NORM:
We've tackled Nintendo. We've tackled Sega. And now, it's time to look at
Sony's three biggest mistakes. Sony entered the video game industry
with the PlayStation in 1994, and has been a major player ever since. But they didn't get there
without a few bumps in the road. So let's dive in to what I think
are Sony's three biggest mistakes of all-time. Anyone who has a PSP or a PS Vita is familiar with Sony's insistence on using proprietary memory. You know, Sony has a long history
of trying to use their own formats. Betamax, MiniDiscs, digital audio tapes. But when it came to video games, Sony annoyed consumers by using
its own memory formats. It started with the PlayStation Portable in 2005. Sony was in the memory card war, pitting its memory sticks
against SD cards. All of Sony's electronics used memory sticks. Camcorders, TVs, laptops, and more. So naturally, when they released
the PlayStation Portable, Sony forced consumers to buy their memory sticks. But these were more expensive than SD cards, and of course, you needed
one to save your games. Soon, SD card-to-memory stick adapters popped up to get around the problem. The issue got even worse
with the PSP Go, which was a completely digital version of the PSP. The system had 16 gigabytes of internal memory, which usually wasn't enough. By 2010, it was clear that SD cards
would win the memory card war. And memory sticks slowly faded away. Surely, Sony's next handheld
would use the industry standard, right? Nope! Enter the PlayStation Vita, which used proprietary PS Vita memory cards. And of course, the cards were
required to save games, download apps, games, updates, as well as store photos,
videos, and music. The Vita had no internal memory. This was incredibly frustrating for several reasons. The first being that Vita memory cards
were way more expensive than SD cards. An 8-gigabyte Vita memory card was $30. A standard 8-gigabyte SD card was only $10. Second, the PS Vita was released in 2012, at a time when digital downloads
had become a standard way to buy games. And for a handheld,
it was even more common, since you don't wanna carry
around a bunch of games. So having a lot of memory was important. A 32-gigabyte Vita memory card
cost an astounding $100! Sony claimed they used proprietary memory cards for compatibility reasons, and to combat piracy. But it felt greedy, and Sony's anti-consumer reputation grew. The idea of having to buy an expensive
memory card just to use the Vita turned off potential buyers. Just imagine buying a $249 handheld console along with a $100 memory card. The Nintendo 3DS,
the Vita's main competition, cost $170 at the time, used standard SD storage, and came with a 2-gigabyte card. And of course, people soon came out
with adapters to use SD cards with the Vita, which required you to modify the console. It's funny how forcing people
to use proprietary memory to combat piracy and hacking leads to piracy and hacking! It's too bad, because the Vita was
a really nice piece of hardware with a lot of potential. It did eventually find its own niche market, but it could've been so much more. Sometimes it felt like Sony didn't
really understand the market. And this next mistake made that very apparent. I worked at GameStop
during the PS3 launch. And I can personally vouch
for how bad it was. Let's begin with their awkward E3 press conference in May of 2006. Sony unveiled all the details of the PlayStation 3, and showed off some of its games. This resulted in some classic moments. KAZ HIRAI:
It's Ridge Racer. Riiiiidge Racer! Remember that one? BILL RITCH:
Uh, Genji 2 is an action game, which is based on Japanese history. So here is this giant enemy crab. NORM:
At the end, they revealed the price. A 60-gigabyte PlayStation 3
would cost a whopping $600! A 20-gigabyte version would cost $500. The Nintendo Wii was going to cost $249. The Xbox 360, which was released
a year earlier in 2005, cost $399. One big reason the console was so expensive-- Blu-ray! It was the latest optical disc technology, and Sony was behind it. Blu-ray was competing
with another optical disc: HD-DVD. By putting Blu-ray in the PS3, Sony could establish a good user base and win the disc war. But that came at a cost. It cost Sony more than $800 to make a PlayStation 3, which meant they sold each console at a sizable loss. Now, back in 2006, $600 for a Blu-ray player
was a really good deal. The problem was that Blu-ray
was also very new. And the general population wasn't quite ready to move on from DVD. Sony was too arrogant to see the problem. The PlayStation 2 had been the clear winner
of the previous console generation. So they were feeling good. But retailers and analysts said the PS3's high price would turn off consumers. Sony waved off the criticism. Sony Computer Entertainment president
Ken Kutaragi said the PS3 was: There was also the PS3's controller. It looked identical to the PlayStation 2's controller, which was nice, considering early promo shots showed this weird boomerang design. But it lacked an important feature: Rumble. Yes, the PS3's controller had no rumble at launch! Instead, it had Sixaxis,
their new motion-control technology. But why no rumble? Sony's Phil Harrison stated: Sony also claimed rumble
would interfere with Sixaxis. The more likely reason, however, was that Sony was tied up in
a patent infringement lawsuit with a company called Immersion, over the rumble technology. Microsoft had already settled
with Immersion back in 2003, and paid them $26,000,000. Sony finally settled with Immersion in March of 2007, and had to pay them more than $150,000,000. And, surprise, surprise! They soon released the DualShock 3 controller, which had both rumble
and Sixaxis support. Then there were the launch titles. In North America, the PlayStation 3 had 13 launch titles. Resistance: Fall of Man was the best of the bunch. Ridge Racer 7 was good,
but not terribly exciting. Genji, well-- We know about that. RITCH:
Attack its weak point for massive damage. NORM:
When I was at GameStop, PS3 owners were constantly disappointed with their game selection. But they held out hope for one
that was coming soon. Lair. "Just wait until Lair", they would say. Lair was being developed by Factor 5, the studio behind the popular
Star Wars: Rogue Squadron games. But then Lair came out, and... it was kind of a disappointment. The biggest complaint--
The awkward Sixaxis controls. To top it off, the PlayStation 3's
online offerings fell way behind, compared to the Xbox 360. Xbox Live was robust and easy to use. PlayStation Network was sluggish,
and the online store ran off a webpage. Seriously! One reporter said: The PlayStation 3 launched on
November 17th, 2006 in North America. And because it was the holiday season, it sold relatively well. But afterward, sales came to a halt. In its first full year on the market in 2007, Sony sold 2.56 million units. By comparison, Nintendo sold 6.29 million Wiis, and couldn't keep up with the demand. Microsoft sold 4.62 million Xbox 360s. IGN's review of the PS3 launch said: Oh, yeah, and remember the baby ad? Yeah. The baby ad. For me, personally, I went with the Xbox 360. It was cheaper, it played many of the same
games as the PlayStation 3, and Xbox Live was fantastic. The PS3's launch was a wake-up call for Sony that they shouldn't rest on their laurels. Sony would eventually turn things around. Production costs lowered, which allowed them to drop the price of the system. They churned out some great exclusive titles. And they ran those entertaining
"Dear PlayStation" commercials. But they still had some kinks to
work out on the PlayStation Network. Because the flaws in that system created the biggest mistake Sony has ever made. It all began in March of 2010, when Sony announced they were
removing OtherOS functionality from the PlayStation 3. OtherOS allowed users to install
third-party operating systems. The majority of users thought nothing of it. But the homebrew and hacking
community were frustrated and began looking for ways
to jailbreak the system. Less than a year later, on January 2nd, 2011, George Hotz successfully jailbroke the PS3 and posted instructions online. Sony caught wind of it and sued Hotz. Sony claimed the jailbreak allowed people to play illegal copies of PS3 games. They also announced that anyone caught using unauthorized software on their PlayStation 3 would have their console banned for life from the PlayStation Network. From there, the fight only got worse. Hackers in an IRC chat combed over Sony's security and discovered it was flawed and outdated. On April 2nd of 2011, the hacker group Anonymous launched a distributed-denial-of-service attack on Sony's servers, in retaliation for Sony's lawsuit against George Hotz. But five days later, Anonymous halted their attack, stating they didn't wanna harm Sony customers. Just Sony. People thought that was the end of it. But 10 days later, Sony was hacked again. Only this time, it was far more serious. Hackers broke into the PlayStation Network and stole personal information from more
than 77,000,000 user accounts, including names, addresses, usernames, passwords, emails, purchase history, and more. And most of the information was unencrypted. Sony detected the hack two days later, and on April 20th, they shut down PlayStation Network due to "technical issues". Later, they claimed they had
been the target of an intrusion. And for a while, that was
all the information the public had. But people wanted answers. What was going on? How long would the network be down? Many thought Anonymous had
brought PSN down again. But Anonymous denied any involvement. Finally, on April 26th, one week later, Sony announced they had been hacked, and that the personal information of their users had been compromised. Then came even more bad news. They couldn't rule out the possibility that the hackers got access to
people's credit card information, too. People were stunned. Some were angry. They had trusted Sony with their information. Just how carefully did Sony safeguard that data? Further, why had it taken Sony nearly a week to tell people that their data had been hacked? For that last question, Sony explained themselves via a blog post on their website. They said it took a while
to realize what was going on. They found out about the intrusion pretty quickly, and that's why they shut the network down. But then they brought in outside experts, including the FBI. The investigation took several days. Only then did they understand exactly what happened. Governments around the globe took action. Lawsuits hit courts. The U.S. House of Representatives
held a hearing on data theft. For that hearing, they demanded a detailed
written explanation from Sony. They asked whether Sony had identified the hackers. Sony said no. They asked how the hackers managed
to gain access to so much information. Sony didn't go into detail. They also feared that publicly announcing
precisely how they'd been hacked would give people a blueprint for how to hack similar companies. On May 1st, Sony executives issued a public apology for the incident. But to make matters worse, the next day, they announced that Sony Online Entertainment had also been hacked, compromising some 25,000,000 more accounts! It was an absolute mess! And it wasn't just that people
couldn't play games online. Apps like Netflix and Hulu went down. Small indie studios couldn't launch their
games on the PlayStation Network. Even big retail releases were affected. Portal 2 was released during the attack on April 18th. And with PSN down, PlayStation users couldn't play online together. Many users cancelled their credit cards out of fear that their information was stolen. In total, the PlayStation Network was down for 23 days. Sony estimated they lost $171,000,000 during the down time. On May 14th, the PlayStation
Network began coming back up. Sony also announced a Welcome Back program, which included a free month of PlayStation Plus, two free PS3 games, two free PSP games, and a year of free identity theft protection. Sony was already behind in online functionality, compared to their competitor Microsoft. The PSN hack really didn't help their cause. To this day, no one has ever been arrested in connection with the attack. It took a long time for Sony to regain
the trust of their consumers. Their lack of transparency and flawed security were huge problems. The deputy commissioner of the
British Information Commissioner's Office ripped Sony apart, saying: And being one of the largest data breaches in history, it's a no-brainer that the PSN hack is Sony's biggest mistake. So there you have it. Sony's three biggest mistakes. Which mistakes will I go over next? Atari? Microsoft? Maybe NEC? Who knows? Did I miss a Sony mistake that you
think should've made the top three? Feel free to tell me about it in the comments. That's all for this episode of the Gaming Historian. Thanks for watching! FEMALE NARRATOR:
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