The Critical 'I'

Read. React. Repeat.

Monday, August 16, 2004

The prospect of a household computing device that acts as an all-in-one entertainment server is too juicy for the computing/consumer electronics industries to ignore. So convergence is the keyword in the rollout of gaming consoles like Sony's PSX, masquerading as digital Swiss-Army knives, despite the skepticism of analysts and a poor track record.
Some analysts even wonder if the entire convergence idea really makes sense. "Beyond the clock radio, what's ever worked better from putting two different functions together?" asked Schelley Olhava, an analyst at market researcher IDC.
Very much my sentiment. I've already trashed the motivating factors behind hybrid devices like this, and figured that the PSX specifically was going to flop. That's turned out to be true; even the tech-eager Japanese didn't bother to throw any money down on the half-baked PSX.

The assumption that the average consumer is chomping at the bit to experience all of his/her music, movies and photos through a computer-based interface is shaky, as recent Pew Internet & American Life data suggest people still prefer non-computer media channels. Granted, this is a trending situation that can change with the introduction of more digital devices, but for now, it's looking like a limited market.

Even worse is the notion of trying to market the same console device in multiple configurations:
The tepid response to the PSX means that Sony is unlikely to take a bet-the-farm approach to convergence with the PlayStation 3, analysts have said. Instead, the electronics giant will at best offer multiple versions of the console--a games-only version around the standard $300 price point for new consoles, for example, and a media-enriched model for those with cash to burn.

"I think this is heading to multiple types of products," DFC Intelligence's Cole said. "You'll have a basic PS3 that just plays games and other (models) with different kinds of functionality. If you can do that right out of the gate, you might be able to get more consumers to bite than they've had with the PSX."
Really dumb idea that I believe is helping to kill Tivo right now. These devices are unknown quantities, intended to introduce and build a product sector. You do that by keeping things simple for the consumer, who's already gunshy about investing a few hundred dollars into something that's more a luxury toy than a necessity. You don't do it by presenting a dizzying array of features that the purchaser has to sort out. You can do that with cars; you can't do it with consoles.

Some see that light:
Olhava has doubts about that notion, given the game industry's reluctance to irritate mass market retailers with multiple product configurations. "I'm not even convinced we'll see different" models, she said. "This is an industry that prefers simplicity."...

Nintendo of America spokeswoman Beth Llewelyn said the company has no plans to cram consoles with nongame functions.

"There's been talk about convergence for many, many years, and it hasn't seemed to stick yet," Llewelyn said. "Consumers like dedicated video game systems. We think there's a huge market out there for game-specific devices."

That may be the smart way to go, Olhava said, given the track record for convergence experiments.

"Combining a lot of different features usually doesn't work," she said.