Let the Console Wars Begin

ps3For some years, Sony has been the reigning leader in the video game realm. The release of its PS1 and PS2 consoles have become big hits in the market, easily giving Sony the upper hand in the competition. Up to this year, the PS2 is still selling like pancakes, bagging in more revenues than its other competitors. According to David Cole of DFC Intelligence, Sony is pretty much in control of the gaming market.

Unless it makes a wrong turn, that is.

Apparently, Cole thinks so, "Microsoft and Nintendo had to hope Sony fumbled or significantly changed its strategy so that they could get an opportunity to capture some of that PS2 audience. Now it is clear Sony is handing its competitors a golden opportunity."

Surely, Nintendo and Microsoft are girding their loins for an attack of opportunity. The Wii and Xbox 360 are like their own versions of weapons of mass destruction, both levelled against the much-awaited release of Sony's PS3. In this clash of gaming titans, Cole predicts that Nintendo would come in first.

The full article awaits after the jump!

ps3For some years, Sony has been the reigning leader in the video game realm. The release of its PS1 and PS2 consoles have become big hits in the market, easily giving Sony the upper hand in the competition. Up to this year, the PS2 is still selling like pancakes, bagging in more revenues than its other competitors. According to David Cole of DFC Intelligence, Sony is pretty much in control of the gaming market.

Unless it makes a wrong turn, that is.

Apparently, Cole thinks so, "Microsoft and Nintendo had to hope Sony fumbled or significantly changed its strategy so that they could get an opportunity to capture some of that PS2 audience. Now it is clear Sony is handing its competitors a golden opportunity."

Surely, Nintendo and Microsoft are girding their loins for an attack of opportunity. The Wii and Xbox 360 are like their own versions of weapons of mass destruction, both levelled against the much-awaited release of Sony's PS3. In this clash of gaming titans, Cole predicts that Nintendo would come in first.

Since the 1980s, sales of Nintendo consoles had declined. In the previous generation, a bulk of market gaming share went to Sony PlayStation 2. However, now's the time for Nintendo to attract not just its fanbase, but to mass consumers as well. "By letting Sony and Microsoft split the hard-core teenage/twenty something videogame marketplace, the Wii could end up number one in market share for the next generation."

Microsoft's Xbox also has the chance to become the leader in the gaming industry, but it may be too focused on breaking in to casual gamer's tastes. The production of portable games and other casual games may take Microsoft's attention off the Xbox, disrupting its opportunity for gaming domination.

wiiSadly, Cole says that Sony PS3 may come in third. With it's price tag at $600, it seems that Microsoft and Nintendo are gaining on battle advantage. Cole also adds that the PS3 is not conducive to the mass market video game audience, giving the Wii and the XBox 360 a better opportunity to attract more consumers. Sony has high hopes for this console. Its Chief Executive Ken Kutaragi says that the PS3 is not merely a game console, but more like a computer slash home entertainment system. If you're looking in  a long-term run, the PS3 is is cheap for all the features it offers. Here's the breakdown of a home entertainment system:

High-definition television: $2,500
Stereo Receiver: $600
Speakers: $1,200
Cables: $400
Installation and Calibration: $1,000
Movie/CD/Game Player: $600

At $600 for the PS3, it's liking getting more for less. As it is almost like a computer, you get to update its parts regularly and be at par with the latest technology available. The problem with this, is that it keeps getting more costly to maintain. Kutaragi says
that since PS3 is a computer there are no 'models' but configurations. We'll want to upgrade the hard drive size very soon. If new standards appear on the PC, we will want to support them. We may want the Blu-ray drive to write. In the PC business, if you fix the spec for two years you'll be caught by competitors. Computers should be changing, right? It's inevitable that 60GB hard drive will become too small, and memory may become too small as well.

Thing is, in the gaming industry, the prices of the consoles keep going down. As good as it sounds, this idea seems to be more elitist, than most gaming consoles are presented. The PS3 is an utterly cool device, no doubt. But the big question is, "Will you be willing to buy this product?" It seems that most consumers aren't. According to Cole:

xbox"Consumers in much of Europe (and North America as well) simply aren't ready for that type of expenditure and success for Sony will require that 1) they can keep the PlayStation 2 business alive and slow consumer adoption of new systems and 2) they can make the price more affordable. We believe that under the best case scenario the PlayStation 3 has a much lower installed base than the PlayStation 2. Under the worst case scenario the bottom falls out for Sony's market share. Its new approach seems to be to position its products as luxury items, epitomized by a recent ad in a French high fashion magazine which features a PSP dripping with diamonds."

So is this a losing fight for Sony? Unless it changes its tactics, Cole predicts that it might be so. But hey, the console wars had barely began. There's nothing we could do but sit back, wait and hope that the consumers will really emerge as the victor in this console war.



Via Next Generation

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