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In-Depth: Sony Threatens Microsoft's Non-Gaming Dominance
In-Depth: Sony Threatens Microsoft's Non-Gaming Dominance
November 17, 2010 | By Chris Morris

November 17, 2010 | By Chris Morris
More: Console/PC

[As Sony announces a tie-up with Vudu for HD movie streaming, Gamasutra editor-at-large Chris Morris looks at how the PlayStation 3 creator has started to gain ground on Microsoft's array of on-console media content -- the next big battlefield for game consoles.]

Long before Kinect, Microsoft had its own way of courting the non-gamer – offer functionality on the Xbox 360 that was unique enough to lure in people who weren’t interested in the latest Halo installment. And it was a pretty effective method.

With Netflix integration leading the charge in 2008, the Xbox 360 finally fulfilled the dream of the console as a Trojan horse of the living room.

It gave the company a huge competitive advantage for a while, but recently that advantage has been slipping away. Sony, in particular, has gained a lot of ground in that battle and is threatening to overshadow Microsoft’s achievements.

The latest blow comes with today’s announcement that the PS3 is adding the Vudu HD streaming service to its arsenal later this month.

Owned by Wal-Mart, Vudu is a viable competitor in the film streaming marketplace with day and date releases consecutive with home video (as opposed to, say Netflix, which primarily streams catalog content).

The PS3, of course, has had Netflix since 2009 and recently integrated the service onto its dashboard (as Microsoft’s exclusivity window for that sort of tie-in expired). It’s worth noting, though, that PS3 users were able to search for Netflix content before those on the 360.

The PS3 is also currently the only console that offers access to Hulu Plus. While that streaming service has come under fire during its beta period for high prices and embedded advertising, it’s still something that has generated tremendous consumer interest. (And the rumor mill suggests that $10 monthly fee may come down to $5 as the service becomes more widely available.)

Microsoft is hardly standing still, recently launching ESPN content for Xbox Live gold members, with 3,500 live and on-demand events coming to Xbox Live, ranging from college football and basketball to soccer, major league baseball and NBA games. Given the demographic crossover between sports and gaming, that could be a major draw.

It also has an exclusive tie with, though a very unscientific survey of posters on the forums of a large gaming site, indicates that usage of that service is moderate at best – with several users not even knowing what exactly what is.

The company has also vowed to add Hulu Plus with “signature features” next year – but its heart just doesn’t seem to be in the fight quite as strongly as it used to be. Once a year updates are fine, but don’t convey a sense of urgency and excitement. Sony, with its more rapid release schedule, appears to be making the integration of this non-gaming functionality a priority.

“I think it’s a mandate with Sony not to just catch up with, but to surpass Microsoft, especially in the non-gaming functionality,” says Billy Pidgeon, senior analyst with M2 Research.

“What’s at stake here is the future of Xbox Live and the PlayStation Network, … We’re going to be seeing more houses where there are two or more consoles - and the battle will come down to where do (non-gaming) family members spend their time?”

What’s ironic about the Vudu integration is that the service will compete with Sony’s own online movie store. Given Vudu’s owners, though, it’s still a smart move to make. Having Wal-Mart obliged to you as you enter the back half of a console’s life cycle is never a bad thing.

“I think it’s kind of smart of them to do this,” says Pidgeon. “It’s better to give people more options. [Vudu] does compete against their own service, but it helps Wal-Mart and Wal-Mart will help Sony. It’s coop-etition. This is the point in the lifecycle where people should be experimenting with things - and if Sony is able and willing to do that, then I see that as a positive.”

With the launch of Kinect and Move, the focus of the battle for casual and non-gamers has turned back to the gaming arena – and that’s certainly something Microsoft and Sony are more familiar with. But by offering non-gaming entertainment, the companies open their systems up to a much wider audience.

And given the ground the PS3 has to catch up with, that focus is a sound one. Life-to-date, the 360 has sold 21.9 million units, according to NPD research shown by Nintendo of America president Reggie Fils-Aime at an analysts’ conference last week. The PS3 has sold 13.5 million.

“Sony has a lot more ground to cover,” says Pidgeon. “They’re in more of a catch-up mode. And I can see them doing something further along these lines – like striking a deal with Google for Google TV [integration].”

Interestingly enough, Google TV is already integrated into select Sony TVs. And cross-system pollination is a priority for Sony, which makes that idea a viable one in theory.

On the whole, Sony is lagging behind in the DLC world – and it knows it. With the gaming audience open to buying and streaming content online, the PS3 is a natural candidate to lead the charge – something that has not gone unnoticed in the executive suite and may be behind the ongoing push of non-gaming features.

“Sony has got to get digital and has got to get networked,” notes Pidgeon. “That’s from [CEO Howard] Stringer on down.”

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Jamie Mann
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Hmm. In the red corner, you have Sony, with access to significant amounts of "in-house" media and strong relationships within the entertainment industry. However, they also have significant internal divisions (both regional and political - media vs hardware, for instance), which have already led to major issues with their home-user offerings, ranging from the heavily crippled Minidisc to the inconsistent presentation and availability of DLC via the three regions. They also have a fairly clumsy marketplace on the PS3.

In the blue corner, you have Microsoft, who have to licence all of their content from third parties, with whom they have limited history and relationships - and significant chunks of their offerings (e.g., facebook) are only available to people willing to buy a Gold membership. However, they also have a much more consistent policy across the regions and a much better integration of their marketplace on the Xbox 360 - all games have demos, all movies have trailers, etc.

Then you have Nintendo, who have only paid lip service at best to networked features.

It's a tough call.

In essence, the console is going the way of the PC (via way of the iPhone), in that they're becoming a platform on which third party apps are deployed - or at least that's what Sony and Microsoft seem to be aiming towards. However, I'm not convinced the current generation of consoles have the architecture to manage this properly - aside from the question of horsepower, they're also crippled by political/commercial considerations. For instance, the Xbox 360 is lacking a web-browser and you can't multitask , so there's no way to check Ebay or stream music via while fragging aliens!

Does it make sense to compete with the PC? Perhaps: if nothing else, a console can offer an integrated, simple solution which plugs straight into the TV and is designed around a handheld controller/remote. However, Moore's law (and software development) keeps marching on in the PC world while the console stays relatively static...

Gaming Droid
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What is not considered at all that have made hardcore gamers move away from PC to console gaming despite PC's advantage almost across the board with better hardware, open and free online play, plenty of third party applications and finally cheaper prices than consoles. Why is it then that console continues to take away PC marketshare?

The answer is presentation and ease of use!

This is the one reason why Xbox Live service is considered ahead of Playstation Network despite one being a paid service and the other free. Content is important, but almost never more important than ease of use.

That is why I use and pay for Xbox Live and I believe that is why Apple products continues to trounched the competition and why Google TV is likely to be a hit. Simplification is key.

John Paul Zahary
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You hit the nail on the head with simplification, Gaming Droid. - That is why the Wii was such a hit with non-gamers and why Xbox Live became a staple in my house and others despite the service charges.

I was conversing with others on the state of the PC and whether or not its format is dead - by far it is not, however, when someone can sit on their coach and have everything organized in front of them without having to worry about buying graphics cards or paying additional services for specific online games on top of internet (even though live has its points that you have to purchase).

I am looking forward to see how Apple will eventually move into everyones living room and of course Google TV.

Alan Rimkeit
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Hey Sony you know what I want on my PS3 video streaming service? Adult oriented show from Showtime and HBO that is what! Heck, even AMC too! The Walking Dead, Dexter, and the upcoming shows like Camelot from Starz and Game of Thrones from HBO would get me to spend cash. Give me the option of getting those shows and it will be like getting the a la carte cable companies like Comcast and Cox refuse to give us consumers. Then I will be a happy user of the video services Sony wants me to use. Until then I am not really that interested.

If Sony could get exclusive deals to shows like Dexter it would be a coup of monumental proportions!

John Paul Zahary
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Wasn't Sony considering showing more adult content but recently reneged on it?

wes bogdan
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Design wise the wii and ds lite look very apple so if apple wants the living room why not buy nintendo.

Nintendo has great iconic series while apple has none. Then we might see ms and sony team up to fight applenintendo.

Who wouldn't want to see apple's logo on the next wii?

Banksy One
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"Sony has gotta get networked?" Maybe they should start with connecting their Playstation brand to its history and see where that lands them. Ignoring backwards compatibility with software and hardware, neglecting the PS1 catalog for the PSP, not bothering to change their controller (besides sixaxis which was underused). Come on really, why don't you just turn the Playstation into a media hub and let Nintendo handle your gaming department for you?

Reader, indulge yourself in the facts and you will see that Sony have made their gaming department successful on the backs of men like Richard Stalman, Kutaragi, Phil Morrison, and every major Japanese 3rd party game developer. Nintendo have also had their figureheads, but the difference is that Sony corporation never had the same incentive as Nintendo. Sony's entry to the market was for expansion, whereas Nintendo's was for survival. Thats where it becomes apparent that the PS3 is not a gaming console, at least not in the same way that the Wii is a gaming console. Nintendo still make half of their revenue from their games, and it shows in their concerted effort to expand the market. What is gaming for Sony and Microsoft? Sony becoming more connected? Its basically Stringer saying that they need to develop as many film/tv series/online media publishing deals as they can for their console.