glory days

The first three generations of PlayStation sold more than 300 million units, pioneered a new style of serious video games and produced hefty profits. PlayStation 4, introduced by Sony Wednesday evening, is a bold bid to recapture those long-ago glory days.

The first new PlayStation in seven years was promoted by Sony as being like a “supercharged PC.” It has a souped-up eight-core processor to juggle more complex tasks simultaneously, enhanced graphics, the ability to play games even as they are being downloaded, and a new controller designed in tandem with a stereo camera that can sense the depth of the environment in front of it.

All of that should make for more compelling play for the hard-core gamers at the heart of the PlayStation market. The blood effects in Killzone: Shadow Fall, shown to a preview audience of 1,200 at the Hammerstein at Manhattan Center Wednesday night, looked chillingly real.

The console itself was never shown during the two-hour presentation. No release date was given, although before the Christmas holidays is a good possibility. No price was mentioned.

With PlayStation 4, serious games are about to become much more social. A player can broadcast his game play in real time, and his friend can peek into his game and hop in to help. Also, players will now be able to upload recordings of themselves playing and send them to their friends.

These and other new features cannot hide the fact that PlayStation 4 is still a console, a way of playing games on compact discs that was cool when cellphones were not smart.

Much of the excitement in video games has shifted to the Web and mobile devices, which are cheap, easy and fast. Nintendo’s new Wii, introduced in November, has been a disappointment. Microsoft’s Xbox, the third major console, is racing to become a home entertainment center as fast as it can.

“Today marks a moment of truth and a bold step forward for PlayStation,” Andrew House, chief executive of Sony Computer Entertainment, told the crowd. He said the new device “represents a significant shift of thinking of PlayStation as merely a box or console to thinking as a leading authority on play.”

But the new PlayStation will have a difficult time, like the character in Killzone who was shooting at the people in the helicopter while hanging from the helicopter. Sales of consoles from all makers peaked in 2008, when about 55 million units were sold, according to the research firm I.D.C. By last year, that was down to 34 million.

For 2014, Lewis Ward, I.D.C.’s research manager for video games, forecast a recovery to about 44.5 million.

“From peak to peak, we’ll be down about 10 million,” he said. “There was attrition to alternative gaming platforms like tablets, but the trough was exacerbated by the 2008-9 recession. It did not permit as many people to buy who under normal economic conditions would have bought a console.”

That was reflected in Sony’s miserable financial results. The company has lost money for the last three years, hampered not only by slower console sales but also by a range of unexciting electronic products, a strong yen and the 2011 tsunami that struck Japan.

Analysts have made dire remarks about the one-time powerhouse’s viability. But Sony seems to have bottomed out, helped by a yen that has now weakened. Sony executives said this month that they expected a profit in 2013.

Sony’s new chief executive, Kazuo Hirai, has a longtime personal connection to the PlayStation franchise and is making it one of the core elements of a more tightly focused company. Mr. Hirai became known for some of his more confident statements about the PlayStation, particularly a 2006 swipe at Microsoft: “The next generation doesn’t start until we say it does.”

These days, the next generation is playing games on the Web. Console makers typically sell their consoles for a loss and generate profit through sales of games. In 2012, American consumers spent $14.8 billion on game content, including computer and video games, down from $16.34 billion in the previous year, according to the NPD Group, a research firm.

Instead of buying traditional games, which typically cost $50 or more, many consumers are being drawn to the cheaper, sometimes free games available for their smartphones and tablets, analysts say.

PlayStation 4 games can be streamed to the PlayStation Vita, Sony’s portable game device, among other features.

“The architecture is like a PC in many ways, but supercharged to bring out its full potential as a gaming platform,” said Mark Cerny, Sony’s lead system architect.

James L. McQuivey, a Forrester analyst, said that for the PlayStation 4 to succeed, Sony needed to think beyond games. The console will have to provide other types of content and services, like video conferencing, third-party apps and a TV service to create a deeper, long-term relationship with the customer.

By comparison, Apple, the world’s leading consumer electronics maker, does not just sell hardware. It also has a universe of digital content including apps, music, movies and e-books to make people come back for more Apple gear every year. Apple generally takes an enviable 30 percent cut of all media it sells. Microsoft, Google and Amazon are making similar moves to create such a product array.

“Then and only then can Sony hope to learn enough about its users to overcome its own bias toward preferring to design products in response to engineering principles rather than customer needs,” Mr. McQuivey said.

This article has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article misstated the number of consecutive years in which Sony has lost money. It is three years, not four.

This article has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article misstated the name of a research company that follows the electronics industry. It is the NPD Group, not NDP Group.

Article source: http://www.nytimes.com/2013/02/21/technology/sony-unveils-playstation-4-aiming-for-return-to-glory.html?partner=rss&emc=rss

That was probably a common response to the news last week that the Justice Department had filed a civil suit against Standard Poor’s, one of the two big credit ratings agencies that were so central to the mortgage boom and bust. The department said that S. P. misled investors by presenting its ratings as the product of objective analyses when, the suit says, they were more about generating revenue to the firm. S. P. denied the allegations, saying it was prepared to go to trial.

Many people have been disappointed that S. P. and Moody’s Investors Service, the big and powerful companies that are supposed to assess the creditworthiness of bonds, have escaped culpability. Not only do these companies still hold sway in securities markets, they’ve also hung on to their lush profits from the glory days of mortgage origination. During 2005 and 2006, for example, Moody’s made $238 million by rating complex mortgage instruments. Investors who trusted those ratings lost billions.

Given that the financial crisis began unfolding more than five years ago, it is discouraging to see how entrenched the large and established ratings companies remain. Ratings are still used to determine bank capital requirements, and investors rely heavily on them.

Over the years, lawmakers have tried to open up the duopolistic world of ratings agencies to greater competition and, therefore, better performance. Legislation in 2006 encouraged the Securities and Exchange Commission to let new companies into the ratings club. The commission set up the Office of Credit Ratings to register new entrants and to monitor all participants’ activities. Today, 10 credit ratings agencies are recognized by the S.E.C.

But gaining regulatory approval to join the ratings arena is exceedingly burdensome. That, at least, has been the experience of RR Consulting, a firm with a stable of highly respected credit analysts and an enviable record of having predicted the mortgage mess in 2003.

RR has been trying to get recognition as a credit rating agency since 2011. Frustrated by what it perceives as roadblocks erected by the S.E.C., its executives are beginning to wonder if the commission really wants increased competition.

The firm was founded in 2000 by Ann Rutledge and Sylvain Raynes, experts in structured finance who previously worked at Moody’s. It is a small shop, with seven employees, but its clients include investors, small and medium-size banks, financial regulators and other institutions. RR’s specialty is risk measurement for all asset types.

RR’s approach differs from traditional ratings agencies because, in addition to being able to rate new issues, it analyzes risks in securities that are trading in the secondary, or resale, market, after they are issued. By contrast, S. P. and Moody’s became known for giving mortgage securities high ratings and downgrading them only when defaults were soaring.

“In the primary market, everyone prices a security around the credit rating,” Ms. Rutledge says. “In the secondary market, no one cares about the credit rating; what they want is valuation. We connect primary-market ratings with secondary-market valuations.”

THE RR distinction between a rating and a valuation, however, seems to pose a problem when it comes to getting S.E.C. approval as a ratings agency, Ms. Rutledge says.

By law, many requirements must be met before a firm can become a ratings agency. Chief among them is that the applicant must provide letters from 10 “qualified institutional buyers” that have used the company’s ratings over the previous three years.

RR has had difficulties with its letters. One was rejected because its writer identified the firm’s work as ratings or valuations, not simply as ratings, Ms. Rutledge says. Another letter failed to pass muster because it was from a German institution that characterized itself as the equivalent of a qualified institutional buyer. When a foreign institution could not get its letter notarized as required — notaries are not as common overseas — it was not good enough for the S.E.C.

And not all clients want to write such a letter for use by the S.E.C. Instead, some said they would discuss the company’s work by telephone. The S.E.C. rejected the idea.

“It’s extremely difficult for us to satisfy the ‘10 qualified institutional buyers’ requirement,” Ms. Rutledge says. “Proof that you’ve done business with them is not enough; it says you must have letters. And they have a suggested text for the letter. When we changed the text slightly they said it was not in conformity.”

Article source: http://www.nytimes.com/2013/02/10/business/credit-rating-club-is-tough-to-get-into.html?partner=rss&emc=rss

With PlayStation 4, Sony Aims for Return to Glory

Fair Game: Credit-Rating Club Is Tough to Get Into

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