Sony’s PS4 Launch: Too Little Too Soon?

Sony unveiled its PlayStation 4 video game system this week — sort of. It didn’t display the console itself or reveal its physical dimensions and form factor. It also left unanswered a raft of questions about its capabilities. How compatible — or incompatible — will the PS4 be with Sony’s current-generation PlayStation 3 system, for example, which was launched in November of 2006?

Given that the PS3 has an install base of about 77 million, it is unlikely Sony will stop supporting its aging console anytime soon. However, what isn’t clear is which PS3 software — whether discs or PlayStation Network purchases — will actually work on the PS4.

“Lack of backward compatibility means PS4 will not play PS3 games,” said Michael Pachter, managing director of equity research at Wedbush Securities. However, “there is no issue with PSN titles — those are downloads.”

Compatibility Confusion

The PS4 will take advantage of cloud-based services, and Sony has said that games purchased through PSN could carry over to the PS4.

It is possible that Sony could either provide a direct transfer of PSN titles or allow owners of both systems to access their downloads via the Gaikai-powered cloud server.

The big question is why would Sony make it impossible for PS3 packaged software to play on the new system?

When it launched, the PS3 could play PS2 titles, just as the PS2 could play original PlayStation games. This type of backward compatibility shouldn’t be that hard to provide.

“It will have enough power to do so,” said Rob Enderle, principal analyst with the Enderle Group. “They’ll just need to create a VM or emulator that will accept the games, and it would be a no-brainer to do that in order to sell more consoles.”

It is unlikely that Sony will cut support for the PS3 once the new system arrives, which again prompts the question why the PS4 couldn’t be made to play PS3 titles.

“Sony can’t just shut off the PS3,” said Billy Pidgeon, senior analyst at Inside Network. “That system has a huge install base, whereas the PS4 is going to be a fraction at launch.”

Hardware Improvements

While many questions remain, what is known is that the PS4 promises to be a far more robust machine — and this could mean more titles out of the gate.

“The system is built on a PC chipset, so it will be far easier to develop for,” Pachter told TechNewsWorld. “Easier means lower cost, and lower cost presumably means more content.”

The system could be friendlier to smaller developers as well, and that could help ease concerns over the lack of compatibility with the existing software library.

“The nice thing about using the x86 platform is they can get a lot of code from the Open Source Linux world and don’t need to do all of the heavy lifting themselves to do major parts of this,” said Enderle. “They could also do drivers for some of the hardware, but it sounds like they may have decided not to in order to increase accessory revenue and avoid reliability problems.”

However, with the good comes some bad. While the PS4 will feature a new version of the original DualShock controller — with the addition of an LED touchpad — older versions of the gamepad won’t be compatible. Nor does it seem that most hardware accessories, from steering wheels to Move controllers, will work with the PS4.

“Normally you get new accessories with a new console,” Enderle told TechNewsWorld. “For one thing, the newer ones tend to address any problems with the old ones, particularly with the controllers. The old ones don’t have the touchpad or ability to connect with the Sony motion features that will be built into the PS4.”

PS4 Costs and Beyond

What all this means in terms of the bottom line for gamers is something Sony hasn’t announced yet, and likely won’t until the Electronic Entertainment Expo (E3) in June. With so many variables, it is almost impossible to even guess at what the PS4 might end up costing when it is released in the fall.

“We still don’t have enough info on specs and features to say what people will pay,” said Pachter. “I would guess (US)$399 is the right price point.”

However, it could be more — and most likely won’t be less. The question is whether Sony will take a loss, as it did with the PS3.

“The business model is to lose money to get the install base,” said Pidgeon, “so the system could be $450 — but I expect it to be less.”

The final question is why Sony only hinted at what it will show in just four months time. Why offer only tidbits? One reason could be to take speculation away from Microsoft’s upcoming system, but the way Sony played it is still questionable.

Perhaps it should have waited for E3, suggested Enderle. “They wanted to get the developers more excited — but now the Xbox folks can better target Sony with a fresher message.”

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