SONY’s Success in the Gaming Industry

Which gamer doesn’t know Sony? The company, which is identical to the PlayStation brand, is now one of the most recognized gaming companies in the world. In fact, at the beginning it was founded, Sony was not a game company. In fact, the Japanese company was only beginning to become interested in the gaming industry decades after it was founded. Interestingly, the reason Sony is adamant about making its own console is because it is annoyed at Nintendo.

Sony Company History

Sony was founded shortly after World War 2 ended. In 1946, Masaru Ibuka and Akio Morita founded a company called Tokyo Tsushin Kogyo aka Tokyo Telecommunications Engineering Corp. When it was founded, Sony only had eight employees. They launched the first product, a power megaphone, one year after the company was founded. In 1950, they succeeded in making the first recording device in Japan, called Type-G.

In the mid-1950s, Tokyo Tsushin Kogyo began global expansion. Unfortunately – or fortunately? – There are already other Japanese companies that use the initials TTK. As a result, they must find a new name. They decided to use the name “Sony”, which is a combination of the words Sonus (sound in Latin) and Sonny (nickname for boys in the United States). They deliberately look for names that do not exist in any language so they can make the name a trademark.

Introducing a new company name in the business world is not an easy matter. So, do not be surprised if many Sony employees questioned the decision to use a new name. However, in the end, the company name was changed to Sony Corp. in 1958. Two years later, in 1960, they opened a branch in the United States. In 1968, they expanded their wings to England. They entered the French market in 1973 and Germany in 1986.

How did Sony get into the Game Industry?

It was Ken Kutaragi, a Sony engineer who realized the potential of the gaming console market when he saw his son playing a Nintendo console. Kutaragi is now known as the Father of PlayStation, but in the late 1980s, he was just an employee at Sony. After realizing the potential of the game console market, he then made a sound chip for Super Nintendo in the Sony Digital Research laboratory. However, he built the chip secretly. And once Kutaragi’s boss knew what he was doing, they were furious. Fortunately, Nintendo – which was looking for a sound chip for its new console – decided to buy the chip.

A few years later, Nintendo invited Sony to work together. The Super Nintendo Console still uses cartridges. Sony was asked to modify Super Nintendo so that the console could also play games on CD. At that time, Sony was still not convinced of the huge potential of the gaming industry. However, Kutaragi managed to convince his superiors that he could do what Nintendo asked. He successfully created a Super Nintendo that can play games on cartridges and CDs. The console is called the Nintendo PlayStation.

Sony showed off the Nintendo PlayStation in the Consumer Electronic Shows event in June 1991. Problems arose when Nintendo decided to betray Sony. On the same day when Sony introduced the Nintendo PlayStation, Nintendo announced their collaboration with Philips, which is a competitor to Sony. This makes Sony inflamed.

Indeed, even before Nintendo announced its collaboration with Philips, the relationship between Sony and Nintendo was already in trouble. The two Japanese companies were unable to reach consensus in terms of revenue sharing from their cooperation. Sony suggested, Nintendo get the results of cartridge sales, while the sale of CDs goes to Sony.

Nintendo balked, said Chris Deering, who was working at Sony’s Columbia Pictures and later became President of Sony Computer Entertainment in Europe. Nintendo even considers, Sony is trying to take their rations. The collaboration between Sony and Nintendo ended. And Nintendo doesn’t really bother. At that time, they were sure, Sony was not interested in the gaming business. However, what Nintendo did made Norio Ohga, who still serves as President of Sony, furious. Nintendo is considered to have embarrassed Sony. Ohga decided that Sony would make its own console.

“We will not back out of this business!” Ohga said at a meeting held at the end of July 1991, as quoted by GamesRadar. He then ordered Kutaragi to continue the development project for the console he was working on. With this, Kutaragi successfully received the blessing of Sony’s big boss to develop a game console.

Phil Harrison, who joined Sony in September 1992 and later became President of Sony Computer Entertainment Worldwide Studios, explained that Kutaragi was fascinated by System-G, a special-effects special computer that is usually used by television companies to display 3D images on live broadcasts. “In terms of technology, System-G is not much different from games. However, System-G is a very sophisticated machine. And Ken wants to make a similar machine en masse so he can play it at home, “Harrison said.

Again, problems arise. This time, because Nintendo invited Sony to work on projects other than games. Allegedly, the reason that Nintendo offered collaboration to Sony was because they did not want Sony to make an issue with them in court. They are also expected to divert Sony’s attention so they cannot focus on developing their own consoles. This makes Kutaragi frustrated. The reason, he also received a lot of criticism from Sony internal, especially from people who did not want Sony to enter the gaming industry.

Sony Internal Problems

In May 1992, Sony finally stopped negotiating with Nintendo. One month later, Sony officials held a meeting to determine the sustainability of the Kutaragi project in making game consoles. Most felt that the Kutaragi project should be stopped. Kutaragi then revealed that he had made a CD-Rom based machine that could display 3D graphics for games instead of multimedia. It’s just that the machine requires a chip that is far more sophisticated than existing.

Even so, Kutaragi did not want to give up. He deliberately ignited the fire of Ohga’s anger by saying, “Are we going to take insults from Nintendo for granted?” In the end, Ohga let Kutaragi continue his project. Only, Kutaragi had to get out of Sony because, Ohga worried that Kutaragi’s determination would be eroded if he had to work amid protests from his colleagues.

“Many people disagree if Sony enters the game industry,” Harrison said. Older Sony officials consider the consoles made by Sega and Nintendo as toys. They worry, if Sony starts making “toys”, their reputation, which has been preserved for decades, will be damaged. “Their opinions changed after the gaming business contributed 90 percent of the company’s total profits for several years,” Harrison said.

Together with 9 other people, Kutaragi was transferred to Sony Music, an entity that still exists under Sony Corp. but have separate finances. Sony Music’s headquarters are in the Aoyama district, Tokyo. There, he worked with Shigeo Maruyama, CEO of Sony Music, who later became Vice President of Sony Computer Entertainment International (SCEI), the division responsible for the PlayStation business. Kutaragi also worked with Akira Sato, who also became a VP. Later, Sony Music has an important role in the success of PlayStation.

Deering explained, at that time, music was a big industry. Sony not only knows how to raise talented musicians, they also know how to make and market discs. While in the gaming industry, cartridges began to be abandoned, replaced by CDs. So, Sony can use their knowledge from the music industry to the gaming industry.

Two other people who have an important role in the success of PlayStation are Olah Olafsson, President and CEO of Sony Interactive Entertainment and Terry Tokunaka, who had worked at Sony Corp’s main office. and later became President of SCEI. Tokunaka’s strategy to make PlayStation a simple success. He wants to win the hearts of game developers and publishers so they are willing to make games for PlayStation.

Winning the Hearts of Developers and Publishers

Harrison joined PlayStation in 1993. He was one of the people who tried to convince developers and publishers that they wanted to make a game for PlayStation. “We have to work hard to prove our credibility,” he said.

Harrison said, they received many questions related to business models offered by Sony, such as a large royalty or game distribution system. Game creators then compared Sony’s business model to that of Sega and Nintendo, which at that time were considered very strict. “Now, their business model has changed. However, at that time, making games for Nintendo 16-bit had a big risk, “Harrison said.

One of the problems faced by Japanese game publishers is that they do not have adequate infrastructure to distribute the games they make. When they make games for Nintendo consoles, Nintendo will be responsible for distributing the games. “All of our fellow publishers in Japan are happy with our console. It’s just that they don’t know how to sell their game to the market, “Harrison explained. “This is where cooperation between Sony Corp. and Sony Music produced sweet results. ”

In 1994, Sony invited game developers and publishers to hotels in Tokyo. They explained, they realized that the developers and publishers did not know how to sell their games. Therefore, they prepare the sales team. As a result, hundreds of publishers in Japan are ready to release games for PlayStation, so the console has a very diverse game.

Another reason developers and publishers choose to make PlayStation games is because making games for Sega and Nintendo consoles is not only risky, but also slow. Because the Sega and Nintendo consoles use cartridges. When compared with the process of making games in cartridges, making games on CDs take shorter time. In the end, this makes developers and publishers have more capital that can be used to develop games and marketing.

Finally, the reason developers and game publishers are interested in creating PlayStation games is because Sony did not have its own game studio until 1994. That means, Sony fully relies on third-party game creators. In addition, they also do not have to worry about having to compete with Sony in winning the hearts of the players.

Sony-Made Console

The first PlayStation console was launched in Japan in December 1994. The PlayStation became the first console to sell more than 100 million units. PS does not have a hard drive. So, if you want to store game data on the console, you need to use memory cards, which only have 128KB of capacity. In July 2000, Sony launched PSOne. With this, Sony started their tradition of launching consoles in smaller sizes.

Sony launched PlayStation 2 in March 2000. Until now, PlayStation 2 is still the best-selling console in history. Over the past 12 years, Sony has sold 155 million PlayStation 2 units. One reason why PlayStation 2 is far superior to its competitors, such as Microsoft Xbox, Nintendo GameCube, and Sega Dreamcast, is because it has a large number of games, reaching more than two thousand games.

PlayStation 2 uses the Emotion Engine – a processor with one core – as the CPU. The console is equipped with backward compatibility, a feature rarely found on consoles in its era. With the backward compatibility feature, you can play most PS1 games on PS2.

PlayStation 2 is also the first console that is compatible with DVD and is equipped with a USB port. Although you can install a 40GB hard drive on the PS2, this console also still uses a memory card. However, the PS2 memory card has a larger capacity, which is up to 8MB. Continuing the tradition, Sony launched the PlayStation 2 Slimline in September 2004.

The PlayStation 3 was launched in November 2006. When it was launched, the console was valued at US $ 600, more expensive than the Xbox 360 and Nintendo Wii. However, the console is indeed equipped with Blu-ray drive. And when compared to the price of Blu-ray players, PlayStation 3 prices are cheaper.

Sony uses the Cell processor as the heart of the PlayStation 3. To make the chip, Sony is working with Toshiba and IBM. Unfortunately, the chip is getting protests from many developers because it is difficult to program. Initially, the PS3 was equipped with backward compatibility features with PS2. However, to provide these features, Sony must embed a PS2 processor in its new console. In order to cut the price of the PS3, Sony then decided to eliminate the PS2 processor.

The PS3 became the first PlayStation console to support HDMI and 1080p video. This console can also be connected to a WiFi network. Sony has also equipped the PS3 with a 20GB hard drive. Not only that, you can also install your own HDD if you want. Just like its predecessor console, PlayStation 3 was also released with a sleeker design. No half-hearted, Sony launched two “Slim” versions of the PS3, namely the PlayStation 3 Slim in September 2009 and the PlayStation 3 Super Slim in 2012.

Sony launched the PlayStation 4 in November 2013. The console sold one million units on the first day, making it the console with the most sales in a one-day period. This console is also Sony’s first console that has an x86-based CPU, the same architecture as the architecture of most PC gaming processors. In 2019, PlayStation 4 sold 91 million units. As of March 2020, that number had risen to 110.4 million units.

This year, Sony is a hot talk because it will release PlayStation 5. In mid-June, they showed off the PS5 along with dozens of games that can be played on the console. PlayStation 5 will compete with Xbox Series X from Microsoft. Interestingly, even before the two consoles circulated on the market, analysts predicted that the PS5 would sell better than the Xbox Series X.

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