JULY 25, 2007 • In the console hardware battle one of the key distinguishing features is software that is exclusive to a particular platform. Therefore, DFC intelligence is taking a close look at the software develop- ment efforts of Sony, Microsoft and Ninten- do. This month we thought we would focus on the PlayStation 3 (PS3) and titles be- ing developed for the platform by Sony Computer Entertainment.

Sony’s in-house products are being developed by the division known as Sony Computer Entertainment World- wide Studios (SCE WWS). SCE WWS was formed in September 2005. Previously, each world re- gion was served by its own studio. As part of Sony’s overall strategy to break down the ‘silos’ of its operations, SCE WWS overseas the development and publishing of global ti- tles by directing the activi- ties of the regional components. It is headed by Phil Harrison, the for- mer executive VP of Sony Computer Entertainment Europe.

The PlayStation 3 is clearly the most powerful console system in-chan- nel today. However, the attitude of many third-party publishers is to keep economics in control by not only developing for multiple platforms, but also creating titles that are primarily the same across platforms. This is particularly true for PS3 and Xbox 360. With the exception of Konami’s Metal Gear Solid 4 for 2008, this means that it is imperative on Sony to be the one to develop titles that truly show the power of the PS3. The pressure is really on SCE WWS.

Ninja Theory’s Heavenly Sword.

The good news is that Sony has a solid track record of delivering prod- ucts across a wide range of genres. This also includes monster hits like the Gran Turismo series, and new recent hit franchises like Gods of War and SingStar. Furthermore, SCE WWS clearly lives up to its name and has a strong development presence in all major markets around the world.

On the downside, it is clear that it may be awhile before the full breadth of Sony’s development efforts for the PS3 are made clear. A great deal of the product is being developed for 2008 and beyond. In fact Microsoft made a major point to highlight this difference by stressing that all the Xbox 360 products being shown at E3 were for release in 2007. Nevertheless, Sony has a solid lineup of PS3 products for 2007. There is clearly no Halo 3 in the bunch, but there may be enough to make many fence sitting consumers take a close look at the PS3.

Perhaps one of the biggest cards up the PlayStation 3’s sleeve is the strength of its online PlayStation Network. Sony is putting a great deal of development into online game features. This includes not only online features in retail games but also some very high quality looking digitally distributed content and the high profile PlayStation Home virtual com- munity. It appears that by the end of next year much of Microsoft’s perceived advantage in online games may be nullified by Sony’s efforts on the PlayStation Network.

However, we stress that many exact details about the products (release date, price) were sketchy. Sony did say that over 80 downloadable games are in development for the PlayStation Network. This includes games from some very small developers such as Q-Games with Pixel Junk Racers and Everyday Shooter, an award winner at 2007’s Inde- pendent Game Festival. It is expected that many of these products will be available for $10 or less at the PlayStation Store. Of course, Sony has also announced that they will be working with Nielsen to provide tracking data for in-game advertising. This could eventually raise some concern among consumers that pay $500 for a box that provides free online game play, but with the caveat that you have to endure a whole bunch of intrusive advertising. In the end, we will hold judgment about whether online games will have a major impact on consumer purchase decision this console cycle.