The Story Of PlayStation

THE STORY OF PLAYSTATION (PART THREE)

In the last episode, we ended with a reference to an arcade game that showcased the power of polygons. That arcade game was called 'Virtua Fighter'. A beat-em up, it didn’t represent a huge advance in terms of play mechanics, but its visuals were truly a first of their kind. It had beautifully animated, polygon-based characters that provided proof that the 3D revolution was coming much faster than people expected. Some of the companies that had taken Sony’s specs with a pinch of salt were present when Sega unveiled its later offering at the Makahuri Game Show. Now Sony’s claims seemed a lot more plausible and the PlayStation sounded like a tempting platform to work for.

(Image from World News)

Sega’s Hayoa Nakayama received a big wake up call when the specifications for PlayStation found their way into his hands. The console they had been preparing had been a predominately 2D machine, built to compete with the 3DO. But here was a console capable of displaying images comparable to the ultra-expensive Silicon Graphics systems. Simply put, it was years ahead of anything Sega or anyone else had ready. Nakayama realised that the Saturn would stand no chance of competing in its current form. He gave his staff a daunting task, which was to bring the Saturn up to PlayStation’s standards in time for launch- a date only months away.

So far, the revolution PlayStation brought about has centred on the technology built by Ken Kutaragi and his team. But Sony’s success was not so massive just because their console out-performed the competition. Just as important to PlayStation’s success was Akira Sato. By identifying certain weaknesses in marketing and distribution and adopting a different business model to the competition, Akira Sato helped Ken Kutaragi’s vision touch millions of people.

The problems of distribution had arisen because Sega and Nintendo used cartridges as a storage device. The advantages of such a medium are a complete absence of loading times and the fact that their complexity effectively prevents piracy. But the complicated nature of cartridges had a negative side in that they took time to produce- about two months. This meant that games companies had to make an educated guess as to how well a game would perform and order enough copies to cope. But what if the game’s popularity turned out to be bigger than anticipated? The company could always order extra copies, but by the time the two-month production cycle was complete the interest that the public had would have lessened significantly. In this climate, most companies chose to order huge first runs, which would then be distributed by the Soshinkai (Nintendo’s wholesalers) with surplus copies going on to the second-hand market.

(Image from wikimedia commons)

Nintendo’s business model could be described as quality over quantity. They only released titles that were really worth buying. Nintendo also had a policy of increasing software prices annually and by the time the SNES was on the market, some games cost almost $100. The wholesalers also ramped up prices because while they were desperate to offload games with a poor chance of being a hit, they would hold on to games with every chance of selling in huge quantities and wait for prices to rise. The gamers themselves reacted to these high prices by finishing the games as quickly as possible, because the sooner they returned it to the shops the more money they could expect to receive. The game would then go on re-sale, often being passed off as a brand new copy and so the cycle went on. This practice was so common it had its own term: Dummy rental. This was even more unethical in Japan than Western countries, because of a long-held belief that something spiritual was passed on to objects that had been greatly cherished by an individual. This meant that a Japanese person would hesitate before using a game that had belonged to (and greatly enjoyed by) a stranger. No wonder, then, that Akira Sato was angry when he once bought a supposedly brand new game that turned out to be second hand. "This experience made me determined to change the trading practices in the computer game market". Why did Sato-san think he could change the trading practices? Because PlayStation used CD-ROM.

So far, companies had seen the advantages of CD as being its storage capability. But Akira Sato realised its quick production cycle could be just as beneficial. He had originally worked for Sony Music, where it had long been apparent that one could not predict how well an artist’s next album would perform. Sony Music would therefore test the waters by pressing a few initial copies, judge the response and use the quick production cycle to supply the extra product as needed. Akira Sato’s inspiration would be to apply the music industry’s model to the videogame market. The PlayStation would err on the side of quantity, as the customer would have a vast range of software to choose from. If a title was doing well, additional copies could be quickly delivered.

(Image from wikimedia commons)

There was a potential drawback to this plan. The games companies had been using the old method for so long, they might not be quick to adjust to Sony’s approach and still insist on huge initial runs. Sato-san decided that the best thing to do would be to cut out the middleman (the Shoshinkai) and instead use a purchase for resale approach. Sony themselves would handle distribution, relying on the factories of Sony Music to press the copies. There were two advantages to this approach. Firstly, the Shoshinkai’s methods had become rather questionable. The managing Director of Konamai complained "they wouldn’t replace faulty product, they traded without regard for proper channels…they behaved so unethically; it was beyond belief". If Sony could take them out of the equation, their platform would look very attractive.

The second advantage lay in the fact that Sony would be manufacturer of both software and hardware. Before, companies had sometimes been over enthusiastic and ordered more games than there were consoles on the market. This would result in many unneeded copies remaining on the shelves, which falsely implied the game was unpopular. But because Sony made PlayStation, they would know how many machines they had produced and could adjust orders accordingly. Some companies needed some convincing before they agreed to Akira Sato’s new methods and some demanded to know why they couldn’t market the games themselves like they had always done. But Sato-san stuck to his guns and Sony did indeed bring about a distribution revolution. With the old method based on cartridges, games were expensive and repeat production impossible. CD-ROM enabled Sony to sell games that were cheaper than the competition’s and they could quickly respond to unexpected success. Sega had known that CD had these benefits, but they chose to stick to the old methods. This was because they had worked with the wholesalers for a long time and were loathe to severing these ties. Sony had no hesitation in cutting out the middleman because they had no such connections. Doing things differently to the competition was always going to be a gamble, but because they were newcomers, Sony had less to loose....

REFERENCES

The Ultimate History of Videogames by Steven L. Kent

Revolutionaries At Sony by Reiji Asakura