Did "Next Gen" Consoles Aim Too High? Nintendo Poised to Smash Competition- Analyst

[zippyjuan]

http://www.xbitlabs.com/news/multimedia/display/20060517083509.html

Sony's Dominance in Game Consoles at Risk – Research Firm.
Firm Believes Nintendo’s Wii – Best Positioned for Casual Gamers

Category: Multimedia

by Anton Shilov

[ 05/17/2006 | 08:35 AM ]


Sony is placing a serious bet that its inclusion of a Blu-ray drive in the PlayStation 3 will entice consumers to pay a premium price for the new console, despite lower cost alternatives from both Nintendo and Microsoft. However, according to ABI Research, Sony’s console pricing strategy is fraught with risk, and may ultimately jeopardize its market leadership position.

“Asking consumers to pay $500 to $600 for a game console, when most have yet to purchase an HDTV, will give many current PlayStation 2 owners reason to consider the competition,” said Michael Wolf, principal analyst with ABI Research's broadband and multimedia research practice.

Competitors Microsoft Corp. and Nintendo offer high-definition gaming and motion-sensitive game controller, respectively. The Xbox 360 game console costs $399, whereas the Wii machine is expected to be priced at $199.

According to a note by ABI Research, the industry embraced the innovation Nintendo has shown with its motion-sensitive controller. By focusing on unique game-play experiences and shunning the graphics space-race consuming its competitors, Nintendo is enjoying much higher publisher support than was evident at the launch of its GameCube, believes ABI Research.

ABI Research also believes that Nintendo is the best positioned of the three to expand into the casual gamer and new gamer audiences with creative titles such as Wii Sports and WarioWare: Smooth Moves.

“Sony has clearly hamstrung itself with a box that is expensive to manufacture, and these costs are driving a retail pricing strategy that places a high financial burden on the consumer,” said Mr. Wolf.

[ray]

The problem I have with the XBox 360 and particularly the PS3 is that they are trying to give them the same features as a computer. I think the Nintendo Wii has it right by skipping a lot of the expensive addons, accessories and features and truly focusing on console gaming.

[Jeffbx]

It's funny, I was just thinking this the other day.

While Sony & MS are fighting it out in the premium market, Nintendo's going to quietly take *all* of the lower end customers. My prediction: Nintendo's growth will explode, Xbox will stay firm, and after the initial release, the PS3 will lose major market share to Nintendo & MS.

[zero2dash]

Nintendo also has the good fortune that Microsoft (several times now at E3) came out and said "you can buy an Xbox 360 + a Nintendo Wii for the same price as a Ps3 system" and it's the truth.

Sony fubar'd this time around guys...mark my words. Most people will never be able to justify spending $600 on a "toy". (And let's be fair here...I'm talking about the REAL Ps3 system, the one with all the features - not the crippled "$100 cheaper" version for $500.)

I'll get a Wii on launch no doubt. Took me awhile to accept that name and I still think they're retarded for getting rid of the code name...that being "Revolution" of course. But the Wii offers experiences that you'll never see anywhere else this hardware generation.

If I buy a 2nd system, it'll be a 360. Geometry Wars is like crack and Gears of War looks frickin' incredible. And let's not forget...Halo 3. :drool:

Another thing - Sony and Microsoft acted like this time around - graphics were all that people cared about. And the truth is, report upon report from E3 clearly states that people were really happy and didn't complain one bit that Wii graphics were only slightly better than Gamecube, because they were too busy having fun playing with the controller. I think we've finally reached a point where the value of "cutting edge graphics" has dropped off quite a bit. Plus Nintendo's got the low cost award in the bag...and if the majority of people buy a Wii as a 2nd console (which, if you believe in internet polls - is what will happen), I think Nintendo's going to end up on top this time around for a change.

[Cubsfan]

I'll definately get a Wii. My purchase of another console will depend only on what platforms GTA is released on :)

[gear02]

This is why I love watching this market. It's so dynamic.

Think about this. Nintendo's strategy may be one of the few times where "lowballing" the technology curve may prove to be the winner. If you look at the past history of technology in general, especially the PC industry (CPU, GPU, etc.) companies tend to push the tech curve as far as they can go. Nvidia and ATI have this ongoing battle such that now GPUs are far more complex than CPUs. AMD and Intel have had a battle for the top CPU for a while.

This is so much fun to watch.

[InfiniteNothing]

I'll definately get a Wii. My purchase of another console will depend only on what platforms GTA is released on :)
Don't computers play that game just fine. I don't see why one would by a system for it.

[Cubsfan]

Don't computers play that game just fine. I don't see why one would by a system for it.

I like playing it in my living room on my large TV (ok, not large, but bigger than my monitor),and I'd rather not have a computer in my living room. The bonus of an XBox360 is that it would serve as a media extender as well.

[Agent Plissken]

The problem I have with the XBox 360 and particularly the PS3 is that they are trying to give them the same features as a computer.

This is said every new console generation. I heard this about 500 times about the first Xbox (and even about the PS2) from customers back in my retail days.
The fact is all consoles are computers. Including the WII, so its hard for them not to have such features. For example, the PS3 has a fancy GPU... so does the WII, although not as fancy, and nintendo just chooses not to make a big fuss about it.

[bagel]

For example, the PS3 has a fancy GPU... so does the WII, although not as fancy, and nintendo just chooses not to make a big fuss about it.

Every console system will need a GPU and a few other core components, but do they all need 60gb hard drives, dvd drives/remotes/players/compatibility, built in dvr functionality, photo/video/music compatability?\

For starters, the Wii is already missing the DVD compatability and the Hard Drive.

What they all really need is an included toaster oven so I can keep myself warm while I play games.

[hapoo]

What they all really need is an included toaster oven so I can keep myself warm while I play games.


I believe the xbox 360 already includes that functionality in the power brick.

[InfiniteNothing]

Lol!

[Memo]

All they have to do is release a Final Fantasy game on the PS3 and people will buy it.

[InfiniteNothing]

We're not saying no one is going to buy it. Obviously wealthy people who are crazy about the sony proprietery games are going to want to buy it. The really question is for what systems will the 3rd party gamers (ie square enix) make their games?

[ProMinx]

All they have to do is release a Final Fantasy game on the PS3 and people will buy it.

But what if those same games are released...for the 360? Check out this story (http://www.gamersreports.com/news/2644/). It seems that Playstation is losing its exclusive titles across the board. Spore added the 360 to its list of platforms recently, the MGS developers said they want to make the next MGS title for the 360 but they didn't get the dev kit early enough, the next GTA game will be coming to the 360, Final Fantasy is making its way to 360 with at least one new title, andjust as impressively...Devil May Cry 3 has been announced for the 360. Say goodbye to the days of Sony exclusivity on third party titles.

(Also...this post should be titled that Sony aimed too high - not Next Gen consoles. The article only says negative things about PS3 and even specifically mentions the strengths of the 360... Personally I still have no interest in the Wii, and the more they demo games on their new controller...the more interest I lose. I mean...these are the same people who created the absolutely terrible N64 & GameCube controllers, not to mention the GameFist.)

[InfiniteNothing]

There was no need to attack the 360. The poor sales numbers speak for themselves.

It's hard to be objective about controllers because people generally just like what they are used to but the N64 controller was revolutionary because it brought us analog controls and rumble features. It's still a pretty good controller and it was great for it's time. In terms of the current generation controllers, they all are about the same. I have to give a slight edge to the Cube though because the buttons don't look the same. This makes the controller a little easier to pick up and use. It just helps your brain cells just a little bit but that translates into a better gamer. The tactile feed back on the analog buttons helps with precision too.

The Wii controler is amazing though because of how much it involves the player. I can see why you wouldn't like it (change is scary) but it's going to be mandetory in a whole new generation of games. As for the games developed today who don't have that controller in mind, a "classic" controller is in the makes. It looks like the SNES controller + analogue and rumble.
It's too soon to start making judgments on what systems 3rd party game makers will chose. They will inevitably make games for the system that is A. easiest to make games for B. most popular.

[yippiekiyeh]

I think that like all Nintendo Consoles the Wii should also come in at the $199 price. It is an excellent idea to continue to push the console envelope and also keep the costs down.

[ProMinx]

I think that like all Nintendo Consoles the Wii should also come in at the $199 price. It is an excellent idea to continue to push the console envelope and also keep the costs down.

Is it really the same price point when you consider inflation? Nintendo should be allowed to raise their prices a bit, if only to cover the higher wages they pay their workers these days.

Console prices adjusted for inflation (http://curmudgeongamer.com/2006/05/history-of-console-prices-or-500-aint.html)


There was no need to attack the 360. The poor sales numbers speak for themselves.

Which poor sales figures were those? The complete sell-out for month after month (in all markets except for the fanatically nationalist japanese video game market, where the numbers are actually beginning to spike now that perverted/rpg games have arrived to assuage their "peculiar" tastes)...or the poor sales figures for games...where the system still has the highest game:console attach ratio of any young system? You're right. Those are absolutely terrible figures... (wait...wasn't this whole thread about speculating on wii's potential - not the proven success of the 360?)

[ialsohaveadream]

Console prices adjusted for inflation (http://curmudgeongamer.com/2006/05/history-of-console-prices-or-500-aint.html)
Ah, the Neo Geo. I believe the launch price at the time for that system was $600. It was laughed out of existence. Funnier still is that 3DO tried to pull off the same thing several years later.

[Grubbie]

It's funny, I was just thinking this the other day.

While Sony & MS are fighting it out in the premium market, Nintendo's going to quietly take *all* of the lower end customers. My prediction: Nintendo's growth will explode, Xbox will stay firm, and after the initial release, the PS3 will lose major market share to Nintendo & MS.


The problem with the low end is MS will compete with the 360 core. They could easily drop the price to 250 for a core when the Wii comes out. Also in 3years, MS could match the price of the Wii with their Core, then consumers get better looking games for the same price. Xbox Live Arcade will also compete on the casual games side against the Wii.

I personally think MS will win the war, Nintendo will come in 2nd by going with less and Sony will fail when blu-ray fails.

[Airencracken]

Nintendo Wi-Fi is really quite good and is free unlike seXbox live.

[InfiniteNothing]

Is it really the same price point when you consider inflation? Nintendo should be allowed to raise their prices a bit, if only to cover the higher wages they pay their workers these days.

Console prices adjusted for inflation (http://curmudgeongamer.com/2006/05/history-of-console-prices-or-500-aint.html)



Which poor sales figures were those? The complete sell-out for month after month (in all markets except for the fanatically nationalist japanese video game market, where the numbers are actually beginning to spike now that perverted/rpg games have arrived to assuage their "peculiar" tastes)...or the poor sales figures for games...where the system still has the highest game:console attach ratio of any young system? You're right. Those are absolutely terrible figures... (wait...wasn't this whole thread about speculating on wii's potential - not the proven success of the 360?)

They aren't sold out. Go to your local store. The 360s are plentiful. If not see amazon (http://www.amazon.com/gp/product/B000F8J1AW/qid=1148110597/sr=8-3/ref=pd_bbs_3/104-0269181-4667175?%5Fencoding=UTF8&v=glance&n=468642).

[InfiniteNothing]

The problem with the low end is MS will compete with the 360 core. They could easily drop the price to 250 for a core when the Wii comes out. Also in 3years, MS could match the price of the Wii with their Core, then consumers get better looking games for the same price. Xbox Live Arcade will also compete on the casual games side against the Wii.

I personally think MS will win the war, Nintendo will come in 2nd by going with less and Sony will fail when blu-ray fails.

But in 3 years the Wii will be $150 or less. Also, by then, we'll be on the tail end of this gen's console war. The war might be over.

[ProMinx]

Sorry Infinite, but those 360 consoles didn't become consistently available without a waitlist until a month or two ago. The length of that waitlist is usually considered a good thing at console length. Regardless, MS is definitely doing well in their console sales volume in this country.

[Maarchk]

I think in this generation.. People will grab the 360 cause its out first and people have the attention span of an ant. They will want the hip new toy and 360 will be it for now.
Wii will be popular for people who want something for young kids, and for people who like the controller, and/or don't have or wish to spend a ton of money. And these systems will both be taking people away from ps3 while it delays its arrival. And when it does arrive, at 600 bucks, i imagine some parents will finally say, umm i'm not spending that plus 400 dollars in games. With 400 bucks i can get you a Wii and games on top of it.

I haven't played 360 but it seems nifty. And i have only heard pretty good things about nintendo's new box. PS3 should be good, but i think the time lapse and high costs put them in real danger. Not as many people see a video game console as a necessity as they did when computers were more expensive than video game systems.

[InfiniteNothing]

Sorry Infinite, but those 360 consoles didn't become consistently available without a waitlist until a month or two ago. The length of that waitlist is usually considered a good thing at console length. Regardless, MS is definitely doing well in their console sales volume in this country.

What are you basing that on? I don't consider 1.6MM a quarter good. Compare to Nintendo DS at 3.4 MM a quarter.

[Jeffbx]

What are you basing that on? I don't consider 1.6MM a quarter good. Compare to Nintendo DS at 3.4 MM a quarter.

That's not such a good comparison - a $110 handheld vs. a $400 console? The handheld market will always be a little different than the console market - it's not at all unusual to have multiple handhelds in the same house, but pretty rare that anyone would buy 2 or 3 Xboxs or Playstations under the same roof.

I don't think a good console comparison can really be made until after the PS3 has been out for about 6 months or so.

I think another thing that will hurt Sony is the failing confidence that people have in the brand. With all of the bad press about rootkits, RIAA lawsuits, proprietary hardware & high costs, Sony is looking at a lot of lost goodwill.

[InfiniteNothing]

Okay... the PS2 sold at 3.1MM a quarter when it came out. It sold 1.4MM in the first month alone. The XB360 is doing terribly.

[ProMinx]

Okay... the PS2 sold at 3.1MM a quarter when it came out. It sold 1.4MM in the first month alone. The XB360 is doing terribly.

Where do you even get your numbers? Have you made them all up so far, or did you only make up the numbers for the 360? Microsoft sold 1.5 million 360 units by the end of 2005 (Nov. 22-Dec. 31). And let us not forget that one of the main reasons PS2 sold so well is because other DVD players were roughly equivalent in price without the added benefit of playing games.

The most recent XBox 360 numbers I have found were from April 27, and by that point Microsoft had sold 3.2 million XBox 360s (1.8 million in the US, 1.1 million in Europe, and 300 thousand in Asian markets (though 360 hasn't launched in most Asian markets yet)) with an estimate of 5-5.5 million by the beginning of june. Don't forget that modern consoles make all of their money from games and peripherals (mainly peripherals), and the 360 has the highest sales rate per console of any console at this point in its lifecycle.

Please don't make up numbers and post them just to throw people off, Infinite. The numbers you quoted as current are actually a little lower than first month sales figures, so either actually look up an article...or if you did read anything before posting "current" numbers, make sure you look at the date...

[InfiniteNothing]

We are looking at the same numbers 3.2MM/2 quarters =1.6MM/quarter.