Next Gen Pandemonium
Posted by jgaudiosi :: Industry Trends
It's the most wonderful time of the year for videogame fans. That is, for those who haven't been beaten up while waiting a week in line for PlayStation 3. Or for those who haven't been gouged for $2,400 and up PlayStation 3 bundles with Sony HDTVs at CompUSA. For the majority of gamers, the lucky ones will find a Wii, which will fly off store shelves thanks to its $250 price point and $200 million marketing campaign aimed at the mass market. When the dust settles by New Year's Day, Sony and Nintendo will end up the winners--but not for PS3 or Wii. It's PlayStation 2, which has a new limited edition silver edition, and Nintendo DS Lite, which has killer games like "New Super Mario Bros." Microsoft should benefit from the lack of Wiis and PS3s on store shelves, but Sony's PS2 has been outselling that console all year long, as has Nintendo DS.
It won't be until next Christmas, and likely the following year, when the real race heats up. Sony's in the game for the long haul, as Peter Dille, executive vice president of marketing at SCEA, told me that he believes that PS3 will have a 10-year life cycle, just as PS2 will. That means the PlayStation brand, which has more loyalists in the mass market than any other console maker, should end up back in front. The dark horse in this race is Nintendo. Wii really does have the potential to open up gaming to a whole new crowd of mainstream consumers.
Microsoft, which has a comfortable lead now, will likely rue the day they didn't drop the price of Xbox 360 earlier. There's a reason PS2 is outselling Xbox 360, and that's the price point. Those PS2 loyalists are likely going to wait for PS3 to drop in price, which will take a while to reach mass market. But they're willing to wait, and Sony is coming out with great new games for the PS2 like "God of War 2" in March and all of the major publishers will stick around to tap into those 35 million U.S. gamers and 100 million global PS2 gamers.
Xbox 360 is a great system, and with over 165 games, it certainly has the most diverse line-up of broad-ranging titles in the next gen category. "Gears of War" should help sell that console. It's the type of killer app that will reach across hardcore and casual gamers. I'm also a big fan of Xbox Live and Marketplace, especially when you factor in the downloadable movie rentals and TV show purchases that kick in November 22. The only negative is that beginning next year, Sony will offer these services for PS3. And PlayStation Network is going to be free to all consumers. Also, over the long haul, industry experts expect PS3 games to delve far beyond Xbox 360's potential, both because of the Blu-ray Disc format's larger 50 GB capacity and because of the Cell processor. So while Xbox 360 and PS3 titles look the same today, that's likely not going to be the case by next fall. With price drops, a built-in BR-D player and better games, Sony is certainly in a position to regain its first place spot.
I know everyone like to bash Sony. A lot was made of 200 PS2 and PS one games not working on PS3, but not one ever brought up the fact that Xbox 360 only plays 30 percent of Xbox games. About 260 Xbox games are backwards-compatible--that's it. Compare that to 200 of 15,000 PS one and PS2 games and there's really no story there.
No matter who wins this next round war, it's good for the industry. Nintendo's forging into new territories. And Sony and Microsoft are pushing the sales of HDTVs. It's the most wonderful time of the year.