• by Thom Forbes  @tforbes, February 21, 2013

Sony revealed a lot about the state of the videogame industry yesterday without actually showing its forthcoming PlayStation 4, which it seems to expect to be ready for this holiday season at a price as yet undisclosed. 

“The consumer is changing us,” Andrew House, president and group CEO of Sony Computer Entertainment, said at the “unveiling” last night. "The living room is no longer the center of the PlayStation ecosystem; the gamer is," Ian Sheer reports in the Wall Street Journal.

And the gamer has been buyer fewer and fewer old school consoles since 2008, a trend that analysts partially blame on the economy but more convincingly on the emergence of free or cheap games on other platforms.

“Tablets and smartphones built by rivals such as Apple and Samsung already account for around 10% of the $80 billion gaming market,” Reuters’ Liana B. Baker and Malathi Nayak report. “Those mobile devices, analysts predict, will within a few years be as powerful as the current slew of game-only consoles.”

House was speaking to 1,200 people gathered at a media event at the Hammerstein at Manhattan Center last night that was also streamed and live-blogged everywhere from The Verge to the Dallas Morning News. “Videogame Industry’s Brightest Minds Convene in New York …,” reads the hed on a press release for the event that carries descriptions of some new games as well as optimistic quotes from the people developing them.

The PS4 “will let developers like ours deliver games that surpass anything previously possible on a home console,” Ubisoft Entertainment (Assassin’s Creed III and the forthcoming Watch_Dogs) co-founder and CEO Yves Guillemot said. “PS4 will also help us deliver on what we believe to be the future of gaming."

The PlayStation 3 was announced with similar fanfare in May 2006 and rolled out across the globe later that year. 

“The first new PlayStation in seven years was promoted by Sony as being like a “supercharged PC,” write Brian X. Chen and David Streitfeld in the New York Times. 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.”

Some reviewers, such as Gizmodo’s Sam Biddle, were  exasperated by the lack of concreteness in yesterday’s event. “Of course, no word on how much this thing will cost, and to our disappointment and exasperation, we have no idea what the console will look like. Maybe it's a pyramid. Bloody hell, Sony,” he concluded in all caps, which we’ll spare you. 

Forrester analyst James L. McQuivey tells Chen and Streitfeld that the PlayStation 4 “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” if it is to succeed.

“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,” McQuivey says.

The PS4 will run on chips from Advanced Micro Devices, replacing more costly, custom chips it developed with IBM and Toshiba, which will make it easier for game developers to program, Sheer writes. 

Duncan Mavin, writing for the WSJ’s “Heard on the Street” sees promise in what Sony says the new device will be capable of doing technically, but also points to the real value of the cheaper new chips. “Pricing will be crucial,” he points out. “The high retail tag of PlayStation 3 of up to $600 put off some consumers, allowing cheaper rival consoles from Nintendo and Microsoft to steal market share.” 

Sony did display a new controller -– the DualShock 4 –- at the event. IGN’s Scott Lowe says “it's a vastly more refined variation of the prototype version that leaked online earlier this month”and heralds its new social features among other improvements.

Meanwhile, the “free-to-play business model (aka freemium), where consumers download and play the ‘core loop’ of a game for free but then pay for virtual goods and currency through microtransactions, is the the best business model in the era of digital distribution,” Venture Beat’s Dean Takahashi reported in a story last week about the “staggering” statistics about the “sweeping shift” in the industry as he covered GamesBeat 2013 in Hamburg, Germany.

“The arrival of PS4 is a critical initiative that presents an enormous opportunity to dramatically evolve the game play experience into something far grander than ever imagined,” House said at the conclusion of the event. Critical is the operative word for Sony.