Sony Entertainment will be gone in 3 years

There it is – I said it. I am sure many people will not believe this but let’s face it – it is happening.

Last night I wanted to use some of my spare time connecting to the Playstation Network (for the first time in month – you know they had a small outage). So far so good – I haven’t connected in at least 8 weeks and my XBOX got as much use as it did for the whole of last year (with the exception of the Kinect effect in January). So I forgot my password. No big deal, happens all the time if you use complex passwords. I requested my password to be changed, PSN informed me I got an email send to my inbox to finish the process. So I open the email, click on the link and receive:

“This Service is down for Maintenance” – that’s all. I cant change my password, I cant connect, I change the console.

I am sure I am not alone here, customer care and communication through this whole outage was terrible. And now, even though I received my “Welcome back” mail (hey, guess what Sony, I was never gone – you were!) I cant login and the only thing I get is “down for Maintenance”. I tried again 3 hours later – same message.

Again – as an isolated incident – no big deal. I get it, it’s the Internet, it goes down sometimes. But 6 weeks and still issues? Let’s face it – this is ridiculous. Any other company would be bankrupt at this point. And I suggest Sony Entertainment is too – they just don’t know it yet.

PS3 sales year over year are down by only 7,8% – XBOX sales are only up by 16,55%. But the hardcore gamers, the ones that cannot live without a working network are going elsewhere, sure some return to the PC because they don’t want to buy another console, some go to the XBOX (and many more would if XBOX Live would be a free service for online gaming).

Matter of fact is that Sony ends up with an old console, no new features (Move compared to Kinect is just terrible) and losing its core audience – and at least for now no plans to replace the PS3 with anything exciting.

So if we conclude that the PS3 and PSN are dead what is left? The PSP is already losing big-time to Nintendo and this wont change in the long run (even though quite curiously PSP sales are up compared to Nintendo DS sales in 2011). The halo effect from the PSN credit card disaster will limit Sony in all it’s markets, the image in the eyes of consumers is shattered and even a couple of free games for every returning PSN customer wont change this (especially, if the selection of games is limited to some 2-3 year old classics). 

Stock price is down 26% for the last 3 month. Some might say a good time to buy – my prediction is that Sony will be the first victim of mismanaged online offerings that we will study in business schools in a couple of years.