Three Steps Back

Eighteen months ago, the specialist media reacted with outrage at Microsoft's stunted backwards compatibility plans for the Xbox 360 - and for months after the launch of the console, Microsoft spokespeople ranging from rank and file PR men to the firm's games boss Peter Moore were regularly put on the spot over the firm's slow and unsteady progress towards making the bulk of Xbox games work on the new console.

At the time, there was much debate over how important backwards compatibility actually is - with some commentators dismissing the functionality as a red herring, a mere distraction that doesn't really affect consumer decisions when it comes to buying a console. However, more level heads prevailed to a large extent, pointing out that beyond the realms of hardcore gamers, few consumers want multiple boxes under their televisions in order to play games - and fewer still want to throw out their existing library of games when a new console turns up. All throughout the debate, fingers were pointed at Sony for comparison; Sony, whose PS2 had been almost perfectly backwards compatible with the PSone, and who promised that the PS3 would emulate that success.

Until last week, Sony kept that promise - with the US and Japanese model PS3s offering excellent compatibility with titles for previous PlayStation home consoles. However, we now know that the European PS3 which will launch later this month will be a redesigned model. Full backwards compatibility is out; a Microsoft-style software backwards compatibility solution is in, a move which Sony presumably hopes will cut costs early in the lifespan of the console.

Nobody doubts that Sony is desperate to bring down the manufacturing cost of the PS3, but perhaps we didn't realise until now quite how desperate the firm really is. The European model (and presumably future shipments in the US and Japan) will also feature a new chassis which is cheaper to build, which is exactly the kind of under-the-hood cost saving one expects from a console firm - but the fact that Sony is so keen to save costs on building the PS3 that it's willing so strike out functionality which it has boasted about quite openly for a couple of years comes as a surprise, and a disappointment.

European consumers, quite rightly, feel shafted by the decision. They are already facing a console launch months later than promised, and at a price point much higher than consumers in North America and Japan are being asked to pay - a price disparity which Sony has still completely failed to justify, even once taxes and fluctuating exchange rates are taken into account. Now it transpires that their expensive, delayed console is to be less functional than the cheaper systems which were being purchased elsewhere in the world three months ago. It's no wonder that not only are consumers hacked off, but that the mainstream press has also seen fit to report Sony's announcement in less than glowing terms.

Of course, the old debate has been rekindled - how important is backwards compatibility anyway? The answer in this case is simple - however important it was for Microsoft, it's at least five times more important for Sony. Five times more people bought PS2s in the last generation than bought Xbox systems; that's five times more people with a library of games they'd potentially like to play on their new system. Five times is conservative, though; you could argue that since Sony's demographic last generation included far more "mainstream" consumers than Microsoft's, there are far more people out there with PS2 games who are unlikely to want two consoles under the TV just so that they can play their old games. Alone, it's a factor that may not be enough to prevent many people from buying a console; but it's an annoyance, and right now, Sony could do with not annoying its potential customers any further.

Individual annoyances pile up, and between them, they become a reason not to buy a system. It might still be madness to bet against a company with a pair of successes like the PSone and PS2 behind it, but the simple fact of the matter is that there are dark clouds over the PS3 which were meant to dissipate with the launch of the console, and have done nothing of the sort. Instead, they have formed into a brooding mass which looms over the entire future of the platform. When a console hits the shelves and people start playing the games, much of the speculation and negativity which has dogged it up to that point generally drops away - but with PS3, if anything, it has redoubled.

This latest debacle over backwards compatibility simply adds to a long list of woes which Sony faces - a litany of PR problems which are winding their way through the mainstream press, no longer confined to the specialist media. In America, reports of PS3 units sitting on shelves unsold are rife, and SCEA's public firefighter Jack Tretton has lost vast amounts of credibility for his much-derided attempts to claim otherwise - with his statements having done little but fuel hostility towards the platform and the company. Here in the UK, the official line is that PS3 pre-orders are remarkably high; but with PS3 bundles being downgraded in price already, it doesn't take the flood of anecdotal reports to the contrary which we've seen from retail insiders in the last week to see that this claim is on shaky ground.

The tide of public opinion is against Sony right now, and there's only so far the company can go with the assumption that there are many consumers out there who are loyal to the PlayStation brand. After all, those consumers don't have to defect to the Wii or the Xbox 360 en masse for Sony to be in serious trouble with its next-gen ambitions - all they have to do is decide that the price is wrong, and stick to their PS2s for the medium term. If Sony can't turn around its fortunes and get the media and, crucially, the core opinion forming gamers back on side, then there's a danger that even its loyal fans will find that their loyalty doesn't stretch to nearly 500 pounds spent on an early-adopter piece of hardware - and if that happens, the firm's dreams of catching up with Microsoft's head-start by some time in 2008 will go up in a puff of smoke.

How can Sony reverse this situation, and salvage 2007 for the PS3? Software is part of the answer, of course - the firm desperately needs to get solid, reasonable dates on some of those headline exclusives, and it needs to make sure that the public sees them coming and is confident of the release schedule for the PS3 in the next 12 months. However, before bringing a clearly skeptical public on-board with a solid release schedule, Sony could try one other thing - namely making sure that there are no more nasty, headline-grabbing surprises in store for its sorely abused European consumers. Even rip-off Britain has a point where its tolerance will run out.