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As the world awaits the announcement of the PlayStation 4, CVG is running a special three-part article that looks through the defining moments of in PlayStation history.

• Monday - The PlayStation One Revolution
• Tuesday - The Towering Triumph of PlayStation 2
• Wednesday - PlayStation 3 versus the world

Then, today at 6pm Eastern Time (11pm UK) we will stream live video of the PlayStation Meeting right here.

March 2001: The Hard Cell

It was like an opening act to a science fiction film. Sony, after vaulting through technological generations with its PS1 and PS2 systems, Sony set its aim for PS3 far further than others could feasibly envision. It was a near-improbable ambition - a final frontier in microprocessor engineering.

On March 13 2001, Sony entered into a landmark partnership with IBM and Toshiba to co-create a revolutionary processor, codenamed 'Cell'. The idea was that this inestimably complex nine-core chip (which contained an astounding 234 million transistors) would power all future technologies, from wrist-watches to microwaves to TVs and their remotes.

The immensely expensive chip design project concluded in 2005. At the time, the widely respected IBM luminary Jim Kahle said designing Cell was "the most important project of my career".

It was reported at the time that Sony had invested at least $400 million in the processor, and the corporation was proud to state that the very first home device to have Cell at its heart would be PlayStation 3.

It was a profound moment in the era of the microprocessor. Everything seemed so triumphant that no one considered, or even dared to suggest, one vital caveat: the Cell processor was a terrible choice for a games console.

May 2005: The Lost Numbers

When Ken Kutaragi stood on stage at E3 2005 he ushered in a new era, but not the kind he had in mind.

His dream was to engineer the next age of microprocessors where Cell was a ubiquitous, heavenly breakthrough. But this was not to be. The real revolution was that the console numbers and specs Kutaragi had paraded on stage were no longer relevant or valuable, regardless of how enormous they had become.

From the 8-Bit era to the age of N64s and onwards, numbers were attached to consoles to provide a kind of short-hand explanation of their capabilities. The PlayStation 3's figures, however, were at odds with what was being produced by the machine and what developers were saying.

The PS3 was capable of 100 billion shader operations per second and was able to display 1080p resolution with 128-bit pixel precision. But such stats were meaningless if programmers couldn't get their heads around a new multi-thread language required to make the most of such features. And the truth: Not many programmers could or had the time to.

PlayStation 3 was far more sophisticated than any other console in the world, but its games often looked worse than those developed for the Xbox 360; an older system made from more modest parts. And in an age where multiplatform releases became a commercial necessity, it became self-evident that system power was only one part of a more complex equation. Numbers had lost their meaning.

Even in 2013, developers are still discussing the problems with developing for PS3. Two weeks before the reveal of the PlayStation 4, Insomniac boss Ted Price said the Resistance project was "brutally difficult to work on at times" - a memory still fresh in his mind some eight years later. It's hard to imagine how he felt back then.

May 2006: Not Enough WTFs in the World

Maybe Chris Deering's departure from PlayStation, five months prior to E3 2006, should have been a warning sign. Certainly, in the months leading up to the event there had been some signs - a peculiar claim here, a spot of bravado there. But it was only on that day, in May 2006, that the world was given a full picture of how far the PlayStation business had fallen into disarray.

That infamous Sony E3 press conference was, in a sense, a sort of bizarre anti-sales pitch, perhaps destined to be studied by business and PR students. It was as if, after eleven straight years of unimaginable success, a culture of complacency had spread all the way up Sony Computer Entertainment.

All the most vital decisions regarding PS3 were handled poorly, not least that flabbergasting RRP of "five hundred and ninety nine US dollars" - a phrase repeated in gamer circles to this day as though it was a punch line.

Pitching a console for $600 wouldn't have worked even if Sony performed that E3 conference flawlessly, but of course the company didn't come close. It took two decades for Sony to reach such a dominant position in the business, and just two bleak hours of televised madness for it to lose its grip.
One journalist who attended E3 said the look on Phil Harrison's face, as he marched out the venue afterwards, said everything about the success he had fostered at Sony and the storm he was about to face. Another Mr Harrison, however, was living what he regards as one of his best days ever at Nintendo.

George Harrison and his team at Nintendo of America had sparked a craze that the games community had not experienced since the launch of the PS2. The Wii promised a completely unique way to play games and, with impeccably lucky timing as if it was all part of a wider narrative, the revolution at Nintendo coincided with the collapse of the PlayStation empire.

It was as if power was changing hands, and it could be seen almost literally, as Nintendo's Harrison explained in a recent interview with CVG.

"I'll never forget the first day on the show floor at E3. People lined up and as soon as the doors opened, you could see people literally running past the PlayStation 3 stand to get to the Wii stand. I think we caught Sony by surprise, and they felt they needed to act fast so they created the Sixaxis controller."

"People were lining up by the hundreds to get their hands on the Wii, and that's when we knew we were onto something. It was also a time of social media too, with things like homemade YouTube videos promoting the Wii - the whole thing took on a life of its own and you really cannot manufacture that through advertising."

One YouTube video stands out among the rest. It was a rushed five minute cut of the E3 conference that encapsulated everything about Sony's performance. With more than 1.7 million views, it could very well be the most watched anti-PR video ever. You've no doubt already seen it several times, but like iconic moments in film, there is something about it never ceases to amaze:

November 2006: The Stuttering Start

It had the hallmarks of a console launch but not quite that of a PlayStation launch. Many hundreds had waited outside stores across Tokyo and Japan, but not thousands. It's hard to imagine a games console replicating the sheer hysteria of the PS2's One Million Weekend at the Akihabara in March 2000, but PlayStation 3 was the heir to that system and, from launch day onwards, lived in its shadow.

The system sold out on its opening weekend with 88,000 units shifted. Five months prior, Kutaragi had to relax investor tensions by promising that Sony would be ready to produce a million consoles a month by November, and it would have shifted six million machines by March 2007.

But by the time that deadline passed, only 3.5 million systems had sold. One PlayStation executive, speaking to CVG, said that of all the challenges PlayStation had gone through over the past seven years, that super-high price point hurt the business the most. Between March and June 2007, Sony sold just 700,000 PS3 units worldwide. It marked the lowest period of business at PlayStation since 1995.

A strong launch across the US in September 2006 (with 400,000 units on the opening weekend) was more encouraging, but that month the company revealed a far bigger setback. Due to apparent diode inventory problems, the PS3 launch across Europe was delayed until March 2007 across Europe.

"This seems to be the continuation of a series of bad news," said analyst James Hong at the time.

"People were prepared to wait for the PS3, but delaying its European launch so they miss the Christmas season is just so not good."
Between its debut in Japan in November 2006 and January 2007, Sony's sold just 534,336 PS3 units, falling far short of its goal of one million sales. By contrast, sales of Nintendo's Wii - which went on sale three weeks after the PS3 - reached 1.14 million in the same period.

April 2007: Long Live the King

First there was the internal rumour that Kutaragi, during his brief spell as head of the entire consumer electronics group, had secretly used money from other divisions to help pay for the development of PlayStation 3 - effectively hiding the true cost of PS3 development for a number of years.

By that point, Kutaragi no longer followed company lines. Perhaps feeling stranded after months of in-fighting at Sony, Kutaragi was no longer putting the business' interests first when speaking publicly. He triggered outrage and far-reaching accusations of hubris when describing its closest competitor, the Xbox 360, as the "Xbox 1.5".

Later, came the comments from Sony executives. One of its most senior directors, speaking off the record, commented that Kutaragi "only opens his mouth to change feet".

In March 2007, Kutaragi stunned the Sony board of executives with news that the games division was about to lose $2 billion for the fiscal year (each PS3 cost about $700 to develop, meaning that Sony was selling it at a loss even with its remarkably high RRP).

Then came the unthinkable - an extraordinary measure from a company so embedded in Japanese traditions. Sony Computer Entertainment effectively dismissed Kutaragi on April 26, 2007. The father of PlayStation, after twenty years of driving the business, was seen to be taking it backwards.

By that stage, Sony had invested an estimated $3 billion in the PlayStation 3 project. There are honoured traditions in Japan about companies holding onto their senior executives until the very end, but there was a line.

[Further reading: Farewell, Father - GamesIndustry.biz]

May 2006 onwards: The PR Disasterclass

It only made sense when you took a step back and looked at the bigger picture: PlayStation was a non-stop commercial success for eleven successive years and its executive circle hadn't faced public criticisms before.

These people may have been masters at success, but were amateurs at managing failure. For two years following E3 2006, PlayStation bosses would respond to common complaints with perplexing and berserk statements.

They were all at it. While Kutaragi was insisting to one newspaper that people would work the extra hours to afford a PS3, Kaz Hirai boldly pronounced to another that "the next generation doesn't start until we say it does". Even Phil Harrison, a games executive with a tremendous PR acumen, made some noisy clangers; like the time he was asked why PS3 pads didn't feature rumble control and suggested that force feedback was a "last generation technology".

PlayStation 3's poor early sales were not taken as a warning either, with Hirai setting the agenda in early 2007: "This is not meant in terms of numbers, or who's got the biggest install base, or who's selling most in any particular week or month, but I'd like to think that we continue official leadership in this industry".

There was then a moment, several months later, when Sony could no longer ignore the growing body of complaints from developers regarding the problems and complexities of developing for PS3.

Hirai's retort: "We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

It really had become a buyer's market for soundbite-seeking journalists for two years following the E3 2006 press conference. PlayStation created this bizarre cacophony of troll-quotes from its most notable executives - people too senior to be given a dressing-down internally.

April 2011: Hacked and Humbled

Kutaragi's shock resignation left Hirai with a duty to become PlayStation's second ever Group CEO, giving him immediate authority to change the direction of the business. But reinventing a company that was losing billions of dollars was no straightforward task. Hirai said years later: "I thought turning around the PlayStation business was going to be the toughest challenge of my career".

And he was going to have to do it without the help of one of his most talented executives. In February 2008, Phil Harrison resigned from Sony. Harrison still, to this day, has not spoken publicly about his resignation.

Hirai needed to push onwards. The key plan was to build a PS3 system that was profit-positive; a console with a redesigned interior, fewer parts overall, a cheaper Cell chip and lighter, inexpensive plastics. By the time it was released in September 2009, there was little suggestion that the PS3 could outsell all.

Then, in April 2011 - and by the time Sony had finally steered PlayStation 3 in the right direction, a group of hackers infiltrated the PlayStation Network and illicitly obtained sensitive information about 77 million customers.

It was said to be the biggest online hack in modern history; a career-defining security and PR catastrophe that made the front pages around the world. The consensus was that Sony's standing among the public would never reach the same position again.

The PlayStation Network was down for sixteen weeks, yet in some ways it had helped the business. At a press conference in Japan, Hirai offered a profound apology and lengthy bow - a symbol of deep regret and humility. It was a foretoken to a new approach for PlayStation; After five years of deeply harmful arrogance, Sony had finally - and in front of the world - admitted its shortcomings.

Feb 2013: Too big to fail

Two years since that transformative hack on its network, Sony has finally deflated its head - it is a combative company again; wary of mistakes, ready to fight for every inch, constantly thinking about acquiring customers. Its PlayStation Plus service in particular has been unanimously praised as a significantly more reasonable alternative to Xbox Live Gold.

PS3 has reached 70 million sales worldwide and this is, considering its track record, a failure. The company has fallen from clear market leader to a fighter for third place. This was not the future Ken Kutaragi envisioned when, ten years ago, he daydreamed about Cell technology blanketing the earth.

After two extraordinarily successful console cycles, Kutaragi's ambition had become too vast to manage. Now the heads of PlayStation have a completely new task at hand: PlayStation 4 will be announced in a matter of hours from the publication of this article.

The story of PlayStation's fall is over. Whether it has learnt enough hard lessons - after years of gloom and disorder - will determine whether the firm's next chapter is one of redemption.