"Gaming\'s next level
Sep 15th 2005
From The Economist print edition
Consumer electronics: How will the next-generation games consoles differ, and how can they attract new gamers?
ARE you a PlayStation person, an Xbox aficionado or a Nintendo nut? You may not play video games at all, of course. But if you do, you will be aware that each of the three main games consoles has strengths and weaknesses that make it appeal to a particular audience.
Of the current console line-up, Sony\'s PlayStation 2 is the most popular machine, with the broadest choice of games. Its success is the result of several factors, including Sony\'s decision to launch the PlayStation 2 earlier than its two rivals, which gave it an insurmountable head start; its support for older games written for the original PlayStation console; its ability to function as a DVD player; and Sony\'s close partnerships with games publishers, which ensured a stream of popular titles. All of this enabled Sony to garner a 70% global market share.
But the two other current consoles have devoted fans as well. Nintendo\'s GameCube has a far narrower range of games than Sony\'s console, but what it lacks in quantity it makes up for in quality, at least for the family-oriented audience that Nintendo targets. Most of the best GameCube games, such as the Mario and Zelda franchises, are published by Nintendo itself, since third-party publishers have not really embraced the GameCube. But because Nintendo has very high production standards, the games that are available are impressive. And because most of the money in the games industry is made from software, not hardware, Nintendo makes the most profit among gaming firms, even though it has only a 15% market share, notes Paul Jackson of Forrester, a consultancy.
Microsoft, in contrast, has yet to turn a profit from its expensive foray into gaming. As the last of the three consoles to reach the market, the Xbox is easily the most powerful, so it appeals to hard-core gamers. After a slow start it now has an impressive line-up of games, including the “Halo” series of sci-fi shoot-\'em-ups, which are not available on any other console. The Xbox also has by far the best online-gaming service, Xbox Live, which is run by Microsoft itself. All of this has helped the Xbox to do well in America, though it is still far behind the PlayStation 2, and its sales in Japan were dismal.
In short, then, the PlayStation 2 has the broadest appeal; the GameCube is aimed at younger gamers and families; and the powerful Xbox has been embraced by hard-core gamers. (Things are not quite this simple, of course, since many popular games are available on two or three of the consoles, and many dedicated gamers own more than one console.) The big question now, as the three firms prepare to launch their next-generation consoles, is how they will position them to maximise their appeal.
Changing the game
This time Microsoft is going first, with a November launch for its new console, the Xbox 360. Its aim is to establish an early lead, just as Sony did with the PlayStation 2 last time around. Microsoft has also made an enormous effort to bring Japanese games-publishers on board, to counter the home-field advantage enjoyed by its two Japanese rivals; the Xbox 360 will have 45 Japanese titles by the end of the year. Microsoft has also made some innovative marketing moves. It unveiled the console on MTV, rather than at a big industry trade show, in an attempt to reach out to consumers directly and steal “mindshare” from its rivals.
In addition, Microsoft has used a trendy technique called “alternate reality gaming” to leak details of its new machine and create buzz on gaming websites. And it has struck a deal with Samsung, so that the consoles will be placed next to high-definition televisions in big stores, where they will be seen by non-gamers. (The next-generation consoles are expected to prompt a flurry of interest in high-definition televisions, for which other content is currently lacking.) Overall, so radical is Microsoft\'s change of positioning compared with the original Xbox, which was aimed at hard-core gamers, that the new machine really ought to be called the Xbox 180, jokes Ross Rubin of NPD Group, a market-research firm.
For its part, Sony is emphasising the raw power of its new console, the PlayStation 3, which is based around a new chip, called Cell, and a high-capacity Blu-ray optical drive. This will give it substantially greater processing power and storage capacity than the Xbox 360, but both technologies are new and unproven, and it is not clear that consumers other than hard-core gamers really care about such things. And if technological teething problems delay the PlayStation 3 beyond its planned introduction next spring, Sony could lose a lot of ground to Microsoft.
Nintendo has not been so forthcoming about its new console, the Revolution, which is also due next year, except to say that it will have an unusual new kind of controller and—in addition to new titles—will be able to play Nintendo\'s entire back-catalogue of games, accessible via the internet. The idea is that these older games will draw in casual gamers who are put off by the complexity of modern titles, says Mr Rubin, though using today\'s powerful consoles to play classic games “doesn\'t seem to be an efficient use of resources”. Even so, the success of Nintendo\'s touch-screen handheld console, the DS, suggests that innovative technology plus relatively simple games is indeed a winning formula.
The next round, then, will pit Microsoft\'s marketing might against Sony\'s technological prowess and Nintendo\'s quirkiness and innovation. What will ultimately determine the outcome, however, is the games. “It comes down to the software titles,” says Mr Rubin. People buy consoles to play particular titles, not because they are impressed by their technical specifications. Most observers expect Microsoft to reduce but not eliminate Sony\'s lead, so that Sony captures 45% of the market next time around, with Microsoft on 40% and Nintendo on 15%. “It\'s really Sony\'s game to lose,” says Mr Jackson. But whatever happens, at least gamers should have fun."
Hmm... I didn\'t know MS was courting Samsung. They\'re pulling on my patriotic fervor here... may damn well have to get a 360.
Topic: Nothing new, but a sensible prediction of the gaming industry nonetheless. (Read 1118 times)