Sony Announces the PlayStation 4 (Proof of Existence to Follow)

Do you remember the criticism leveled at Microsoft (NASDAQ:MSFT) when Steve Ballmer took to the stage last June for the surprise announcement of the company’s new Surface tablets? Details like pricing were missing, and Microsoft took heat for jumping the gun with the pre-announcement — not to mention it shot itself in the foot as many people lost interest in the many months between the reveal and the launches.

Well, Sony (NYSE:SNE) just topped that faux pas.

What’s Up Sony’s Sleeve? Good Question!

We know that the next-generation video game console battle is going to be just that — a battle.

Nintendo (PINK:NTDOY) was first out of the gate last year with the Wii U, but sales have lagged while gamers wait to see what Sony and Microsoft bring to the table.

Thrown into the mix are mobile gaming — which has been pummeling the traditional video game industry — and the unexpected arrival of upstart contenders to the living room and portable gaming industry. Not only do the big three have to fend off Apple’s (NASDAQ:AAPL) iPhone, iPod Touch and iPad, along with the Android equivalents, but now they have to deal with high-profile newcomers like Nvidia’s (NASDAQ:NVDA) Project SHIELD, one of the bombshell announcements at this year’s Consumer Electronics Show.

So, needless to say, all eyes were on Sony on Wednesday, when the world expected to see the latest major salvo on the video game front.

What the world got was a one-upping of Microsoft’s ill-advised pre-announcement — a two-hour PlayStation 4 event in New York that not only was missing critical information like the release date and price, but the actual console itself.

That’s right: Tech media sat through a two-hour PS4 announcement, and never even saw a PS4.

What We Did Learn

That said, Sony released plenty of specs on Wednesday night.

As one would expect, the PS4 will be a very powerful system, packing goodies like 1.84 TeraFlops of processing power (that’s a lot), 8GB of RAM and Blu-ray disc support. A new PlayStation Eye system uses two cameras with 1280×800 pixel resolution for enhanced facial recognition and motion tracking, though its Move controller still seems to be a wand-like device instead of a Kinect-style hands-free motion control. A new controller includes a touchpad and social features, including the ability to stream gameplay video to sites like Facebook (NASDAQ:FB).

Still, even around the specs, there are plenty of questions.

It seems likely that games will continue to ship on discs (there is a Blu-ray drive), but Sony played up cloud-based gaming. Plenty of video was displayed, but there were questions about which clips were actual gameplay vs. cutscenes. The PS4 should have the horsepower for 4K upscaling, and Sony talked up its integration with Bravia TVs, but will the PS4 be a Trojan horse that helps Sony drive 4K UltraHD adoption in living rooms (as the DVD-equipped PS2 and PS3 with its built-in Blu-ray drive did)? We don’t really know.

We also don’t know if Sony will try to lock out used games, a potential flashpoint issue between console makers, game publishers and players.

There was significant emphasis on PlayStation Vita synergy, with the PS4 having the ability to stream games to the Vita. This strategy helps the PS4 compete against the Wii U (with its standalone touchscreen controller), but more importantly, it seems to be an attempt to save Sony’s portable gaming system, which has seen dismal sales. Sony originally expected to sell 16 million Vitas (and previous-generation PSPs) last year before revising the numbers down to 12 million, then 10 million, then finally saying it was likely to hit only 7 million.

There’s no question Sony needs the PS4 to be a hit as part of its planned recovery, which is probably why it was so determined to risk ramping up hype this early in the game. Even though overall revenue was up 6.9% in 2012, the gaming division — which had often been the lone bright spot during the company’s bleakest quarters — saw its profit drop 86% for the quarter ending Dec. 31, 2012.

So, to sum up, we learned the following things:

  • The PS4 will be much more powerful than the PS3 (and likely more capable than Nintendo’s Wii U).
  • Sony is trying to leverage the PS4 to save its Playstation Vita.
  • The PS4 incorporates some touch control on its new controller.
  • Sony hopes to embrace the cloud and social gaming, The system will be available sometime in “Holiday 2013.”

Oh, it’s also called the PlayStation 4.

Confirmed game play graphics, pricing, an actual release date and what the PS4 looks like will all have to wait until later in the year.

Bottom Line

Sony’s stock is off 3% today, erasing most of the gains it accumulated in the days leading up to the new console announcement. So the ball is clearly in Microsoft’s court.

If it’s smart, it will learn from the Surface experience and the reaction to the PS4‘s no-show and hold off on an announcement for the new Xbox until there’s pricing and release dates to announce and an actual Xbox to display.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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