their own product.

Supporting multiple platforms is a major expense for developers. The more different the platforms are, the larger the costs and the higher the risks of a buggy mess at the end. With Sony and Microsoft both moving to a PC-friendly platform, the costs of porting those two platforms goes down. If developers are already porting between two similar platforms, it is not much of a stretch for them to add a third similar platform. By offering a PC-like hardware device that runs Linux and offers OpenGL graphics, Valve could provide a developer-friendly platform that gets them into the conversation.

I think its clear why Valve needs a Steambox. I also think its clear that this is a good time to try if Valve wants to get into the platform game.

What is unclear still is whether Valve really wants to move beyond being a great service offered on platforms from other companies. What is also unclear is whether Valve can execute on such a plan if they decide to try. While Steam is a great service, building a complete platform is much harder than building a game or a service.

2012 was a significant year for me. While there was discussion and the occasional rumor about the next wave of dedicated video game consoles, I got mine.

I built a new Windows PC with an Intel CPU and an AMD video card, installed Steam, attached an Xbox controller, put it in my TV room and plugged it into my 55" plasma TV and stereo.

Later in the year, Valve released Big Picture mode for Steam. It was nice but not necessary. I already had my next-gen console playing games at 1080p and high frame rates. Skyrim never looked so good on an Xbox or Playstation. Games never cost so little on an Xbox or Playstation. I'm quite pleased.

In 2012, I declared that the next-gen video game console was already here and it was a Windows PC running Steam.

By January 2013, leaks of the next Sony and Microsoft game consoles started to hit in earnest. The industry is now expecting official announcements soon and the actual releases at the end of this year.

What do the leaks tell us about the next-generation video game consoles from Microsoft and Sony? Well, it tells us that the new consoles are Intel PC's just like the one I already have. Microsoft is leaving behind their PowerPC architecture and Sony is leaving behind the Cell.

Sony's 4th generation console is being called Orbis.

Microsoft's 3rd general console is being called Durango. This leak even included a system diagram. North bridge? South bridge? Yep, that sure looks like a Windows PC.

I look forward to more details on the new consoles because I love gear but what I have heard so far only confirms my feeling that the console industry has changed forever and 2013 will be a historic year. Converging to what is basically a single hardware platform differentiated by services will have big implications.

When I was a kid, I liked the Lakers. They wore yellow uniforms. They had Magic Johnson, and Worthy and Green. They weren't the Boston Celtics. LA seemed pretty cool.

Over the years things changed. I moved to LA and got over it. The Lakers drafted Kobe and Shaq and the Pistons got great again. I rooted for the Pistons and started to hate the Lakers.

Why did I start to hate the Lakers? Because the Kobe Bryant Lakers represented everything that is wrong with basketball.

Kobe is a "shooter", a scorer, a celebrity, a glory hound. But basketball is a TEAM sport. I love the pass. The extra pass. The unselfishness. The cooperation. I love the game when its a team game.

The Lakers on the other hand were all about stars, on the court and off. Kobe scores 40 points! Well that is because Kobe does not pass the ball. He gets the ball, and its him against the other team, 1 on 5. He gets the ball and forces up impossible shots. He is special because he makes so many of those shots but that's not basketball to me. Its boring to watch a ball hog and wrong-headed to reward one so lavishly with praise.

Kobe and Shaq were celebrities in a team sport and I wanted them to lose. The Lakers were an affront to the game because they symbolized stars over teams. And like stars, they had very public squabbles. Kobe wasn't giving Shaq enough respect? Whatever happened, they couldn't get along and Shaq went to Miami to get his own team to the finals. (I hated to Shaq too.)

And that is the way it was for years. When the Lakers were on TV, I rooted for the other team. I wanted to see a team defeat the stars.

But this season things have changed and I have started to enjoy watching the Lakers again.

At first I enjoyed watching them because the Lakers were (finally) losing. I loved to see them lose and to hear all the talk about them losing. It was an ESPN headline story every single night.

Kobe is still on Sports Center with his individual scoring but the team would lose anyway. Which is pretty much what they teach you in high school. Selfish play leads to better individual stats but team loses. Team sports are about teamwork.

It wasn't always easy to root against the Lakers though because they got two of my favorite players this year: Nash and Howard. That happened before when they traded Shaq for Lamar Odom but this was worse.

Since the Lakers are on TV almost every single night, I started to enjoy watching Steve Nash again. I always enjoy watching Nash. Watching him dribble and make the impossible pass. The Phoenix Suns with Nash, Stoudamire, Marion, Bell, Diaw, and Barbosa is probably my all-time favorite team to watch.

At the end of January, something changed again. I stopped watching for Schadenfreude and started to actually root for them because Kobe changed.

Kobe finally reacted to their losing and surprise, surprise, started to pass the ball. Instead of talking about their losing record, Sports Center started to talk about how many assists Kobe got in a game. He was still being singled out and praised for individual effort but the team started to win games.

All of a sudden I was enjoying the Lakers because they have Nash and Clark and Superman AND they pass to each other. They started to play like a team instead of like an odd assortment of overpaid sport celebrities. Basketball is a team sport and perhaps even the Lakers have figured that out.

But will it last?

By February, the wheels started to fall off the whole "Kobe is a team player" experiment. Gasol had his minutes cut and then he got hurt. Howard got hurt. The team lost some games. And Kobe lashed out at Howard on TV and over twitter. Twitter?

That is when I realized that Kobe was having to face yet another lesson from basketball. What does it say about you if your team has a losing season? If your team loses, are YOU a loser?

Its a painful thought but one you have to face to grow up. And one most star players face at the start of their NBA careers. LeBron in Cleveland. Vince Carter in Toronto. KG in Minnesota. The draft sends most stars to the worst teams. But not Kobe. Drafted by Charlotte, he was immediately traded to Lakers to play with Shaq and they were winners from day 1. He has never had tough times. He has always been the "star", the famous one, the golden child, the Sports Center highlight.

Being on a losing team challenges your mental toughness. Every real star eventually has to lean on his team to win. At some point, every player has to learn that lesson or face losing teams forever.

Kobe is still a young man. I will enjoy watching the Lakers more to see whether he matures and embraces his team or decides to go it alone and blame others. Im tired of the personal squabbles, the blame-game, the drama, but Im hopeful the game will triumph in the end.

Back in the early 1990's, one of my favorite authors was David Brin. "Startide Rising" and "The Uplift War" were two of my favorite books. Then Im guessing he had kids because his books got children characters (which I loathe) and then he stopped writing novels. I haven't read a Brin book in years and occasionally wondered what he was up to.

Friday he spoke on campus and I was thrilled to finally see the man in person.

After pimping his new book for a while, he veered off into a pleasant discourse on American politics and human development. It reminded me that there are smart, educated people who really think about the world and how it should be. (Politics is where smart, educated, thoughtful people ought to go when they grow up.) It reminded me that some people think about more than their level and whether they can deliver featureX on scheduleY. While his talk was a little ADHD, it was refreshing and inspiring.

As a futurist and government advisor, Brin seems to get around, way more than anyone I actually know.

He told a story about woman who was found dead after the Japanese tsunami. She was buried alive under rubble and when they found her, they found her cell phone filled with text messages trying to tell someone where she was.

He used this anecdote to point out how the technology we depend fails when it is most needed, ie during a crisis. Brin talked about meeting a Verizon executive and trying to convince them that they should modify the phone technology so it could work during a disaster. His story ended with "not hearing from that executive again".

A self-described optimist, Brin talked about the golden age we are living in and the immense creativity that is unleashed by capitalism. I found it intriguing stuff but also a bit sad as illustrated by his phone story.

Capitalism has no guiding force other than greed. Our cell phones fail during disaster because there is no business case for them not to. No profit = no functionality unless individuals make it otherwise. If more people heard about that story, phones might change but most of the big challenges are more than one person can impact.

Dont think so? Look at health care in America.

Our system is such a dysfunctional mess because it was never actually designed for a purpose in the first place. As a symbol of the capitalistic system in the world, Intelligent Design is sorely lacking from just about any system that was not enshrined in the Constitution or Bill of Rights.

Our health care system actually evolved from the tax code. Employer-paid health care was created by a tax break for companies during World War Two. It was devised as a way to attract workers during a worker shortage when most men were drafted into the army.

Why doesn't it cover everyone? Why isn't it a single-payer system? Why does it cost so much and waste so much money on paperwork and redundancy? Because the whole thing is an accident shaped by the forces of capitalism and thousands of independent actors pursuing their own self interest. Looked at from a historical perspective, the situation makes sense but it is still a mess. A rational person would expect that something as important as a health care system would have been designed based on desired outcome. Instead we have a six decades of patches on patches on patches on unintended consequences. And given the GOP's behavior on "Obamacare", I see no evidence to suggest things will get any better for anyone.

While I agree with Brin that capitalism is a strong creative force, I am less optimistic that capitalism without some guiding moral force will lead to positive ends. Evidence of any benevolent force seems to diminish with each presidential election and each generation.

Brin talked about other interesting stuff as well such as the evolution of human organization. From tribes, to hierarchies, to governments and back to tribes. He talked about major forces of enlightenment and rational thought. He threw in a number of political zingers against Libertarians, Republicans and Liberals. He talked about privacy and freedom (the theme of a non-fiction book he wrote in 1997). He was kind of a shotgun of ideas.

All in all, it was a great hour.

Hmmm. My last post was September 2011; about 9 months ago. I guess it has been a while. Why the break?

September 2011 was the month my second daughter was born. This one doesn't sleep much.

I still have a busy day job and I have been seriously remodeling my house since I purchased it 2 1/2 years ago.

Nine months and it went in a blink.

While I have stopped writing, I have not stopped thinking. And lately I have been thinking that I should do some more writing.

So let's see if that happens. I need to blow the dust off my blogging tools and publish.