Japan PS3 Quantity Slashed Again…. Is the US Next?

Looks like Sony can’t get a PS3 shortage break. The Nikkei Keizai Shimbun paper reports today that due to component shortages, Sony will only have 80,000 PS3 units ready for Japanese launch instead of the originally planned 100,000 units. That’s a 20% cut. First the European launch gets delayed because of production issues, now the Japanese launch availability is crippled even more than it previously was.

No word yet if the shortage will effect North American units but, if proportional, they could be cut by 380,000 systems.  The PS2 sold out of almost a million units when launched back in March of 2000.

Meanwhile, a new report coming out of the financial services company UBS (available at Briefing.com—paid subscription required) analyzes the number of Wii consoles that have been manufactured prior to launch and pegs the figure at 2 million. In addition, the report states that at least 7 million and potentially as many as 9 million consoles are in the production pipeline and will be ready by year-end. This represents an increase from Nintendo’s publicly-announced target of 6 million Wii consoles by the end of the year.

So let’s review what this means for the holiday shopper:

  • PS3 – production problems, really expensive, FUGETABOUDIT! Your not gonna get one.
  • Wii – Pretty good inventory, cool interface make it more of an experience, reasonable price tag.

Nintendo looks like the clear winner to me.

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Social Gaming: Perplex City

Karl Long at ExperienceCurve posted a note about a company called Mind Candy whose chief product is an online game called Perplex City. Seems that the company just received $7 Million in funding, but Karl said the big story was the “multi-media” platform for this game. I had never heard of it, so I checked it out. WOW!

Perplex City is a puzzle-based “Alternate Reality Game”. It’s a virtual place, an ongoing story, a game, and real-life, and a global treasure hunt played simultaneously by tens of thousands of people around the world, all rolled into one. As for the “multi-media”platform; how about podcasts, internet video, TV, live events, websites, text messages, print, blogs, physical “puzzlecards”, a boardgame, and probably some more stuff that I haven’t yet discovered. This thing’s got more channels going that ABC’s “Lost”.

Humans are social by nature so the Social Media phenomenon is a natural outcome of a world flattened by hyper-connectivity. In gaming, I expect we will begin to see more and more of this type of thing displacing disconnected, individual gameplay. It’s only natural. Oh, and the $200K ain’t a bad incentive:-)

Battery Recalls Cost Sony More Than Money

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Sony’s PS3 isn’t launched yet, but it has already cost the company $366 million. That was expected and not uncommon when launching a new hardware platform. What Sony didn’t foreseen, however, was the massive battery recall that ended up costing them a whopping $429 million and sent their bottom line screaming into the basement. Practically every laptop maker in the world has recalled Sony’s lithium-ion batteries due to their unfortunate (though rare) habit of overheating and bursting into flames.

While Sony’s decision to reduce the number of PSPs shipped in fiscal 2006 makes a certain amount of sense in light of this financial news, its decision to lower the cost of the PS3 in Japan by 20% is curious. Such a slash will reduce what little profit the company was going to make on the hardware that would have almost certainly sold out at the full asking price.
The cost to Sony’s profits is obvious, but the more subtle damage was done to the company’s image as a mainstay of consumer technology.

Virtual Worlds as Innovation Labs

Reebok store in Second LifeAt the risk of going into Second Life overload this week, I would like to call your attention to Bruce Nussbaum’s Business Week Online blog posting today entitled “Second Life, MySpace, YouTube–It’s All About Mining Intentionality“. 

I have frequently commented that SecondLife offers a unique stage for prototyping, testing and innovation.  American Apparel is doing it.  So is Adidas, Reebok, Starwood Hotels, Scion, and others.  Mr. Nussbaum’s piece really drives the point home describing the opportunity as “mining intentionality”. 

It’s about intention, what people intend to do if given the possibility. Intentionality is part of the ethnography space, part of that unmet needs thing. My guess is that every company, every organization will want to be in Second Life to get at, to mine, this intentionality, as a basis for developing new products and services.

That’s what I’m talking about!!!

DVD Jon, DoubleTwist crack Apple’s FairPlay

Jon Johansen (a.k.a. DVD Jon), the 20-something hacker widely known for helping crack the piracy protections on DVDs several years ago, is taking on Apple Computer again. He has reverse-engineered Apple’s FairPlay, the digital rights management technology used to make iPod and iTunes a closed system.

He has started DoubleTwist Ventures to license the technology which will make other online music stores work with Apple’s iPod device and let iTunes songs play on gadgets other than the iPod.

In an interview with ZDNet, Monique Farantzos, Johansen’s business associate and DoubleTwist co-founder provides details on the company, the technology.  It’s easy to understand why the start-up has been profitable since day one:

When you buy a DVD, you know that the DVD will play on your Toshiba or Sony or Philips player, but when you buy music or video online, you don’t have that. It is kind of like the zoo: Every animal is singing a different tune. We hope to make sense of that, and we have developed a technology to enable that.

No matter how much you wall in your garden, people will find a way to make things simpler.

Are Virtual Worlds the Next Big Thing?

The Internet, at least as experienced by most users, feels as if it has at last plateaued. This is an illusion. Forces are coalescing that will produce a shift comparable at least to the spread of broadband. This change will have enormous financial, cultural and political repercussions”.

This is the view of TCS Daily columnist Patrick Cox in a fascinating article published earlier this week. The “change” that Mr. Cox envisions will be the transition to, and large-scale participation in Virtual Worlds like Second Life and World of Warcraft. He sets the stage for his argument against those who would dismiss the idea through a detailed description of the early days of the Internet. For those who are not aware of the ancient history of the mid-1990’s, Netscape Communication’s Navigator browser was the disruption that would open up the Internet for John Q. Public:

For the first time, especially when Netscape added the ability to easily put content on the Web, anybody could publish and anybody could access. The metaphorical walls fell and the Web was truly born. For the first time, the Internet was one place, accessible to anybody, and the astonishing transformation began.

Cox goes on to describe the vectors that are converging which he believes will take Virtual Worlds into the mainstream. Specifically, he cites:

  1. The benefits of 3D space over 2D space
  2. The world of gaming as the frontier of 3D Virtual Worlds. Cox points out that the social interaction aspects of today’s VR environments are more appealing to younger game players who have grown up in an IM, MySpace world.
  3. The profit potential for companies who are early to market with 3D Virtual Worlds (World of Warcraft figures are cited).
  4. The early adoption by Koreans who are always way out in front in terms of technology adoption.
  5. The entry of Hollywood into MMOs based on movie titles. Cox cites a nearly one-to-one correlation between the dropoff in young male movie attendance and the gains in MMO participation.

None of these things are disruptive, but they do prime the pump for something that is. That something is a company called Multiverse and, not coincidentally, it’s made up of a team of core developers from Netscape’s early days. What they are developing is equivalent of a virtual world browser for MMOs.

Their plan is to provide virtual world creators the client, server, and development tools to create an MMO world. The entire technology platform is free for non-commercial use, so academics are paying nothing to create economic, architectural, sociological and other simulations. For-profit enterprises would pay royalties, but only when their games or other applications collect money from consumers, not before.

This is significant because, until now, creating a complex virtual world required tens of millions of dollars in initial development costs alone. The Multiverse technology, currently in beta-testing, claims to lower the cost of virtual world production to a fraction of its current stratospheric level. For many purposes, such as personal online spaces, there would be no cost at all.

Most importantly, however, all these Multiverse-based worlds, and many are already in development, would be compatible. With the Multiverse client software, users will be able to access any virtual world built using the company’s technology. Virtual worlds will become, in effect, ubiquitous. The Metaverse.

The company is headed by same entrepreneur responsible for Netscape’s Navigator: Bill Turpin. His team includes Netscape veterans Rafhael Cedeno and Robin McCollum, who built critical Netscape server technology still in use today, and co-creators of RSS; Jeff Weinstein, who coded the world-changing SSL; and Corey Bridges, Navigator product manager who then went on to launch companies like Netflix and Zone Labs. On the entertainment side, film director/producer James Cameron, of Terminator and Titanic fame, has thrown his lot in with Multiverse, joining its board of advisors.

Some folks commenting on Cox’s story have pointed out errors and omissions in the historical overview, but that doesn’t change the overall hypothesis. I personally think he has it right. What do you think??