Samsung is really making some noise. Putting aside the ongoing dispute between Samsung and Apple over patents (hey, everyone’s looking at their patent portfolio in these hotly-contested times), Samsung is showing a new level of GO BIG OR GO HOME that we haven’t seen from anyone else besides Apple.
We’re not talking apples and oranges anymore. Samsung, a supplier to Apple, is now a strong challenger and formidable threat to Apple. To the hardworking Samsung employees worldwide, this may have always been true. Apple, under Tim Cook, more noticeably looks at Samsung as a threat, foe, and supplying partner. Under Jobs, Apple was ‘thermonuclear’ on Android.
Today’s announcement by VentureBeat about Samsung’s foray into the gaming sector is big news. This isn’t tired old-school stuff of physical consoles and game delivery (DVDs, cartridges) like Microsoft Xbox, Sony Playstation and PSP (Playstation Portable), Nintendo Wii or DS. That’s old school. Apple started to ‘kill’ the physical media delivery model with the introduction of the Macbook Air in 2008. Four years later, technology platforms on the ‘leading edge’ are still using distribution mechanisms that simply no longer make sense. Why is that? Apple’s iTunes and Netflix’s streaming subscription service have both proved digital delivery works. Blockbuster ignored this. It also appears that Microsoft, Sony and Nintendo have also ignored this.
Apple took the next bold step by eliminating OSX physical media sales with the introduction of Mac OSX Lion in July 2011 which could only be delivered digitally. Anyone that tried to get a ‘physical box’ at an Apple Store was politely told to buy Lion through Mac App Store which was released on January 6th, 2011. iCloud, announced by Steve Jobs in his last official appeared in June 2011, would hit the market in October 2011 to help bolster Apple sync service features and digital content delivery for iOS devices and MacOSX laptops and desktops.
There’s simply no excuse here for laggard response by other key players in re-architecting their business for digital distribution. Apple proved consumer acceptance for digital music with record purchases and downloads after iTunes was launched on January 9, 2001 — eleven years ago!
Samsung now aims to leverage the key ingredients of success to build their ecosystem of content and services to drive consumer electronic sales - whether it’s a large flat screen television or a powerful new, sexy Samsung series phone. Samsung is competing like never before and they’re rate of execution is set on “throttle up.”
As mentioned earlier, VentureBeat reports that Samsung will enter the gaming sector using elements of Gaikai’s cloud gaming architecture. Samsung’s target: Microsoft, Nintendo and Sony.
It appears Microsoft, Nintendo and Sony didn’t notice what Apple’s iOS platform strategy did. It essentially decimated handheld console gaming as we know it for several reasons: costly distribution, packaging, game licensing, and handheld consoles! Virtually overnight, Apple’s iOS platform catapulted to top-slot for portable gaming allowing developers to deliver games quickly, cheaply and easily to a large ecosystem of consumers using the iPad, iPod Touch, to iPhone series. Don’t believe me? Look at this staggering chart highlighting iPhone sales vs. Nintendo handhelds. ’Nuff said. Even worse for the handheld console guys, Apple and Android combined now own 88% of the total platform market, according to this May 2012 BusinessInsider report. Where do you think game developers will go when they think about “mobile or portable” gaming?
“It’s game over man!” for Nintendo, Microsoft and Sony
Is it any surprise then that Nintendo indirectly claims the iPhone killed the handheld game console market? It’s March 2012 numbers paint the picture — first-ever annual loss of a half-billion dollars. Ouch. The writing was on the wall a long time ago. Sadly, no one paid attention. A little more attention to Tim Cook, operations, supply chain and costs could have easily exposed the secrets to Apple’s eventual success.
Samsung is in a perfect position to destroy the living room game console market with this disruptive move into the market. In all, the content will drive hardware sales - both in smartphones or Samsung TVs — but also allow Samsung to capture a piece of that prized living room that no one, not even Apple, has been able to capitalize on. Content, easily accessible in the living room and other rooms, has been a concept for the product roadmap plans of many companies — from Microsoft to Intel, to Bell, and many other telecom and cable companies. Microsoft even promoted the 10” living room concept early on, followed by a joint-initiative with Intel Viiv, to promote that family home entertainment experience. Nothing hit critical mass.
In my Bell days in the mid-2000s, we saw the future and it was digital distribution. iTunes was successful. Our own VAS entertainment portfolio was powered by streaming technologies to deliver content to PCs and desktop systems by leveraging Bell-architected delivery frameworks in concert with key vendor technologies. Mobile devices (smartphones and handsets) existed in our product roadmaps, and we knew the day would come — this was a year before Apple introduced the revolutionary iPhone and well before Netflix was household name in the United States (let alone Canada!). At the time, the only game in town was TiVo. Flash forward.
Samsung has a real disruptive chance to capture a huge chunk of the gaming market with this new gaming service. There won’t be a console since new TV models will be able to support the cloud-gaming framework to serve up games. Mind you, OnLive and Valve have been in this game for a while but it’s never hit ‘mainstream’ when it comes to mass consumer traction. I am talking about ALL gamers - not just the hardcore, specialized type of gamer (which generally falls into the male tween/teen camp) in search of massive online experiences or multi-player or co-operative wargaming environments. We’re talking mass consumer here. Women, Men, Adults, casual, family etc etc.
In this new disruptive Samsung framework, games won’t be served:
- physical media OR
- game hardware consoles
ALL game processing will be handled in a cloud data centre connected to the web. Game logic, graphics and other processing will occur on back-end, high-powered server infrastructure to ‘stream’ a visually-engaged game experience (display it) to a consumer’s PC or television. Perhaps at 720p at first followed by 1080p later. This is a paradigm shift. This will naturally evolve to mobile smartphones and tablets.
With 37 game publishers on board, Samsung is clearly working overtime to get the content ready for the launch. Even though OnLive has been in this arena since 2010, I do think a “Samsung Gaming Service” is going to take this one out of the park.
Disruptive. Macro-focus execution.And the Right Stuff.
It seems Samsng is making a very good name for itself. Watch out Apple.