Monday, June 6, 2011

E3 2011 Day One: A Wilting Industry

Oh god, not this shit again.
Oh hey, it's Electronics Entertainment Expo time again. Is the industry any healthier this year than it was last year? Not at all. Can you skip over this first post on the continually declining relevance of Sony and Microsoft? Probably. Everybody's known for years that the Playstation's years as the "hot brand" in gaming are over, and the XBox line never was. Still, here I am blabbing at you. Why do I do this? Compulsion, maybe. I'm so sorry.

At any rate, I'm going to try to keep my E3 posts a little saner this year than the ones from last year, just to get the post done and ultimately move on. Better for my own time and sanity. First up, just some quick thoughts on Sony and Microsoft's showings. To say the least, I wasn't impressed.

Microsoft and Sony have already held their conferences, of course. Microsoft pimped Kinect, Sony pimped Move, and neither peripheral is the Wii, let alone disrupting the Wii. Once again, literally flailing at relevance again this year. The rest of their lineups was nothing all that notable either - nothing that would surprise you if you were familiar with either, since at this point, a good 5-6 years into this generation, they're relying on redundant game releases and over-sequeling to the point at which their conferences were just a combination of boring and embarrassing.

Microsoft's facing internal calls for the ouster of Steve Ballmer after the company was passed not only by Apple, but now by IBM too. As of this fall, they will have been in console video gaming for 10 years with the XBox line, and despite the persistent media popularity and the brand's vocal online following, they've only taken a net loss in billions of dollars, never having been able to turn gaming hardware into a profitable front, and they've suffered catastrophic losses due to all kinds of hardware issues this generation. Kinect has done nothing to dig them out of that pit. Their E3 conference this year showed nothing game-changing and nothing that would inspire confidence that they're going to dig their way out of their financial hole. Their more 'traditional' games aren't moving hardware and are turning into a string of unremarkable sequels that the press squeals over, but then, the press has a history of squealing over virtually every major or hyped XBox 360 and PS3 game this generation, rendering gaming "media" hype ultimately worthless, given that virtually all of it has been known for years to be paid shilling. At this point, it's hard not to think that the XBox line won't be going the way of the Zune sooner than we think. If Microsoft has any competent businesspeople left, it will be.

In Sony's case, the PS3 has been an even bigger catastrophe overall, with ridiculous development costs like the XBox 360's that have ensured that in many cases, games can sell over a million copies and still fail to break even, let alone actually turn a profit. And most games on both those consoles have failed to sell anywhere near the million mark - most games on the platforms have ultimately taken painful losses, and the third parties, remaining foolhardily loyal to Sony and Microsoft despite their poor financial standings this generation, are running incredibly ragged right now. Third party lineups this E3 have been the weakest I've ever seen them. I'd feel bad for the industry if the situation wasn't self-inflicted. Sony's response? Introducing the Playstation Vita - formerly the NGP - essentially the PSP2, which boasts of graphics and hardware power (And ultimately development costs) comparable to the PS3, and Sony's trying to be competitive by selling it at such a loss that it's guaranteed to lead to billions in losses and further incredible instability in the company, all the while, its lineup at unveiling was nothing less than pathetic. Especially when compared to the incredible lineup and set of games Nintendo had ready to show for the 3DS at its unveiling at E3 last year. Third parties bet on the 3DS over Sony's PSP, which failed outside of Japan and largely sold as a multimedia device in Japan, with only a select few franchises turning a profit on it. (And most games suffering horribly due to an incredible piracy problem.) After trying to join with Sony and Microsoft to push customers away from the Wii bled third parties as badly as they did, betting heavily on the 3DS was the first smart third party call in quite a few years.

Sony's stock has been heading toward circling-the-drain territory since a series of major hacks dating back to mid-April took the Playstation Network down, and over the following weeks, every PSN user's private data stored on the servers was stolen. And then all of Sony's other online services were hacked, and their users' private data was stolen from those as well. As it turns out, Sony wasn't very interested in protecting their users' information - credit card numbers and more! - and was storing a tremendous amount of very, very sensitive user information in plain text, without any kind of encryption. In the weeks since, Sony has been scrambling to do as much public image control as it can, while doing as little as they can possibly get away with to make it up to their customers or actually secure their information. The very amusing hacktivist group Lulz Security - otherwise known as LulzSec for short - has been making headlines with their hacks in recent weeks, and not a week has gone by in which they haven't hit Sony at least a few times. Sony hasn't begun working on their security, and apparently breaching them is child's play - going on LulzSec's online testimonials. Ultimately, Sony's made it clear that they don't take safeguarding their customers' sensitive information remotely seriously, and think they can placate all those compromised by these regular hacks by the least they could possibly offer up in giveaways that they wouldn't take a real loss on by giving away.

As such, Sony's stock has been trending downward daily for over a month now, and their E3 showings this year don't stand to change that course. The Vita doesn't stand for anything the company or the industry needs to move forward in a new, healthier direction. And the near-daily to outright daily hacks are going to continue to undermine consumer confidence on every front, as they well should. By failing to make any effort to secure customers' sensitive data, Sony has demonstrated a disgustingly cavalier attitude toward their customers, and reminded further why their brand has been crumbling across the board in recent years. A lot of people are never going to buy Sony products again after this - I'd be among them if they hadn't shown me their character even sooner than this and convinced me that they were a corporation in no way worth my continued patronage - and this isn't a new trend overall. They've fallen behind all over the place in recent years, having developed a reputation for overpriced electronics that can easily be found both cheaper and better quality from the competition. They made no friends with their CD rootkit fiasco as well, having intentionally planted malicious malware in their customers' computers with CDs. Sony's future in gaming looks no rosier than Microsoft's. They can't sustain the incredible losses they've been taking for years, the Vita will do nothing to change that, and LulzSec's hacks will only continue to wound them more deeply. Looking back, I'm increasingly convinced that the smash successes of the Playstation and PS2 were flukes easily allowed by Nintendo and Sega's failures at the time, and that Sony really doesn't understand the video game industry, video game hardware, or the average gamer customer - who isn't the type to spend all their time foaming at the mouth on online forums over the latest shooter. All the successes of the first two Playstation consoles did was imbue them with a sense of entitled callousness toward their customers that makes them completely deserve the mess they've gotten themselves into.

In the end, Sony's PS3 games were built largely around trying to push their failed Wii Remote rip-off peripheral, "Move," just as Microsoft spent most of their conference trying to push Kinect, while most of the industry isn't getting behind it all that much, and most Kinect games haven't sold all that well. Sony and Microsoft simply continued last year's trend of thinking they could make the customer think their systems were "better Wiis." This tactic hasn't worked for either company, and is largely revelatory of the truth of their increasingly dire situation in the industry. The Vita won't do anything for Sony but lose a tremendous amount of money, given that they have to be eating a significant amount of money per unit sold at the announced $250 pricetag, with an incredibly weak lineup so far, set to launch this holiday season, by which point the 3DS is going to have a killer game lineup on shelves and be the better deal hands down - as it stands with even its current library, the 3DS already is. As things stand, a sense of desperation has hung over this year's E3 so far as two of the three big companies have struggled toward relevance and profit, their platforms having yielded the most dramatic financial losses the video game industry has ever seen. Nintendo successfully disrupted Sony with the Wii and 3DS, while Microsoft has clearly never understood what they were getting into with the XBox in the first place. The industry tried to reject Nintendo despite these successes, and now the third parties are running ragged, profit margins the thinnest they've ever been and more games than ever leading to huge losses. The industry's trying to contract inward and only becoming more conservative in response to change it rejected, and that is visibly destroying it.

Whether or not this will lead up to a second great industry crash after the one following the era of Atari and Colecovision remains to be seen. If it happens, it will be one that the industry chose to inflict upon itself in attempting to reject Nintendo's return to the top in the industry, their widening of gaming's audiences again with the Wii and DS, and the addition of features vital to the evolution of the video game experience: motion controls in particular. Sony and Microsoft are a long ways down their self-destructive paths - neither company seems to have learned a thing, and both have suffered enough financially from their respective catastrophic consoles this generation that either of them turning things around is entirely unlikely. Big conservative corporations like Sony and Microsoft aren't good at being forward thinking or adapting to change - when product lines fail (Microsoft isn't likely to keep the XBox line going too much longer now that they're coming up on a decade-plus of billions in losses to show for their video game console venture.), they're cut off like the gangrenous limbs they become. Microsoft did just that to the Zune not long ago, and financially, despite the investment made, there really isn't a good argument for continuing to push the XBox line forward in light of its continued incredible losses. There's no reason anyone should be confident that will change. Sony has simply allowed their own hubris and utter disregard for their customers to destroy them this generation - they've made it abundantly clear that they've learned nothing from their mistakes, and the companies that continue to swear a pointless fealty to them will sink with them. The Uncharted series is not the magic bullet they think it is. The proof is in the franchise's sales, and its proven inability to move hardware. Most people aren't looking for linear 3D Pitfall meets shameless Indiana Jones ripoff, more interested in looking and feeling like a movie than being a good game.

At any rate, Nintendo's big conference is the only one remaining in just over 12 hours now. There, we'll see whatever they have to show for the Wii and DS as they enter their final days, more secrets, surprises, and big new games for the newly launched 3DS - which I have yet to get my hands on, but am definitely jonesing for after playing Pilotwings Resort on a demo unit, knowing what's going to be coming out in the coming months - along with a more solid release schedule for all their games for the rest of the year. On top of that, they're going to unveil Project Cafe, the only relatively recently confirmed successor to the Wii, which may be launching a little over a year from now, assuming there's any truth to the word so far. Motion controls will be sticking around and evolving further, but from the sounds of things, there's going to be an interesting touchscreen controller of some sort too - where Sony and Microsoft demonstrated thoroughly this year just how low they've sunk and how low they've taken the industry's third party game developers by now, Nintendo stands poised to dominate E3 yet again, as they have a history of ever since the DS and Wii reveals midway into the past decade. Where Sony and Microsoft are ailing, Nintendo is at their financial best yet, and have rediscovered the importance of appealing to wider audiences - as well as returning to the fundamentals of older style gaming, the loss of which has damaged the industry as a whole, with things like the 2D New Super Mario Bros. games, Donkey Kong Country Returns, and Wii Sports - and fresh off a strong 3DS launch, they're in a good position to become the only major player in the console and portable sides of the industry sooner than most realize. This, of course, is ignoring Apple, but their role isn't quite the same in the gaming scene either - more complementary than directly competitive, but still a company to keep an eye on nonetheless.

After a depressing first day for E3 2011, tomorrow is where things get interesting.

1 comment:

Eric said...
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