POWER GAMES

Sony is about to embark on one of the biggest gambles in its history by taking on the might of computer games giants Sega and Nintendo with the European launch of its PlayStation product.

PlayStation, which has taken 300m and three years to develop, is CD-based, with super-fast animation, three-dimensional graphics and CD-quality sound. It is being talked about within the company as the most important product since the Walkman. But is Sony taking on too much, too late?

Sony’s history is littered with technically advanced products that have foundered along the way. The huge corporation, with interests ranging from consumer electronics to the film industry, has suffered from a notable lack of new hit products and a worrying tendency to back the wrong technology, say industry observers.

Its first disaster was in the early Eighties. Sony pioneered the Betamax video recorder, generally regarded as technically superior to the now universal VHS system launched by Matsushita. Quite simply, Sony’s marketing failed.

A repeat performance may be on the way, this time with the digital video discs that are expected to eventually replace video cassettes. Toshiba and Time Warner – backed by Hitachi, Pioneer Electronic, Matsushita Electronic MCA and Thomson Consumer Electronics – have thrown their weight behind the SD Super Density disc format, which they want to become the industry standard. One side of a five-inch disc can store seven times more data than an ordinary CD and as much as 142 minutes of images and sound – enough for a full-length feature film.

Sony and Philips are backing an alternative system – High Density (HD) multimedia CD. Last year they announced this as the single standard acceptable to both the hardware and software industries.

Sony and Philips will not support the SD. They claim their product offers the best option for optical me-dia. Neither camp is willing to compromise at this stage and a costly and humiliating defeat for one side seems the likely outcome.

But while the battle for stan-dards in the digital video discs market ensues, Sony appears to have more ground for confidence in the games sector. But it will have to fight hard for a share of the 2.5bn worldwide market. All-out war is expected by Christmas.

Sony Computer Entertainment international marketing manager Simon Jobling is responsible for the launch of PlayStation. “The product has arcade-quality graphics, life-like three-dimensional images and the option of playing your own music on CD. It is the next generation of video games and a real leap in terms of technology,” he says.

Sega and Nintendo are launching their own “next generation” games. All three will be on show and put through their paces this week

at the Electronic Entertainment Expo in Los Angeles in the US.

The Sony Play-Station and Sega Saturn both have 32-bit technology (the present top-selling Sega product only has 16-bit technology), providing much faster, crisper images and sound.

Sony’s product will be running replicas of popular arcade games such as Ridge Racer, Motortoon and Mortal Kombat. Sega Saturn’s games include Daytona USA and Panzer Dragoon – a shooting game incorporating sound from a 20-piece orchestra. Nintendo will be unveiling the Ultra 64, based on 64-bit technology, which promises outstanding graphics.

As if this were not confusing enough for technophobic parents who will have to pay for the games, there are other new products on the market such as Philips CD-i, 3DO from Matsushita and Jaguar from Atari.

Competition will be fierce and sales determined by the success of each player’s marketing. Sony is spending 30m on marketing PlayStation across Europe, compared to Sega’s $50m (31.6m). Nintendo has not revealed its plans.

Jobling denies that, as the third entrant into the market, Sony is at a disadvantage: “There is no brand loyalty in this market. Technology has not kept pace with consumers expectations, to an extent that they are disappointed. We don’t carry all the baggage and associations that Nintendo and Sega do.”

There is no doubt that the computer games market has suffered in recent years. Both Sega and Nintendo, which made huge profits in the late Eighties, have suffered equally huge losses in the Nineties. Both companies issued profit warnings in April, blaming the sluggish European games market.

Computer Trade Weekly editor Stuart Dinsey has been watching the market for some time. “The sector has reached a plateau. No one is buying games or hardware at the moment. Consumers know that something better is around the corner and they are waiting. Christmas this year, and particularly in 1996 and 1997, will see the third big games boom,” he says.

Dinsey says Sony is not too late to enter the market: “There is still everything to play for. It is too early to say who will emerge as winner, but at the moment Sony is favoured as the hot ticket.”

The deciding factor will be price, the software available and branding. Sony won’t reveal PlayStation’s price but it’s likely to be about 400. With Sega Saturn about the same, and Nintendo slightly cheaper, the core target market of 14 to 16-year-old boys will need lucrative Saturday jobs or indulgent parents to be able to afford them.

Sony is also keeping details of the price of the games under wraps. However, they will cost substantially more than a music CD – and possibly as much as 60. Jobling says: “Computer games users will not be surprised by the price.”

Sony’s PlayStation will run replicas of arcade favourites. But it is also working with its own in-house software company, Psygnosis, and third-party software developers.

Despite Jobling’s assertion that there is no brand loyalty in the market, developing the right image for PlayStation will be vital. Paul Simons, chairman of Simons Palmer Denton Clemmow & Johnson, which two weeks ago won the advertising account (along with Ogilvy & Mather which will buy the media), says: “Rather than being third in the market, Sony can own the market. It’s all to do with frame of mind. It has to own the sector. As Volvo owns safety in the car market, then Sony needs a parallel for PlayStation. We aim to make the advertising famous and the brand famous.”

Sony and its agency acknowledge that its target audience is extremely ad literate and will have to be won over subtly. “We won’t be doing traditional games advertising, with lots of wizzy graphics and abstract images. We will let the product do the talking – but we can promise a spectacular launch,” says Jobling.

Sony says it intends to broaden the target audience beyond 14 to 16 year-old boys. It will do this through Sony’s links with the film and music industries. Jobling says: “Sony stands for quality, but we may also tap into those associations with Sony music artists, for example, for future launches for PlayStation.”

The company certainly faces a challenge, but PlayStation could be a chance to prove it can have hit new products. “Until now, the games market has been dominated by two companies – Sega and Nintendo. By the end of the year there will be three players. To be market leader you can no longer expect a 60 to 70 per cent market share. Now you have to think along the lines of a strong cola brand where 35 per cent is a great market share,” says Dinsey.