Sony recently announced a successor to its so-so performing handheld device, the PlayStation Portable 2 – or as they codenamed it, Next-Generation Portable (NGP). Accompanied with the announcement of the Playstation Suite software platform for various platforms, initially Android, Sony presented what could seem to be a winning strategy and value proposition for the future of handheld gaming: the strongest handheld gaming machine and a platform-agnostic software suite to simplify and unite mobile gaming.
Yet, according the findings of my Master’s Thesis, Sony is heading down a catastrophic path. While the NGP may perform well in the market – although not become a breakaway hit like Wii or Kinect – it will be a costly failure for Sony in the long run, losing even more ground to new players and even their strongest competitor, Nintendo.
In the thesis-developed framework for strategic innovation, Innovation-Driven Development, we defined a innovation-assessment matrix, which defined four categories of innovations based on their level of radicality and disruptivity. The least attractive and profitable of these are “Pushing the Envelope”, which are radical innovations with little to no disruptivity. While they can garner much attention from their groundbreaking technology, they are resource-heavy and expensive innovations, merely pushing the envelope of the existing paradigm – which may already be on the verge of exhaustion. As history shows, paradigms are often destroyed by newer and more exciting paradigms, which may initially appear less attractive in many regards, but carry a promise of a better future. The current switch from fluorescent lights to LED is one such example.
The Nintendo Wii effectively introduced a new paradigm in the console space. They surprised everyone, especially Sony and Microsoft, but introducing new value propositions through a motion-based control scheme and a low entry price, while ignoring the race of state-of-the-art graphics and all-in-one media features. After the sales success was obvious, Microsoft and Sony fumbled to catch up with Kinect and Playstation Move, but while Microsofts counter-attack as effective by establishing a new paradigm, Sony became an obvious follower. A signal of downfall.
The same can be said in regards to the NGP. While it boasts many attractive and state-of-the-art features, it does not bring anything new to the table. Conflictingly, it displays a lack of focus, pulling together as many currently hot trends and features as possible, old and new. Front and back touchpads, analog sticks, more social features than you can imagine, a super high resolution screen, the best mobile processor available, and much more. But none of this carries a new and unique vision. None of this breaks any paradigms. It is a pure example of a stumbling reaction to competitors, trying to overdo everyone, but only reacting. Leaders don’t just react, they show new ways.
Not that there’s anything wrong with incremental and radical innovations and improvements and reacting to the competition. Leaders must still do this, but when the current paradigm is showing weaknesses – PSP have not faired particularly well outside of Japan and the mobile gaming space is on a trajectory to becoming the dominant player – the solution is not to continue pushing the envelope. Nintendo, at least, is trying to differentiate themselves with glasses-free 3D – an aspect that Sony despite their 3D push in the living room have neglected for NGP. Essentially, the NGP is a classic example of a dominant player slowly losing its grasp on a market, and instead of trying to be clever and create a competitive advantage through a disruptive innovation, they use heavy resource spending to try and stay ahead of competition.
In one of the books used in the thesis, Competing for the Future by Prahalad & Hamel, a very illustrative metaphor were used to describe this exact case. Despite being military superior in almost any way, the US still lost the long and exhausting war in Vietnam. The reason, according to Prahalad & Hamel, was simple: because the US had the resources, they fought back against the unexpectedly hard resistance by pouring more and more of the same at the enemy. More soldiers, more advanced weaponry, more machinery etc. Little did it help. The Vietnamese opposition, on the other hand, having few resources, used the abundance to their advantage; they changed the face of warfare by using the jungle and simple, but clever tricks to fool the superior american army. It wasn’t expensive or difficult. But it required that you looked at warfare differently and not necessarily believe that more is better.
While the Playstation Suite announced at the same conference may be a sign of clever thinking at Sony, the NGP is one of the strongest example of a failure in the making. It may contain anything any gamer would ever want today, but it does not carrier its vision of tomorrow. Instead of trying to be simple and clever and discover new directions, Sony are, just like the american army in Vietnam, merely throwing more of the same at the market. It didn’t work with the PSP. It won’t be any different for PSP2.