Microsoft & Conclusion

Microsoft is in position to hurt Sony. The PS3 launch title line-up isn’t stellar, with little in the way of exclusives or even PS3 lead titles (ie, games that will appear on other consoles after some delay). MS definitely stumbled with the delivery problems, but it had a strong showing at this E3 – better than Sony. For starters, Microsoft had a much larger array of games. Secondly, they didn’t have to live up to unrealistic expectations from last E3 in the face of a cynical press. Instead, Microsoft got to compare to its own launch titles, rather than optimistic pre-rendered CGI films. All the sports games, especially the 2K series, look half a generation better than they did the year before.

Furthermore, Microsoft has Halo 3, Gears of War, and Mass Effect lined up as AAA titles exclusive to the 360. On top of that, there are other titles near the top tier, like Too Human, Forza 2, and Ninety-Nine Nights, as well as multi-platform games like Marvel: Ultimate Alliance and the new Splinter Cell. Finally, Microsoft stole a blue chip away from Sony by ensuring that the new GTA game will no longer have a delay for other platforms. This says as much about Microsoft’s bargaining power, as Rockstar’s calculation that Sony will not resume its dominance.

Conclusion

Quite simply, Sony blew it. The PS3 didn’t have a bad outing at E3; in fact, it was quite a good show for a console that’s being hurried into production. Several of the games featured for it, notably Assassin’s Creed, and of course MGS4, garnered considerable attention.

The problem is that Sony needed a killer E3 to get the momentum back on its side. Sony had to overcome media cynicism, the 360’s early launch and growing list of titles, the low pricing of the Wii and its ingenious controller – and they failed. Not only that, the PlayStation took a step back in several departments, notably by losing GTA lead time, and having to answer uncomfortable questions about HDMI and HD content for the lower PS3 model, while at the same time deflecting overall pricing issues.

While Microsoft is in the HD DVD camp, it doesn’t have a major stake in the standard and thus isn’t compelled to push it. Sony, as the big name in Blu-Ray, is in the vanguard and is basically forced to add Blu-Ray to the PS3. If the PS3 didn’t have Blu-Ray, all sorts of questions regarding Sony’s commitment to the format would arise, not least from fellow Blu-Ray investors. However, Blu-Ray is figured to be the primary reason for the PS3’s relatively high cost.

Sony has become increasingly reliant on its computer entertainment division in recent years, it has been the only one that is consistently profitable, its growth has been phenomenal and it more or less subsidizes other operations for the company. Sony needs the PS3 to become a huge success. The PlayStation is Sony’s heart, it is the vanguard of the Blu-Ray offensive, and the PS3 is a huge investment – so it must sell in high volumes over a long time, with many game purchases, to amortize the cost.

Meanwhile, the Xbox division can afford to lose money as long as MS has other gold mines. Nintendo plays cautiously and modest sales will be profitable for the company, while at the same time the possibility of the Wii breaking through is increasing.

Will the PS3 succeed? In some ways, there is no doubt. The PlayStation brand name is the strongest in the world, and sheer momentum from one generation to the next will likely propel it to the top spot. However, it is doubtful that Sony will dominate as thoroughly as it once did – and how it needs to again.