Sony's Radical New Technology Could Bury Microsoft and Nintendo for Good

Sony's Project Morpheus could elevate its video game console over competitors from Microsoft and Nintendo.

Mar 22, 2014 at 12:00PM

It's still early, but there's no doubt that Sony (NYSE:SNE) is (at least for the time being) winning the current console war. Sony's PlayStation 4 is in such great demand that the company is having a difficult time keeping it in stock -- its competitors haven't been as lucky. Retailers have had to offer aggressive discounts to move Microsoft's (NASDAQ:MSFT) Xbox One, while Nintendo's (NASDAQOTH:NTDOY) Wii U has fallen far short of its sales projections.

Could the PlayStation 4's lead widen ever further? Earlier this week, Sony unveiled a radical add-on for its latest console, one that could put Sony even further ahead of its rivals.

Sony unveils Project Morpheus
Sony's new technology, Project Morpheus, proposes to offer a level of immersion never before seen in gaming. By strapping on a headset, owners of the PlayStation 4 would have images projected directly in front of their eyes. Paired with the motion-tracking abilities of the PlayStation 4's camera, Sony's Project Morpheus could offer gamers something approaching true virtual reality.

Science fiction writers have been dreaming about virtual reality for years; assuming it's executed correctly, the appeal of Sony's new technology seems self-evident. Nintendo's previous console, the Wii, was able to outsell its rivals largely because of its unique, motion-tracking controller -- Project Morpheus could make Wii bowling look like a joke.

Microsoft could have its own VR headset in the works
But Sony may not be alone -- according to The Wall Street Journal, Microsoft has similar VR ambitions, and is said to have a headset of its own in the works. Microsoft's solution could actually prove to be far superior, given the impressive tracking abilities of the Xbox One's bundled Kinect.

But unlike Sony, Microsoft hasn't debuted its VR solution publicly, leaving it in the realm of pure rumor and speculation. It's also possible that Microsoft's headset could go further than gaming -- last year, The Wall Street Journal reported that Microsoft was working on an augmented reality headset that would theoretically compete with Google Glass.

Nintendo is getting left behind
While Nintendo's Wiimote arguably kicked off the virtual reality trend, the Japanese gaming giant hasn't been able to expand on the technology, and so far hasn't been linked to any forthcoming headset. That isn't to say that Nintendo couldn't have its own solution in the works, but, given its ongoing struggles in the living room space and the relative weakness of its current console, it seems unlikely, at least as an add-on for the Wii U.

After a strong debut sales of the Wii U have slowed to a crawl, and third-party developers have largely abandoned the console. Last month, according to NPD (via VentureBeat), Nintendo sold only 100,000 Wii Us in the U.S. -- less than half the sales of Sony and Microsoft's latest consoles. Its competitors' virtual reality headsets could only put Nintendo further behind.

History hasn't been kind to add-ons
That said, history isn't on Sony's side. Over the years, console makers have released a variety of hardware extensions, and nearly all of them have failed.

In the late 90s, Nintendo launched the 64DD for its N64 console. Intended to boost the N64's performance, it was a commercial failure, and never made it outside of Japan. Sony's "PlayStation Move" camera, released for its PlayStation 3, was a bit more successful, but went largely unsupported by game creators, and Sony's management admitted that it could've done a better job. The most successful add-on has been Microsoft's first-generation Kinect motion-tracking camera, but even that was only utilized by a fraction of the Xbox 360's games.

Console add-ons face the classic chicken or the egg problem -- game creators are reluctant to support them, as not all console owners have them; console owners, in turn, are less likely to buy them, as few games are made with them in mind. Project Morpheus, or any other VR add-on, could run into similar issues.

Of course, nothing as immersive as Project Morpheus has ever been released, making prior comparisons difficult, if not entirely meaningless. Ultimately, it remains to be seen if the add-on will be successful, but its potential is a positive sign for Sony's already dominant console.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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