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LGS: PS3's Business Strategy Dependent on Niche Market

At his keynote address at the 2006 London Games Summit, Sony Computer Entertainment Worldwide Studios [Europe] Vice President Michael Denny outlined Sony's belief that the future of game publishing is, more than ever, in the hands of the consumer.

The speech focused mainly on online issues, such as digital distribution, stating that broadband usage has majorly penetrated the computer market, and that its growth shows no sign of slowing.

"It is becoming unlikely that any new computers purchased will not be used standalone, without the internet," said Denny. "This is how we feel about the PlayStation 3."

Denny's speech argued that a major change in how developers and publishers make games will be driven by consumers. "They have more choices, want better things, and have louder voices," he said, giving the example that within one month of iPod Video launching, it served over 1 million videos, and that within two months of the European PSP launch, over 700,000 files were downloaded from yourpsp.com.

Denny reminded his audience of industry professionals of the standard "80/20 rule" of entertainment products, which states that 20% of products account for 80% of sales and, typically, 100% of profits. He followed this up with a newer rule, the "98 percent rule."

A digital jukebox company called eCast, he said, reported that in 2004, out of the ten thousand tracks it offered on its digital download service, only two percent were never played. Those 9,800-plus tracks were, of course, not composed entirely of hit songs. This, he says, is tangible proof of an emerging niche market, which is finally - collaboratively anyway - competing with the major hit market...

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gamasutra.com
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calderra4008d ago

Random points:
-His "98 percent" theory is called "the long tail" by the industry, and I think someone's already won the Nobel Prize over it. It's basically the leading theory on the "new" business marketing model in the world. Little late, dude.

-"It may be in the new era that consumer is king"
=UHhh.... since when was the consumer NOT king? Were systems ever able to be sold without the consumer? Oh that's right... "We expect to sell the first 5 million consoles even without games".

-The new niche market will not replace the traditional market," said Denny, by way of concluding remarks. "However, they will start to share the stage with them for the first time in a very significant way.
=Like Katamari Damacy? Ico? Loco Roco? Guitar Hero? 90% of the Japanese market? (rattles of tons more)

The guy's trying to sound like he's saying innovative things, but there's basically nothing new in there. And even if there is, it's already been worked to death by Nintendo and Microsoft execs.

Sorry, but I'm a little tired of the "moving away from non-traditional gamers" stuff coming out of execs these days. From ALL sides.