• BBC News, Friday, October 20, 2006 12 PM

Sony's next-generation console, the PlayStation 3, launches in about a month--and this time around, the electronics giant is banking on its Web strategy as a crucial revenue driver, since manufacturing the console has proven to be more costly than the company planned.

Unlike Microsoft's Xbox 360, which offers a limited online offering for free, The PlayStation Network lets PS3 owners play other gamers and chat for free. Downloadable games and other extras will also be sold over the network.

Most analysts believe the new set of Web-enabled consoles will encourage advertisers to spend more money on video games. By the beginning of '07, Microsoft says that just 6 million Xbox owners will be using its service, but many of those games (i.e., role-playing games) won't accept advertising, which means per game audiences will likely be small--hardly the kind of numbers that national advertisers want to pay a premium to reach.

Sony's move to open up its online service is much smarter. It will encourage nearly all of its users to play via the Web, which could help it to attract more ad dollars. If the PS3 even comes close to approaching the PS2's 105 million global user base, that would one day translate into big ad revenue. Another smart move by Sony is to give third-party publishers the autonomy they crave by letting them use their own online networks for their games. That will keep Sony's network from clogging, encourage good publisher relations, and will ultimately give advertisers more options.

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