0.0 Context Setting

It’s Monday, 10 October, 2022 in Portland, Oregon and it continues to be unseasonably warm.

Thanks to anthropogenic climate change (or people being people, I guess) the air quality here is shot to hell so our youngest doesn’t have outdoor school. Thanks, people.

1.0 Some Things That Caught My Attention

What is it like to be a PlayStation, Netflix/Everyone Else Edition

I am still thinking out loud about What To Do With Sony PlayStation Now That Console Hardware Sales Growth Has Peaked:

1. Google Stadia, or, Winning at Videogames
2. What is it like to be a PlayStation?
3. What is it like to be a PlayStation: Software Defined Brands

I left the last installment thinking about what sort of uneasy, temporary partnership might exist between, say, Apple and (Sony) PlayStation (actually: Sony Interactive Entertainment). I realize I wrote temporary, but that’s not wrong, not when I think about Apple and one of its longest lasting brand partnerships: Nike. You’d think that Apple threw Nike under the bus when Apple went and watched while Nike tried with its Fuel Band wearable, then just launched  WATCH (what with Tim Cook being on Nike’s board and all), and what with Apple and Nike doing the whole Nike+ Run generations ago. But they’re still working together, you can still get that  WATCH NIKE Edition, so you must assume that they’ve figured out how to work together.

Anyway.

You can look at the PlayStation versus XBox situation a bit like the who can learn how to do online services faster. The first version of this we had was Netflix versus The Old Entertainment Industry: Netflix moved from using the US Postal Service to move DVDs around in a stunning piece of using existing infrastructure and being very bloody minded about licensing terms on DVDs. Then, so the story goes, they went to digital distribution, because that was always the plan.

But anyway, Netflix started kicking off the whole streaming premium entertainment thing and before we knew it there was a whole tech industry versus old media industry, where nobody was sure if HBO would learn how to do streaming before Netflix learned how to do HBO-level premium entertainment. Well! Many years later, we have some data, and some new hypotheses!

(Why is this relevant? Because PlayStation is a place that develops online services for its hardware and, you’d argue, also develops online services for not-its-hardware, and suddenly now you’re comparing a company with kind-of-online services with another company (Microsoft) that has rather effectively, you’d argue, transitioned from buy-once-licenses for on-prem software to the cloud, although I’d also argue that the radical shift in revenue has as much to do with Microsoft’s power in licensing agreements and contract negotiations than it does in the actual quality of its software. See: Adobe Creative Cloud)

Anyway. Netflix and HBO, because here writ large again is another one of those big digital services strategy things. Here’s what I think happened over the last 15 years:

• Netflix didn’t get that much better at consistently producing premium entertainment. I’d argue that it stayed about the same at being able to buy enough stuff that every so often it scored a hit, and that it’s telling that what Netflix doesn’t want is quality, Netflix wants you to feel like you’re getting enough stuff for what you’re paying, and that it’s got to be good enough to at least whack on in the background while you’re doing something else, like ironing (does anyone do that anymore) or folding clothes (some people still do that?)
• HBO arguably didn’t need to get better at streaming, neither did CBS or Paramount because it turns out what Netflix did (streaming tech) was close-enough to being a bit of a commodity that you could cobble together good-enough streaming infrastructure for tens of millions of people and that even if the app was shitty, people would still pay for it if you had the content. Content has always been king, but tech always helps. Paramount+’s app is shit, but if I care enough about Star Trek, sure, I’ll pay. HBO Max’s app is terrible and likewise. You don’t really have a choice, so your software just needs to be not too shit
• And then Disney came along, presumably used its BAM acquisition, and look, all video streaming services have completely shit user experience but it’s never stopped them from at the very least making a tidy profit.

So normally the question would be: can Sony get better at Microsoft-style services faster than Microsoft can get better at videogames (sorry, “content”) and the answer is these are different questions. Microsoft can, modulo competition law, just go and buy studios for exclusive content and then either fuck up those studios over time or continue to build its content moat. Sony can… not do that as much. It just doesn’t have the cash on hand or, I’d argue, the same kind of access to cash that Microsoft has. Sony could also buy services (see: U.S. TikTok), and again we’d have to see if they completely fucked them up too, a la Yahoo! or the succession of misguided suitors who either on purpose or accidentally ended up with being responsible for the tumblr dot com domain.

You’d think that now might be the time to go and talk about differentiation through user experience and I’m, like… kind of? It kind of matters? Google and Apple don’t quite compete on differentiation through user experience. Facebook (and everyone else who feels at threat) tries to ape the social-content-sharing-thing du jour which is why even LinkedIn has stories now (don’t check), and the whole thing with Clubhouse was a sharp reminder for people who should know better that some products aren’t products, they’re just features. Or another way: Instagram can try and match TikTok feature for feature, but if it’s a different place with different priorities (sell ads) with a different culture (weird influencer scam shit) that also has a different history, then… it’s not going to work.

So you’re essentially back to new product development and kind of new-social-platform-development which fortunately is also the kind of thing that takes time to grow (you need a 5+ year plan for the PlayStation brand, remember) and also unfortunately, the kind of thing that takes time to grow (corporates tend not to have the persistence and patience to wait things out over such long periods).

I mean, the other thing here is that successful social platforms happen to have gotten big because they’ve been totally happy to burn money because they exist in the VC user data make-believe land and that’s not exactly the problem Sony has here. Sony isn’t really in the position to launch a giant cash-burning, loss-making games service on the off-chance that it might make it big in the future, if it wanted to do that, it’d just be super irresponsible with its hardware. No, it’s got to be tied into subscription services (most likely), and it’s got to at least have a decent, actual, not future, ARPU.

Is there something that’s complementary to PlayStation that Sony happens to own that could be added to some sort of PlayStation-brand-led bundle? Not really. The only content Sony’s got is Sony Entertainment, which is films and music, both historical acquisitions, both of which aren’t big enough libraries to stand on their own, and both of which really can’t be tied to a brand (PlayStation) that defines itself as being the place where Play Has No Limits in a 2021 brand ad (barely a year old!), or in a 2020 PS5 trailer, complete with brand manifesto v/o. (By the way: you/your agency lose points by using the exact same track from the Wonder Woman 1984 trailer that was released in 2019).

So then we’re back to Play Has No Limits and I’m super curious as to what people think when they hear that and what they think of the PlayStation brand. Because the other thing PlayStation has to navigate in defining what it’s going to be over the next 25-30 years is that whether this happens explicitly or not, it’s as much as a brand reset. Videogames aren’t what they were in 1994, which sounds trite and obvious and dumb, but what you’ve got with the PS5 is a company and brand that’s the logical outcome of twenty eight years of history with that original brand positioning, and… well, let me just check out one of my favorite books.

The copy for that 2021 brand ad reads like this:

Welcome to a city where play is elevated to extraordinary new heights. Where every move is crucial. And the game means everything. This is Playtopia.

And the ad is pure hardcore escapism. Speed, freedom, fun, consideration, aggression, competition, driving music, chaos, tactical weaponry, shit hot cars, stealth…

Compare that to this Disney+ teaser trailer from 2019, Start Streaming Now, which encompasses everything from family friendly animation, to documentaries, to classic animation, to live action remakes, to everything from the MCU, to Star Wars, TV movies…

Some thoughts:

PlayStation has the same breadth of content as Disney shows in its Disney+ teaser. It has family friendly games, it has creative games, it has games that have made its players scream, shout, cry and more, alone and increasingly together. It has had people lining up around the block at midnight.

But the copy right now, and I’d argue the way that I’d tweak the copy given that people who started with PlayStation in 1994 are older and have kids now and PlayStation needs to clearly remain relevant to younger audiences, reads more like copy for a hardcore audience that wants to win “where every move is crucial” and is pretty defiant about it “and the game means everything”. This isn’t necessarily play having no limits. It honestly is more like the tone of voice and positioning that Nike has traditionally used – that performance is the thing, and that’s reflected in the way today’s console wars are still fought, with specs. But that’s the point with waning growth in hardware sales: tech spec differentiation isn’t the only thing that cuts it.

So again, what would PlayStation mean, given that the brand took two words and made them one, and that there won’t need to be a physical piece of hardware…

Bits and pieces

• I see we’re talking about expensive government software and how it should be done in a weekend or during a hackathon again and it’s not even the New York Times: this time, it’s ArriveCan. See: Michael Carlin and Alistair Croll. Frankly, any major news outlet that seriously compares “we could do it in a weekend for $25k” and has the chops to look into the procurement budget of a $54m tech project and neglects to mention that $5m of those costs are to AWS, well, seriously. Nice blatant political hatchet job, and that’s even when ArriveCan could’ve cost less and potentially delivered more/better/faster. The offending article, Two Canadian tech companies planning hackathons to show ArriveCan should not have cost $54-million¹.
• Bureaucracy as profit model / administrative burdens, the latest example: there’s a startup that will help you find your lost retirement account, claiming that $100+ billion is lying around in the equivalent of unclaimed property.
• In a new example of “medium-specific content does well once people figure out how to make it accessible and in a sustainable business model” it turns out that when Marvel make comics that work on phones (i.e. vertically scrolling ones) and bundle them in with a subscription service, people really like them? Huh. That article is stuffed full of really great bits and pieces, like the Editor saying that he really needs to review submissions on his phone because “that’s how they’re meant to be read, and they don’t make sense to read on a computer” which to someone who’s been working in the “make native interactive media” industry for forever, is streaming music that’s equitable toward musicians to my ears. The article also has an example of one of the comics but it doesn’t work because it’s hilariously been jammed into Polygon’s Chorus CMS and doesn’t display properly/as intended on mobile.

Lastly

1. Don’t act big
2. No sharp stuff
3. Follow derections
4. Shut up when someone is talking

RIP, Dan.

That’s it today. Happy… Monday?

How are you doing?

Best,

Dan