Next Gen Console War: Report 3 September 04, 2007 John JCal Callaham

Introduction

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Nintendo Wii

Let's face facts; on the surface the Nintendo Wii should have been blown away by the Xbox 360 and the PS3 by now. It's not like the console has the most powerful hardware (it doesn't). It's not like the games made for the console are so much better than the other two devices (they aren't). It's not like their online multiplayer is the best of the three consoles (the Wii is so far behind in this area it almost hurts). It can't play DVD or Blu-Ray movies. You can't download demos of Wii games. There are so many factors that make the Wii inferior to its competition.

And yet people in the US are still clamoring for the Wii nearly a year after its launch. Sellouts are still the norm for the console; put an ad in the Sunday paper saying that the local Best Buy or Circuit City will get a shipment that day and a huge line forms up that Sunday morning before the store opens. Even with the short supply the Wii still manages to sell two and three times as many consoles per month as the PS3 and the Xbox 360. Make no mistake; the Wii is no longer a "fad". People still want the console. In fact it's very close to pulling ahead of the Xbox 360 in terms of total amount of next-gen consoles in the US.

And why do people still want the Wii? The Nintendo name still holds a lot of sway among regular non-hardcore gamer consumers. The $250 price (with Wii Sports included) makes the console the most affordable to buy, despite some recent Xbox 360 price cuts. And Nintendo's strategy of appealing to the casual and non-gamer seems to have worked out. The influx of party and mini-games like WiiPlay, Mario Party 8 and others stay on the best seller lists.

And the best may be yet to come for the console in terms of its upcoming game line-up this fall. Metroid Prime 3 has garnered impressive reviews as a first person action game made for the hardcore crowd and upcoming first party titles like Super Mario Galaxy and Super Smash Brothers Brawl look like they will appeal to both long time Nintendo fans and the casual gamer alike. There's even a few hardcore third party games due out for the console like Bully, Medal of Honor Heroes 2, Ghost Squad and most importantly Manhunt 2 (which may actually generate some negative publicity for the Wii for the first time).

So can Nintendo still blow this momentum and lose the console war? Actually yes. Let's look at what Nintendo needs to do to maintain their dominance of the console war.

Get more consoles in stores
This may be the single biggest issue Nintendo has to face for the Wii. As we said, sell-outs are still the norm; its a very rare thing to just walk into a retailer and see an unsold Wii sitting on the shelve. If Nintendo can't get enough consoles on store shelves to meet demand they will likely turn to the Xbox 360 and (less likely) the PS3 if they haven't purchased one of the two already.

Stick with release dates for major games
Super Mario Galaxy and Super Smash Brothers Brawl are the two big first party games that Nintendo has planned for this fall for the Wii. However it worries us that so far no one in the press has actually seen Super Smash Brothers Brawl actually being played and to us that means that a delay for its early December release date is more and more likely. Nintendo needs to have both games come out this fall if it has a chance to beat the sales of the heavily hyped Xbox 360 and PS3 games coming out in that same time period.

Deal with the Manhunt 2 issue
Nintendo has marketed the Wii for the family and casual masses but as the Oct. 31 release date for Manhunt 2 comes up many law makers and moral crusaders will attack Nintendo for allowing a game like Rockstar's stealth action game sequel to be released for the Wii. Nintendo will likely try to hide from the controversy, saying it has no say in the content of third party games. However we think Nintendo needs to come out full force to support all types of games for the Wii, not just the mini and party titles.

Outlook-Solid
It's going to take a lot to stop the sales success of the Wii and quite frankly the only real enemy Nintendo has in this case is itself. Despite price cuts on both the Xbox 360 and the PS3 and highly anticipated games for both the Wii's competitors we think the Wii will continue to sell well this fall but the difference between the Wii and the competition will be tighter than the sales differences for earlier this year.

PS3	Page:: ( 2 / 3 )

Sony's next-gen console has taken it on the chin this year. The PS3 has had few games reach the top 10 in terms of sales this year and the so called $100 "price drop" for the 60GB hard drive version was simply a stop-gap measure as Sony rather sheepishly admitted during E3 they were going to phase out that version for the new $599 80GB version. Some financial analysts have already predicted that the 80GB version will also go down to just $499 later this fall once the supply of the 60GB PS2 console runs out but so far Sony has not admitted it will make such a move.

It's the expensive price of the PS3 that has kept the console from flying off store shelves since the initial rush to buy the PS3 during the fall 2006 launch time period. Even the cut in the 60GB price wasn't enough to get the PS3 to outsell the Xbox 360 for the month of July. Even if Sony does lower the 80GB PS3's price to $499 it will still be the most expensive of the three next-gen consoles.

However, Sony is counting on a number of exclusive and semi-exclusive third party games to help its cause this holiday season. The flood of first party game began in late August with the release of the critically acclaimed Warhawk (in both retail stores and via download) but another game that was just released, Lair, has gotten some of the worst reviews ever for a major first party console game in recent memory. Sony needs for its other first party games like Heavenly Sword, Folklore, Ratchet and Clank Future: Tools of Destruction and Uncharted: Drake's Fortune to gain a wide audience. The PS3 has only a few third party exclusive titles but one of them is a biggie; Unreal Tournament 3. This semi-exclusive will launch on the PS3 along with the PC this November and Epic's first person shooter will even allow PS3 players to play UT3 mods created by their PC cousins (the Xbox 360 isn't due out for several months after the PC-PS3 and there's no plans to allow PC mods to be played on that console).

So can Sony come from behind and win this console war? Sure. Here's how we think Sony can come back from third (at least in the US):

Lower the price of the PS3 even more
It's been proven that lowering the price of the console down to even $499 wasn't enough to get people to buy the console over the Xbox 360 and Microsoft's recent price cuts across the board will make Sony's job that much more difficult. They may take a big loss at first but unless Sony does something drastic about the price they will have lost all hope of gaining market share over Microsoft and Nintendo in this console war and if that happens look for a lot of third party developers to abandon PS3 development and switch to the Xbox 360 and Wii only. We think the time is right for Sony to price the PS3 to $399 this fall for the 80GB version. If they don't it won't matter how good their PS3 exclusives turn out to be (LittleBigPlanet, due out in early 2008).

Upgrade their online service
Sony has gotten a lot of attention for their upcoming (and free) Playstation Home service which is supposed to give users a full 3D virtual enviroment to chat with others via avatars, collect virtual items in their virtual pad and do all sorts of other virtual stuff. However it's our opinion that Sony needs to walk in the online space before it can run and in this respect the current state of the PS3 online network still pales in comparison to the Xbox 360's Xbox Live. Microsoft releases demos on an almost daily basis for the console along with lots of other content. However Sony only manages to release a few demos, small games and trailers every Thursday. Sony needs to try to match the current online offerings of Microcoft's console. Otherwise, Playstation Home users might be a lonely bunch.

Stop talking about how Blu-Ray is better for games than DVD
Yes, Blu-Ray can hold lots more data than a DVD disk and it's likely that a few future Xbox 360 games may have to fit on more than one DVD disk. But the crappy reviews for Lair should prove that having a Blu-Ray disk to store data won't make the game better. Sony, concentrate on releasing games that are fun to play on the PS3 and quit telling us about how many sound files can fit on one Blu-Ray disk. Thank you.

Make sure first party games are good
Right now the record is 1-1 on fall first party games for the PS3; Warhawk is fun but Lair is not. Sony needs to get players to ignore the Xbox 360 and Wii by making their fall 2007 games memorable and worth the price of the PS3.

Outlook-Average
Sony has a lot to deal with in order to get out of the many issues it currently has with the PS3. It's not insurmountable but the truth is that they need to get on the horse and try to deal with them instead of making excuses.

360	Page:: ( 3 / 3 )

It says a lot about a console that, after getting hit with a huge publicity scare, has seemingly come through unscathed. We are, of course, talking about the whopping $1 billion charge that Microsoft took in late June after increasing its Xbox 360 warranty to three years, refunding owner's repairs on the "three red lights" hardware issue and releasing new consoles to stores that won't have as many hardware failures (so far their efforts have been mixed with unconfirmed reports saying that there is still a lot of Xbox 360 console owners dealing with hardware issues). Despite analysts' predictions of lower sales following Microsoft's efforts, the Xbox 360 still manages to sell higher than the relatively issue free PS3.

After two years, however, Microsoft is dealing with Nintendo's resurgence as the top selling hardware console. Microsoft three different Xbox 360 versions (to be joined by a fourth this month with the limited edition Halo 3 version) still can't outsell the Wii on a per month basis. However, sales should increase thanks to a recent price drop (especially the $50 price drop of the 20 GB version to $349) .

Microsoft's biggest asset is its upcoming games. It already has a big console exclusive title with the third party game BioShock and in just three weeks you won't be able to get away from seeing Bungie's sci-fi shooter Halo 3 everywhere you look. With Microsoft claiming that the game has already gotten one million pre-orders you can expect a lot of copies to fly off the shelves on Sept. 25. Upcoming first party games like Project Gotham Racing 3 and especially BioWare's long awaited sci-fi RPG Mass Effect should also help the Xbox 36 0 console sales along with exclusive third party games like Ace Combat 6 and Beautiful Katamari.

So can Microsoft get ahead of Nintendo? Yep. Here's how we think they can win the console war at this stage:

Get rid of the Core version of the system
We think that the time has come for Microsoft to just dump the hard drive-less Core system outright and simply sell the 20 GB Premium version and the 120 GB Elite version (the Halo 3 version is supposed to be a limited edition). Less confusion in the marketplace means more sales overall.

Keep improving hardware support
The change in warranty was a good start to getting the Xbox 360's reputation as an unreliable hardware device fixed but Microsoft needs to quickly deal with existing issues on their previously released versions as well as make sure that the new systems coming off the assembly line don't have as many "three red lights" failures.

Make sure Halo 3's launch is perfect
Even though the game has gone gold there are still things that could happen that could make the launch an issue. There could be copies of the game that are unplayable due to issues in manufacturing. Pirates could gain access to the game early. A rush of online players on Xbox Live on launch day could cause slowdowns in the network. Microsoft has pretty much everything riding on Halo 3 being a huge success. It can't have anything happen that could cause the Xbox 360 as a whole to suffer.

Emphasize Xbox Live features
Microsoft has by far the best online service for any console and as we said earlier Xbox Live has new content being released on nearly a daily basis. With the fall/holiday season people will want to download new demos, new Xbox Live Arcade games and other new content. In a recent study it was shown that not many Xbox 360 owners were even aware of downloadable Xbox Live Arcade games. Microsoft might get more customers by going on a campaign to really push their online service as the big difference between its console and the competition (we are also guessing that Microsoft has a major fall Dashboard update upcoming that will add even more features).

Outlook-Solid
Microsoft might find itself behind Nintendo's Wii in sales but if they can overcome the hardware issues and have a successful Halo 3 launch (among other things), the Xbox 360 will still have a successful fall/holiday season in the US and Europe (we won't talk about Japan).

Conclusion

So what will the console war bring as we head into this all important fall shopping season? We will take a look in mid-December after the season ends and give you a fourth report on the war. In the meantime let us know what you think might happen in the comments page and on The Matrix.