Or, Sony’s Game Theory

I’ve always wanted to love Sony, and the only thing that stops me is Sony itself.

Take, for example, their VAIO line of computers. Amidst a glut of ugly, clunky Dells on the one hand, and beautiful but enterprise-challenged Macs on the other, the VAIO has always occupied a sweet spot in my heart. “Well, if one has to work on a PC,” I reasoned, “that’s the way to go.”

But I’ve never owned one, because the VAIO’s more-elegant-than-your-average-PC design has always been offset by a few annoying and consistent qualities:

1. The VAIO is significantly pricier than comparable PCs made by other companies
2. Sony often includes proprietary hardware that I don’t want (like its “memory stick“) rather than more widely-accepted versions of similar technologies (like the SD card).
3. They bundle the operating system with clumsy software that makes the computer hard to customize and often harder to use.

(And I find this to be generally true across Sony’s product lines: even the software for setting up their “Bravia” TVs is just a little bit too … something, and not enough … something else.)

Two more recent examples of Sony being its own worst enemy might be Blu-ray and the PlayStation3, technologies which live in symbiotic relation like the clown fish and the sea anemone. (The Blu-ray lures customers toward the PS3, and the PS3 paralyzes them…?)

Blu-ray is the Sony-owned version of “next generation DVDs.” The Blu-ray was in toe-to-toe competition for a while with “HD DVD,” a format so similar to Blu-ray that even the marketing copywriters sometimes had trouble explaining the difference to consumers. Finally, the “Next-Gen DVD Wars” ended in early 2008, when movie studios and retailers opted to back the Blu-ray format over its competitor.

Market analysts reasonably guessed that the end of HD DVD was good news for Sony, and would mean a belated ascendancy of the company’s lagging, expensive PlayStation3 game console. At the time, the PS3 was suffering from poor sales, disappointing reviews, and (despite being the most expensive game console on the market) was being sold at a per-unit loss: Sony actually lost money each time they sold a PS3 at its retail price, because the cost of the hardware was so high.

But on the plus side, the PS3 was the cheapest Blu-ray player available. Anyone curious to check out next-gen DVD could essentially pick up a player and get a game console thrown in for free.

All Sony needed, then, was a strong retail season (i.e., Christmas) during which they would flood the market with PS3s and get Blu-ray players into living rooms around the world. Movie sales would follow. The future, it seemed, suddenly belonged to Sony.

But now that Christmas retail data is available:

Early results from this holiday season aren’t promising. U.S. sales of the PS3 fell 19% last month from a year earlier, while sales doubled for the Wii console and rose 8% for the Xbox 360, according to research firm NPD. Analysts say they expect PS3 sales for this month to be flat or lower than last year, while sales for its rivals are likely to rise. (Quoted from the Wall Street Journal.)

One reason for this: there has never been consumer demand for “next-generation DVD”. The technology, and the resulting hype, were created despite the fact that a good, old-fashioned DVD, played on a high definition television, looks awfully good.

So while Sony has been working to ram its unwanted product into the living rooms of consumers (cf., the memory stick), some of the “losers” of the Next-Gen DVD War (like Microsoft) have been working to deliver high-definition video to consumers, on demand, over the Internet, without need for any disc at all.

You can even play them on your Xbox.

If you build it — and they want it — they will come.

Can you think of a reason to buy a Blu-ray? I’d love to hear it.