While the hum of the fan ticks over for the last few times, the overheating power supply ebbs out its warm glow, the screen fades to black lets take a moment to ponder who killed the PS3 and why did it happen?

The Competition

Microsoft has spewed literally billions of dollars to boot Sony off the top spot, right from the get-go with the Xbox – their goal was to damage Sonys market share by spending stupid amounts of money at a big loss. The day PS3 was due to launch in the UK (after a6 month delay – surprise surprise) Microsoft took out blanket advertising in ‘Metro’ a free newpaper with a massive readership.

Microsoft woo’ed the best developers in the industry and negotiated the sexiest liscensing deals. Microsoft sounded the starting pistol of the next gen race and pulled off the expected insurmountable task of a global simultaneuous launch – which Sony took the bate and failed miserably dissapointing millions of people. The technology was not as good as the PS3 but the Microsoft marketing machine knew no bounds and the pockets were bottomless.

Nintendo with their genre busting Wii console opened the market up with an accessible price and targetting new customers. Simplifying the over complicated control stick was the single most important development in the games industry for 10 years. Sony couldn’t compete on price or originality. Developers fell in love with the easy transition from GameCube to Wii and the afformentioned controller ignited a new spirit of imagination. Sony’s response? ‘Sixaxis’ – a bizarro attempt at ingenuity and dropping the litigously expensive rumble. Pride and poor tactical lawyering created an impotent controller which inevitably lead to flacid sales.

‘Grey’ Importers

By far the biggest own-goal for Sony was killing the ‘Grey’ Import business. Note that the trem ‘grey’ was invented by marketing people to imply some sort of shady trade – almost ‘black market’ but not as bad. Why an own goal? Well let us look at the SCEE website and see what their strategic objectives are:

Sony Computer Entertainment Europe is responsible for sales, marketing, distribution and software development for the PlayStation®, yadda yadda yadda.

So, thats Sales, Marketing and Distribution. SCEE are primarily a liscencee who gets paid for selling stuff. They are salesmen and accountants. They dropped the ball on this one. Let me explain with an analogy: The music industry has recognised for a very long time that ‘street teams’ are essential in building a platform to grow a market on. Street teams are word-of-mouth machines that seed trends.

The music industry recognise ‘urban’ radio stations (read ‘Pirate’ radio) and invest vast sums of money in to this ‘grey’ sector. Although you can never connect them to Mr Big, every label with half a brain understands this concept.

Importers capitalised on Sony’s homemade logistical nightmares with the launch of the PSP a couple of years ago and some made big profits. Sony appeared inept by over hyping their products and customers remember them for breaking persieved promises. The PSP was officially launched 9 months late in Europe but on time in Japan and the US. Legal action was taken against importers under the banner of protecting intellectual property rights but really they were defending their monopoly rights on distribution of their product. Nothing wrong with that. Lawyers made a killing. Sony made a big mistake.

Sony’s bully-boys ran a tremendously successful debt collection campaign which no doubt pleased their bricks and mortar buddies but simultaneously they pissed on their own parade. Importers perhaps took a tiny chunk of their bottom line but the invisible and valuable expense was that importers fueled the hype-machine. The typical trend of the import gaming business is that they drop product from their catalogue once the ‘official’ item lands on the market because they cannot compete on price.

Early adopters cherished their overpriced imports and evangelised the PSP to a fever which would have generated ‘legitimate’ sales hundreds of times over. You can’t put a price on your customers doing your marketing for you.

Simply, importers have always been surrogate street teams to the games industry. An asset not a liability. The PS3 failing is Sony’s chickens coming home to roost. Importers didn’t touch it throug fear of being sued out of their pants.

Did the PS3 fail because it wasn’t good enough? Were Sony the masters of their own destiny? Did Nintendo put the boot in? Is there a 10 year cycle in the games industry? Who knows. One thing is sure: the PS3 is dead in the water.