Trading Places: A Curious Tale Of The Console Wars
First, a bit of history. In the beginning there was chaos. The arcades had beget household consoles, created to replicate the arcade experience in the living room. This was the era of the now-dead consoles, such as the fabled Atari. From this chaos emerged one of the three: Nintendo. As is often the case of consoles, the games are what define the failure or success of their hosts. And Nintendo made games that could not be replicated in the arcades, solidifying their place in the living room.
Their reign was long and (mostly) supreme. It wasn't until another of the three emerged that Nintendo faced the beginning of its trials. The Playstation. Nintendo's insistence on the lower capacity cartridge format to avoid the infamous "loading times" had angered several developers. But while theirs was the only kingdom, the developers had little choice. Sony provided new and fertile ground for voice acting, full motion video, and high-resolution graphics. And the tides began to shift.
And then there were three. Shortly after the launch of the Playstation2, Microsoft launched its Xbox. And with that came Xbox Live. While the Playstation2 became the victor of the console wars based on backwards compatibility for an extensive library of games and strong developer relationships, the Xbox stood its ground based on a strong networking system for online gameplay. And Nintendo? Well, it scraped by relying on its dominance within the hand-held market to survive.
And seemingly, the console wars were over. But since, they have now begun again. Almost two years ago, Microsoft released its Xbox360, getting a year's lead on its two competitors. And last year, there was the emergence of the PS3 and the "Wii."
What to make of these new champions? Nintendo's Wii is a wild card -- choosing a blue ocean strategy, it was successful in striking out from the graphics arms race and instead captured new audiences with innovations in game interaction. However, as is often the case with Nintendo, it stands to be its own worst enemy. Taking the risks of breaking new ground, it was launched with little developer support, and while its success has certainly grabbed developers' attention, it's still going to be a while until there are compelling games on the system. There is also the issue of porting successful gaming properties to a new and non-standardized control mechanism. The company might do well to consider reviving the adventure game, a genre that tended to do poorly on consoles because of the controller mechanics.
The big conflict is between the two that continued the arms race: the Xbox360 and the PS3. Sony had a character flaw that runs common in most classic tales: hubris. The common belief was that the PS2's massive success, with over 100 million units sold, would have clearly paved the way for its followup's console to dominate. The hype was enormous. But launching with too few units, at a much higher price point than either of the other consoles (Microsoft made a great play of dropping price near Sony's launch), a very creepy ad campaign, and delays in some of its better launch titles paved the way for an ugly launch. And that's exactly what it was. In many cases, the people standing in line were just planning on buying a system to resell it at an inflated price on eBay. But the joke was on them. The hype machine we now know of as the Wii dominated the market. People looking to actually play games for the holidays bought an Xbox360 or Wii.
Which brings us to the Xbox360, which is heading into its golden age. A patch for the Xbox enabled 1080p support, putting it on similar graphical ground as the PS3. Sony's failure lost it almost all the exclusive titles it held, as developers shifted to cross-platform development for both the PS3 and Xbox360. And the Xbox360 has a great lineup of exclusive content leading up to Christmas. "BioShock," "Blue Dragon," "Eternal Sonata," "Halo 3," "Mass Effect," and the first two sets of downloadable content for GTA IV. That's a heavy lineup. The two JRPGs may even get the company more market share in Japan, where it has historically, well, sucked.
And yet, the tides still shift, as they tend to do. Sony is doing some brilliant stuff with Home and some of the possibilities for user-generated gaming like "Little Big Planet." Also, the DVD 4.7 GB bottleneck is going to be a big problem for the Xbox360 compared to the 25 GB Blue-ray disks. Sure, the Xbox360 Elite has a HD DVD player built into it, but that hardware is not uniform and launching a game requiring a $180 peripheral doesn't look to be particularly good business.
My prediction: Nintendo screws up third-party development and networked play as it has done on the DS, and remains a novelty console. Someone at Sony finally wakes up/gets promoted and drops the price on the system below the $400 mark -- and that, coupled with Home pushes enough sales, regains some "system sellers" as exclusives, especially touting its high capacity disks. This will happen within a year. Microsoft continues to gain significant market share in the next year, and launches the Xbox version 3 in about two years with a high capacity drive, cutting into the growth of the PS3 as the Xbox360 reaches its limits regarding technology.