By Ian Sherr and Daisuke Wakabayashi
More than a decade ago, the Sony Corp. executive credited as the “Father of the PlayStation” predicted that one day videogames wouldn’t require a console, because the hardware would eventually “melt” into a network that linked players together. All they would need, Ken Kutaragi said, is a display and a controller.
As Sony prepares to take the wraps off a new home console, it will take one major step closer to that vision. The Japanese electronics conglomerate’s next PlayStation will allow users to play games streamed over the Internet as well as on discs, according to people familiar with Sony’s plans.
The new feature is one of many expected on Sony’s next game machine, which is slated to be unveiled at an event in New York on Wednesday. But the addition of streaming exemplifies how the videogame industry is searching for new ideas to cope with dramatic shifts in technology and consumer behavior.
Videogame companies like Sony, Nintendo Co. and Microsoft Corp. used to depend on their twice-a-decade launches of new living room consoles to spur a new wave of spending on consoles that typically cost hundreds of dollars and games priced at about $50 or more. But the Web, mobile phones and tablets have spurred the creation of new, more convenient ways to play games free of charge or for a few dollars.
The results have been dramatic. Sales of new titles, consoles and videogame accessories at U.S. retail stores have contracted every month for more than a year, according to industry watcher NPD Group.
Though both Sony and Microsoft are expected to introduce new consoles this year, consulting and auditing firm PricewaterhouseCoopers expects global spending on console games will shrink nearly 1% in 2013 and rise only 3% next year—far less than the 28% growth the industry saw in 2007 after the last batch of new consoles were released.
Meanwhile, sales of smartphones and other mobile devices have exploded, creating a huge market for inexpensive game apps. Apple Inc. said in January it has sold more than 500 million iPhones, iPads and iPod Touches since 2007, eclipsing cumulative total sales for the three major home consoles combined.
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(Published Feb 18, 2013, in The Wall Street Journal.)