Friday, November 17, 2006

The New York Times
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November 17, 2006

Release of PlayStation 3 Becomes a Waiting Game

Angel Paredes, who otherwise lives in a Manhattan apartment, spent three nights this week on a sidewalk at 56th Street and Madison Avenue. That is the price he paid to be first in line at Sony Plaza to buy a new PlayStation 3 — that and the $600 cost of the video game console.

“Everybody in my family thought it was pretty crazy,” said Mr. Paredes, a 31-year-old stock-market day trader. It could have been worse, he said: Sony left the bathrooms open.

And at least he had company. Die-hard video game players began standing in line over the last few days in New York, San Francisco and elsewhere to be among the first owners of the Sony PlayStation 3 when it went on sale at midnight last night.

Sony met them with pomp and circumstance, and a modicum of star power. About an hour before the consoles went on sale, the Sony chief executive Howard Stringer took to the stage in the lobby. He was followed by the rapper Ludacris, who carried a Playstation 3 and waved to the crowd, prompting wild cheering from the mostly male crowd of about 500. After buying the first console, Mr. Paredes held his sales bag over his head in triumph. “It was totally worth it. I’m going to go home, shower, and then play,” he said.

It has been hyped for more than a year, but the battle of the next generation of video game consoles is officially joined this weekend. Following the release of the PlayStation 3 today, Nintendo plans to begin selling its own new console, the Wii, on Sunday at midnight. The third major rival, the Microsoft Corporation, began selling its Xbox 360 a year ago.

The three companies, through a series of trade conventions and tens of millions of dollars in marketing, have created a storm of hype. Sony and Microsoft are promoting games with more vivid graphics, more complex story lines and more seamless online play. Nintendo hopes to differentiate the Wii with a motion-sensing game controller that allows people to manipulate action on the screen by pointing and waving it.

More than a few of the people waiting in line yesterday in downtown San Francisco for a new Sony system had a different motivator.

“I’m selling mine on eBay,” Neal Chung-Yee, 27, a student at the Art Institute of California, declared proudly. He and others in the line said the hype, coupled with what is expected to be a lack of enough consoles to meet holiday demand, had created a secondary market on the Internet.

Mr. Chung-Yee, who had been camped out since Wednesday afternoon despite having a head cold, said that he had big plans for any profit he might make reselling the system: “I’m going to buy a brand-new TV.”


Mr. Chung-Yee and some other gaming fans said they were willing to wait to own a PlayStation 3 because they believed that it would take months for an adequate game library to be released. Plus, they said, to fully appreciate the rich graphics of the new Sony and Xbox systems, you need a high-definition television.

The skepticism among even the most serious game players underscores a challenge for Sony. How can it convince the masses to pay $500 or $600, depending on the model, for a game machine?

To counter consumer wariness, the company is promoting the idea that the PlayStation 3 is a great value, one with such rich graphics and computing power that it creates an irresistible emotional connection with users.

In one in a series of new television ads, the machine sits in a white room with a toy baby that, in response to the console, begins to laugh and cry.

Kaz Hirai, the chief executive of Sony Computer Entertainment America, said that the company wanted “to elicit an emotional response from you, good, bad or indifferent.” He said that creating such an emotional bond was the first step in making a sale, but that Sony also wanted to convey that the system is a good deal.

“It’s not too expensive,” Mr. Hirai said. “We’re offering fantastic value to consumers.” Future marketing efforts will emphasize Sony’s position that the PlayStation 3 is built with high-end components that will still work in 5 or even 10 years.

“Look at how long you’ll be able to enjoy your investment,” Mr. Hirai said.

Jim Louderback, editor in chief of PC Magazine, who recently reviewed both the PlayStation 3 and the Wii, said that idea did not sound realistic. “Considering there’s a new generation of video game consoles every five years, that doesn’t make a lot of sense to me,” Mr. Louderback said.

Nintendo’s approach with the Wii is quite different. It costs $249, less than the basic Xbox model, which is $299 (a high-end version is $399). Nintendo is aiming the machine at mass-market consumers who do not necessarily want a superpowerful console with complex games.

Perrin Kaplan, vice president of marketing for Nintendo of America, said Microsoft and Sony could be alienating many people with the expense of their consoles but also by emphasizing their elaborate games.

“Some people are getting a little bored with the complexity, how deep the games are,” Ms. Kaplan said. “They have to do their jobs. They’ve got kids, or other interests.”

Ms. Kaplan said the industry needed to appeal to a broader group. “Our goal is to build the industry into something bigger,” she said, adding of the industry’s overall sales: “We need to find a way to go up or we’re going to start going down.”