PSP World

Is Sony's 10 Year Plan Still Viable?

The ten-year plan is to Jack Tretton what tear gas is to the Iranian Government, or what heterosexual marriage is to Sarah Palin. In other words, it's an ideology, an organizing principle. The president of Sony Computer Entertainment has faced many challenges to his bold strategy, with some of the harshest criticisms coming just this past week. First, Activision CEO Bobby Kotick came out publicly and stated that his company would stop making games for the Playstation 3 if Sony did not cut prices and sell more hardware. Then, in slightly more polite (and characteristically Japanese) terms, Koei president Kenji Matsubara asked if Sony would "please lower the price" of the PS3. It's almost like Tretton came home from a night of debauchery to find himself in the middle of an intervention.

However, rather than recognizing that he's got a problem, the Sony president appears more convinced than ever by his ten-year timeline for success of the Playstation 3. Among other things, that means that we can't expect a significant price cut very soon. Talking recently to Fast Company magazine, he blasted cheaper consoles from competitors while re-iterating his allegiance to, you guessed it, a ten-year plan:

"[P]eople are always wanting you to lower your price on hardware. We could've come out with a PlayStation 2.5 for $299 or less, and in the first two or three years it would sell extremely well. But there would be a point where people would be going, "I am not really seeing the incremental leap." We feel that we're sacrificing the short term to pay dividends in the long term. People are having short-term thinking--the platform is not even three years old. It was $599; it's now $399. The focus on pricing is something we appreciate, but you have to have the conviction and the confidence that you are on the right path for the long term and ultimately you'll get all the consumers you want. You won't get them all day one, but we're looking to get them over a 10-year period."

Sony Computer Entertainment President Jack Tretton holds up a Playstation 3 at a promotional event.

On one hand, a ten-year vision for hardware does have a certain appeal. It suggestive of traditional corporate values like customer loyalty and trust. We know that Sony won't come out with a better, faster PS3 just days after we finally plunk down the money for one, and that it will continue to support our console long after competitors have withered. On the other hand, the incredible speed at which technology improves means that locking in to a ten-year cycle seems stifling. Apple doesn't wait for more than a few months before updating its many product lines, and it seems to be doing quite well. What would happen if Microsoft released a brand new Xbox console in 2011 that quadrupled the processor speed, ram and storage of current models? The current model of PS3, by contrast, isn't set to expire until 2016. Would Sony continue to flog its PS3 platform for five more years?