Comment: PSX failure is a blow to Sony's convergence dreams

It's tempting to look at our report this week that Japanese retailers are slashing the price of the PSX by almost half in an attempt to shift stocks of the unit and conclude that Sony's entire concept of media convergence has bombed drastically. Indeed, some of the company's more regular critics have already piled in to opine that the failure of PSX - and let's be honest here, it's pretty hard to spin the performance of the device as much other than a failure - means that Sony's entire strategy needs a rethink.

On the surface, that argument actually holds some water. While Nintendo has never been a fan of the concept of adding multimedia functionality to its game consoles, and Microsoft has gradually been edging further and further away from it over the past couple of years, Sony still believes fervently that convergence is the future. The dream, as far as anyone outside the company can gather, is a household where a server-like system based on the PlayStation 3 architecture sits in the living room, feeding content and connectivity wirelessly out to smaller, dumber PS3 units and portable PSP units spread around the rooms of the house and the pockets of its inhabitants. This is Sony's gameplan; it's how it will conquer the media market, and it's arguably a fear of the impact that this vision would have on the domestic computer market that prompted Microsoft to enter the console war in the first place. This is what the battle for the living room is all about.

However, the reality seems to be diverging from the vision, and PSX is the biggest blow it has suffered to date. Although the system has its problems - it was hit with some extremely bad PR when it launched without a number of promised features, for example - it's still a pretty good product, with a very competitive price, but the Japanese consumer doesn't seem to be interested. Two crucial experiments appear to have failed - the convergence of multimedia video system and games console hasn't had the appeal that Sony might have wished for, and even more worrying, the application of the Midas touched PlayStation brand in the consumer electronics space didn't bring the Yen rolling in, as many expected.

PSX itself doesn't really matter, of course. In many ways, it's a product that Sony threw out to the market to test the water and prepare consumers for the convergence concept - roughly the same approach that the company took with the online service for the PlayStation 2, which was a blatant attempt to find out what works and what doesn't before moving on to the main event, which will presumably be the online service for PS3 and, to an extent, PSP.

However, the results of Sony's toe in the water are a cause for concern. Later this year, another device which touts convergence as one of its main selling points, the PlayStation Portable, will arrive on shelves in Japan. Sony wants people to accept the system as a handheld music and movie player, and potentially even a wireless network access device, as well as a games console - and probably expects them to pay a premium for it as such. Further down the line, everything we've heard to date about PS3 - which admittedly isn't much - suggests that Sony has designed it from the ground up with its idyllic vision of a media generation household based on convergence gaming, music and movie devices in mind.

The trouble faced by PSX can be read in two different ways. Sony optimists - and there are unsurprisingly plenty of those, in an industry so utterly dominated by the Japanese giant - will argue that PSX has allowed Sony to learn of a great many pitfalls and problems facing convergence devices, and the public attitude to them, so that they don't make those same mistakes with PSP and PS3. Critics, however, will argue that the reaction to the PSX points at a far more deeply ingrained problem - the fact that nobody actually knows for sure whether people want convergence devices in their homes or not. PSX seems to have pointed, at least to some extent, at a basic resistance to these systems among the public. In light of this, can Sony still bet the farm with confidence on our desire to buy integrated gaming and multimedia devices?