Analysis: Sony looks to PS4 to reverse its fortunes

The reveal was just the beginning. Sony's unveiling of the PlayStation 4 Wednesday was the start of a long, carefully planned marketing campaign that will culminate in its release this holiday season. And while the company might be focusing gamer attentions on the new hardware, the touchscreen controller and several big name games, what's really at stake is a whole lot bigger. The PlayStation is a cornerstone of Sony's ongoing rebuild -- along with the mobile and digital imaging. And if the PS4 has sales that are as disappointing as the PS3, it could be devastating. "In many parts of the world, [Sony] is bordering on irrelevance compared to where it was 12 years ago," says P.J. McNealy, CEO and founder of Digital World Research. "There's still a core market segment that loves the brand, but that market share is shrinking. They need to raise their base." On a gut check level -- as well as a checklist level -- the company seems to be hitting a lot of the important marks. The focus on social integration is a wise move, given how quickly that field is growing in the video game space. It also gives Sony the opportunity to establish a viral presence on YouTube and other social outlets, as funny (and perhaps particularly skilled shots) are bound to be circulated widely. Integrating today's most popular technology -- smartphones -- is also smart. To ignore them would be ludicrous and self-delusional. All in all, Wednesday's press event was a solid triple for the company. It failed to knock it out the park, though. The reveal that Destiny, already slated for PlayStation 3 and Xbox 360, would launch on the PS4 was a bit anticlimactic -- and the porting of last year's Diablo III wasn't exactly the barn burner Activision Blizzard and Sony were likely hoping for. But word that Bungie would be creating exclusive Destiny content for the PS4 was a positive -- and will certainly be a bragging right for Sony in months to come. (Expect lots of inferences that the new PlayStation has stolen Microsoft's crown jewel.) Similarly, Gaikai's Dave Perry had lots of grandiose visions to discuss, but none of the truly big ones -- like backward compatibility through the cloud and PS4 to Vita game transfers -- seemed to be on the immediate horizon. And investors are savvy enough to know that Sony has made those sort of promises in the past and failed to live up to them. Then there are the big questions Sony didn't even bother addressing, most notably price. "They need to show that they've figured out... a value proposition that doesn't start at $600, and they need to figure out what their brand means now," says McNealy. And while it's still highly unlikely that the system will block used games, the fact that Sony didn't squash the whispers means they'll continue to hang over the company -- and investors will continue to worry that the company may alienate a segment of its audience. (Also, it's worth noting that the lack of clarity on the issue will continue to hang over GameStop's stock.) But Sony certainly succeeded in throwing down the gauntlet for Microsoft. And it made a pretty good case that consoles, while they're evolving, are hardly dead. "Just as a phone is no longer just a phone, a console is no longer just a console," says McNealy. "These devices will still be worthwhile and it will be a nice package to get entertainment into the home."