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Thursday, July 21, 2005

Competition between the consoles benefits us all….but what about the games?

Competition between the consoles benefits us all….but what about the games?

By: Bryan Randal

It is a common economic principle that competition will benefit the consumer by providing better products at more competitive pricing. As you look at the current or upcoming Console Wars you can see this economic principle in action. Microsoft has been taking a $100 loss on the original Xbox consoles since the launch in 2001. Sony just recently announced it would be going down the same path to bring us the Playstation 3 at a reasonable price point. Although we do not always agree on which console is the best, I think we should all thank our lucky stars that we have three competitors and not just two or god help us a monopoly.

The reason I say this is because Sony and MS are approaching the upcoming Console Wars with a slightly different strategy than that of Nintendo. While MS and Sony can come out guns blazing with super GPU’s and Cell Processors Nintendo is being forced to change its approach or be swallowed by theses flopping giants.

Nintendo has been a pioneer in the industry since the first Family Computer or as it is know in the US the Nintendo Entertainment System (NES). Everything you see in a console today can somehow be traced back to those early days. It is still to be seen but they are claiming that the Revolution is about to change the industry once again with a completely innovative controller. While you can argue that MS and Sony have been innovative on the software side (SOE, Live) there has been little evolution on the hardware side other than pure performance. I am not trying to say Nintendo is better for this just that I am happy to see them trying to innovate and break off from the norm….because we all benefit.

The two powerhouses MS and Sony are putting out super machines that promise to push our experience by providing graphics, resolutions and sounds that will change the gaming experience by making the line between gaming and reality much thinner. Nintendo realizes it has to be about more than just the performance and graphics. They tried to do this with the Cube by offering a unique line up of original games. Although there were some great games for the console (e.g. Metroid Prime 1 & 2, Resident Evil 4) they didn’t really capture a huge market share.

As you can see we are benefiting from the three competitors because you have two pushing the graphics side and one pushing (although still to be seen) innovation. Whether it is the hardware or the games Nintendo needs to step it up this round. Offering the complete Nintendo back log of games is a good start but it will need some killer launch apps to fully support the mystery controller.

So as you look at the current Console Wars and post your hatred for MS or Sony (Nintendo is everyone’s friend) keep in mind that we are all in this together. So if just one of these companies fails we all lose.

Although this competition is a good thing as far as price points and consoles pushing each other to higher plains there is a double edge sword here. Some game developers can actually stifle the industry because of the power they wield. They snatch up exclusives with sports leagues and seem to buy every growing development company in their path. With development costs on the rise the gaming industry is inevitably going to turn into a digital Hollywood.

The difference here is that you will not see independent developer games or indie games because of high start up costs. In the movie industry a film can be shot at relatively low cost but the gaming industry is just getting more and more expensive as each generation progresses. Hopefully these large developers allow the creative minds in their work force to explore unique and mind expanding projects off the beaten path. But that is a story for another day.

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