Performance Anxiety: Sony's Fear of Porn Blocks Potential PlayStation Profits

Last Updated Jun 14, 2010 1:18 PM EDT

Sony (SNE) lost the BetaMax versus VHS battle more than two decades ago because it wouldn't tried to keep porn off the VCR. some thirty years later, it is reportedly making the same mistake again with the PlayStation 3. The company has marketed the PS3 as a mature machine for adults, but behind the scenes Sony has pushed away what it deems unfit content -- and could be missing a potential leg up on its more conservative (and better selling) competitors.

Tim Ingham at ComputerAndVideogames:
Vivid Video -- the world's largest porno creator -- has told CVG that it opened discussions with Sony on the matter, but that the negotiation "didn't lead anywhere".

CVG understands that Vivid requested that Sony set up an age-locked area to download and stream adult movies on PS3 -- to complement the console's existing portfolio of 'mainstream' films and TV shows.

"We started conversations with Sony but they didn't lead anywhere," Vivid founder and co-chairman Steven Hirsch told CVG. Hirsch revealed last year that he was keen to push his product onto console - and was targeting Sony.

However, all might not be lost for gaming porn fans: Hirsch could now turn his attention to Microsoft. "If we could get further than we did with Sony [on Xbox 360], we'd be very interested," he added.
Vivid's Steven Hirsch is obviously trying to bait Microsoft (MSFT) into negotiations (or Sony back into a conversation), but his point is valid: Pornography will eventually come to the video game consoles. Nintendo (NTDOY) Wii has a good, albeit shaky lead, as well as a family image to uphold. Microsoft XBox 360 has a solid user base, strong online communities and high rated games. Sony PS3 is in third place, fighting a losing portable battle and trying to woo Nintendo and Microsoft audiences. It could use all the help it can get.

Here's why Sony should reconsider:
  • Sony is an entertainment company: Plain and simple. While Microsoft is known for tech and Nintendo for games, Sony is a sixty-five year old entertainment company. If anything, Sony should be pushing the boundaries of what entertainment a video game system can deliver.
  • Adult entertainment is still a huge profit center: The Internet porn industry is sagging, but the downloadable in-room entertainment remains stable. To quote Steve Kroft of 60 Minutes, "...the big hotel chains: Hilton, Marriot, Hyatt, Sheraton and Holiday Inn... all offer adult films on in-room pay-per-view television systems. And they are purchased by a whopping 50 percent of their guests, accounting for nearly 70 percent of their in-room profits." Even a fraction of that success on the PlayStation 3 would make adding a few adult movies worth Sony's time.
  • It is where others can't or won't go: Nintendo is too wholesome to dabble in this arena. Microsoft could bring it to the XBox 360, but its recent "porn-free" Windows Mobile 7 app store decision suggests it's headed in the opposite direction. The other multimedia threat, Apple (APPL), obviously isn't going to go there, either. Sony has it all to itself.
Sony has leapt at the chance to stream and download extremely violent, controversial or questionable movies from its extensive catalog to PlayStation 3 owners. The best business decision would be to tighten up the already enabled parental controls and act like it has the multi-purpose living room machine it purports the PlayStation 3 to be.

Photo courtesy of capitansponch.

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