Comment: Sony's biggest battle is a battle with itself
It's always hard to tell how things are actually being decided at high levels within major companies like Sony and Microsoft, but to an outside observer, right now it looks like Sony is a company which is waging a battle with itself. The outcome of this battle will have a major impact on the future not only of the videogames industry, but of the digital media industry as a whole - and may determine the survival, or otherwise, of a firm which has led the market for consumer electronics for decades.
The essence of this struggle is that while some elements of Sony understand the need to embrace open standards, coexist with competing systems and give consumers some degree of freedom in terms of how they use the products they have paid for, there are clearly factions at the corporation who don't grasp how crucial that approach is, and wish for a more tightly locked down, proprietary future. It's a clash of opposing viewpoints which is only to be expected in a company whose roots may be in the creation of hardware to view media, but much of whose current success lies in the creation of the media itself, via Sony Pictures, Sony Music and Sony Computer Entertainment.
This week, it was exemplified by two astonishing moves from Sony. First came the revelation that Sony Music has been placing software on its CDs which borrows much of its behaviour from malicious virii, and may well have opened major security holes on the computers of any users who placed the CDs in their drives. The firm has pulled back from this reprehensible action, which was taken in the name of copy protection, but the damage is done - both in the form of two million "infected" CDs, and a nasty black mark on Sony's name that goes far beyond the geek community and right out to mainstream users.
The second peculiar move was the patenting of a technique which would lock a piece of software - be it a game, a video or a music disc - to the first piece of hardware it's inserted into. This kind of draconian protection immediately raised the hackles of the consumers who spotted it, and Sony was quick to quash rumours that it might be used on PlayStation 3 - but ultimately, the firm obviously contemplated using it in some context, and while we can all breathe a sigh of relief about the fact that it's not going to be on PS3, it's still worrying that Sony is thinking about this kind of technology at all.
This isn't new thinking for Sony. This, after all, is the company which managed to slaughter its own chances of competing with Apple's iPod portable music players by not supporting the incredibly popular MP3 music format with its own players for years - thinking believed to have been informed by the fact that MP3 was widely used to distribute music illegally on peer to peer networks. It's also the company behind the Blu-Ray disc format, which Microsoft refuses to support for what are, surprisingly in ways, all the right reasons - namely the fact that Blu-Ray won't allow users to rip content onto their consoles or media centres in a secure fashion, with Sony preferring to keep the content locked away on annoyingly fragile optical discs.
In ways, it's easy to sympathise with the reluctance of Sony executives to properly embrace open media standards and fair use systems. The business case for allowing users to do as they please with media is a non-obvious and in ways frightening one for people who've just watched the music industry take repeated gut-punches from users doing just that - in this instance, ripping and sharing their music with each other online.
However, this may well be the difference between life and death for Sony, because users are no longer happy with the idea of being locked into what they can and can't do with media they've acquired. Sony's competitors understand that, at least to a certain degree. They understand that the music business wasn't damaged by evil pirates sitting around plotting their downfall, it was destroyed by the failure of the music industry to offer a legal, sensible alternative to an entire generation of people who wanted their music on their PCs, streamed over their networks and loaded onto their miniscule flash memory players - and for whom the only route to that desired result ended up being peer to peer networks. They understand, at least partially, that if you lock down what a legitimate user can do with media so tightly that he can't acquire it, watch it, play it or listen to it where he wants and when he wants, he'll become frustrated and may well turn to the pirate version - which carries none of the restrictions that you unfairly impose on your paying customers. They understand that if you treat customers like criminals, you'll turn them into criminals.
Some parts of Sony understand that too. You can play MP3s on the PSP or rip your DVDs to watch them on the handheld console, and all of the firm's new digital music players support open standards. Some other parts of Sony clearly don't, and are furiously working on barricades to prevent the onset of the digital future. Which of those sides holds the upper hand - and at the moment, we suspect it's the former - is going to be a factor that has an impact on Sony, and the digital media market at large, for years to come.