A Misguided E3

By today, many sources have already commented on E3's lost edge. What used to be the Mecca of game conferences was a disappointment, with many publishers pulling from the ESA and with it, its participation with the event -- but most of all, there were underwhelming announcements from the big consoles. However, I think those announcements reveal a great deal about the larger strategies of Nintendo, Sony, and Microsoft, and are instructive examples of how even the industry leaders are navigating blindly in dangerous waters.

First we have Nintendo, the sudden golden child of the consoles. Many were expecting an announcement of a "core" game for the Wii, for the many dedicated gamers that picked up the system at launch, who haven't had anything of substance besides "Metroid" and "Super Mario Sunshine."

Surprise! Nintendo realized its inner self, and recognized that the Wii is a money-generating machine -- but only as long as it avoids competing with the Xbox 360 for the core gamer. More so, the company recognized that for casual gamers, it can have limited third-party support and still be high in demand, as the casual group has a lower attach rate for the console, but is deeply satisfied with a few titles offering fun, light fare gameplay.

This is anything but what was the case with the Gamecube. The announcement of the gyroscope add-on to be packaged with "Wii Sports 2" was Ninetendo's best announcement. The device is going to sell like hot cakes, especially as it's packaged with the sequel to the most popular title for the console. What surprised me was the bone tossed to core gamers with the announcement of a "Grand Theft Auto" game for the Nintendo DS, as it seems that in Nintendo's mind, its portable device is the one with a larger core demographic - something that would go against larger industry trends, but perhaps show that it's a brave new world.

Sony's conference was just sad. The company really has some great products in the oven -- but it just seem to be forgetting to turn up the heat. The fact that Sony said it expects success to come a year or two down the road makes me cringe. Its best bet relies on system exclusives that take full advantage of Blu-Ray storage capacity (which prevents a port to the Xbox 360), and pushing its concept of massive social gaming (such as the announced Massive Multiplayer Action game, or the LittleBigPlanet release). I'm not sure company principals realize this.

Finally, Sony's video download service is too little, too late, and too pricey. The only way purchase of content through the device is worth it is if Home allows limited streaming to "visitors." But without that functionality, there's no reason to pay six dollars for an HD rental, when I can just have Netflix ship me the Blu-Ray disc as part of my monthly subscription.

The saddest part of the entire conference was when Sony put emphasis on the PS2, as it was a full indication that its only real profit seems to be from an eight-year-old system. Sony needs to find itself and define a larger strategy. I think social gaming is its best possible niche, but the company needs to release some simple titles that leverage that in the next six months to a year. Even if they are just Portal length -- Sony needs to sell systems to get and keep third party exclusives, and to do that, it needs "system sellers."

Microsoft had the best announcements, but is perhaps the most misguided. The company clearly feels it's won over the core gamer, and is now focused on expanding territory. It has really hurt Sony with exclusive DLC deals for cross-platform games, and its announcement of supporting the upcoming Final Fantasy was a real bee in Sony's bonnet. So now Microsoft looks to the Wii, and clearly wants to attract casual gamers.

What company strategists fail to realize, though, is that the biggest gap between a casual gamer and a game on its system is not the complexity of gameplay, but the controller with which to play it. Core gamers can play a game with the controller acting much as an extension of themselves - but many started on systems that only had a D-pad and two or four buttons. For newcomers, a controller with two thumbsticks, a D-pad, two triggers, two shoulder buttons, and seven other buttons is a bit daunting. The popular casual games on the Wii mostly just rely on natural movements. "Guitar Hero," a game that's crossed into attracting casual gamers, focuses on a dedicated peripheral. The Xbox Live Arcade "casual games" rely on the daunting controller - this is the hurdle Microsoft needs to overcome, or its foray into the casual space is largely going to be for naught.

It is also attempting to focus on redefining the Xbox as a stand alone media center, as one glance at the dashboard redesign shows. The Netflix announcement was great and will be a great success, but I think that as long as its content purchases rely on Microsoft points, audience growth will be limited. Content purchase will be intuitive for existing system enthusiasts, but I doubt that a non-gamer is going to look at the Xbox 360 as a direct download solution until content purchase is a one-step action, a la iTunes and the iTV system.

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