How can Microsoft, Nintendo, and Sony stay on top? We give each console maker recommendations for 2007 and beyond.
It's a critical time for the Big Three console manufacturers. As the second holiday season rapidly approaches, Nintendo, Sony and Microsoft will do all they can in an effort to win consumer dollars and solidify their mark in gaming.
"This is the most competitive holiday season in the history of video games," says Pacific Crest analyst Evan Wilson. Indeed it is. Fortunately, the increased competition spells increased choice and value for gamers.
But what does each console maker need to do to stay ahead of the competition? We'd like to answer that very question, assuming we were in charge of each respective company. And though it's a lot easier to gamble with other people's money, it doesn't make it any less fun. So come along and backseat drive with us!
Microsoft, Xbox 360.
What a year the Xbox 360 has had, for better (the games) and for worse (the negative publicity). After launching to a great start in November 2005 and throughout 2006, the company's momentum quickly deflated with the introduction of Nintendo's Wii and the surfacing of 360 reliability issues in 2007. What will it take for Microsoft to end the cycle on a high note? In order of importance:
1. Release more reliable hardware. My fellow Sports Legends' colleague Vicious Sid worded it best when succinctly describing the Xbox 360: "Great games, lousy hardware." While the extended warranty saves gamers from incurring additional repair fees, it's still a tremendous hassle to box up and ship back your broken console... not to mention the processing time, which can take weeks. Furthermore, the estimated 25-33% failure rate is sure to keep people from buying the machine, as evidenced by waning sales this year. People are waiting for better 360 hardware. Microsoft needs to oblige.
2. Reevaluate the Xbox 360 value proposition. My college economics professor told me that when you drop the price of something, regardless by how much, demand for said product will increase. That's a fact. Sadly for Microsoft, the current $50 price drop when coupled with its later-than-expected concession will do little to boost 360 sales. Microsoft would be wise to reduce the price further still this holiday in an effort to reflect historical cuts; say upwards of a 40% drop to $240 by its third year as was the case with the original Xbox. Additionally, the Xbox 360 lacks a high-definition movie player, wireless networking, and free online multiplayer, something PS3 owners can get for a mere $50 more (10 percent) than the Xbox 360 Elite. That said, it's clear Microsoft should do something to make the Xbox 360 more appealing in terms of its valuation.
3. Make Xbox Live free. Microsoft guessed wrong with the belief that most gamers are willing to give away at least $50 a year in addition to Internet costs to play others online. Especially when you can already do that for free (minus Internet costs) on PCs, Wiis, PS3s, DSs, and PSPs. Yes, Xbox Live is superior in some regards, but "the get what you pay for" argument has run its course. Microsoft needs to drop its Xbox Live service fees by next year. In doing so, we're confident many more gamers will "jump in" causing similar effects to that of social networking sites such as Facebook and Myspace. Why charge a fee when you could make more money by advertising?
Microsoft might not turn a profit on their Xbox business until next generation. In understanding that, the company will be in a better position to follow our above advice and aggressively expand their install base, something that is sure to add several more games to their already stellar lineup. That strategy is hardly a failing one, rather one with greater perspective that could easily put Microsoft on the path to becoming the formidable giant in console video games. Good things come to those that wait.
Likely outcome: Microsoft observes recommendations one and two, but early reliability issues and their reluctance to ditch Xbox Live service fees amid increasing competition from Sony and Nintendo keeps the 360 from "winning" this generation. Still, the console goes down in history as a huge success with gamers as Microsoft readies its third attempt to knock one out of the park with the "Xbox 720."
Nintendo, Wii.
Nintendo really pulled off a doozy since the GameCube, moving from forgettable purple kiddie consoles to unforgettable white motion-sensing ones. And let's not forget that the company fathered the best-selling system on the planet over the last two years, the swanky DS. Superb motion controls aside, the Wii's dated graphics and processor technology put the console's sustainability in doubt. Let's look at what Nintendo must do to keep their moxie in the spotlight.
1. Keep things fresh. Wii Sports changed gaming. It also helped Wii achieve massive sales for the better part of the year. The man behind the success: Shigeru Miyamoto, the same man that created Mario and Zelda some 20 years ago. In time, however, Wii Sports can't carry the system forever. To counter the decrease in interest and continue to captivate both gamers and casual players alike, Nintendo needs to deliver experiences that can only be found on Wii. Games like Wii Fit, Wii Music, and even Metroid Prime 3. Titles that turn the heads of even the most jaded gamers, if only for a while. You can never have too much fresh fruit. Just remember: it rots quickly.
2. Indulge the hardcore gamer. If Nintendo really wants to go the distance, they need to give core gamers what they want: deep, mature games, often with online modes (and sans frustrating friend codes). And don't confuse mature with repurposed ports; We're talking about cultivated and meaningful games built from the ground up for Wii that inspire and imagine. Games that take the action, adventure, RPG and newly invented genres a step further. Not just motion controls, but original gameplay with engaging stories. Nintendo need only look to their already dependable DS handheld for inspiration, a system that features an assorted platter of both casual and mature games for all ages. If Nintendo follows suit with Wii, they'll likely have the entire gaming community in the palm of their hand.
3. Upgrade the system to HD with forward compatibility. HD is slowly on the rise, and it looks splendid. No one doubts Wii's visual ability over the next two years; second generation games are already looking sharp in enhanced 480p definition. But at some point, users are going to want the complete graphical entree. Why not give it to them? Tech prices are already coming down for HD-ready components, and soon Nintendo will be able to integrate those abilities into the Wii for a still-attractive price. Nintendo could also work some magic with "forward compatibility" so those wanting to stick with original Wii hardware won't get left behind. Incidentally, a hard drive or regular use of multi-gigabyte SD cards for playable demos would further maximize the console's much-debated life expectancy.
Given the changing dynamics of video games, the unproven longevity, and the the growing interest in high-definition video, uncertainty in the Wii's long-term chances is justified. However, it won't take much for Nintendo to maintain their current momentum provided they abide by what their most loyal fans desire: to be heard. Again, the DS is an excellent example of the company's potential.
Likely outcome: If we had to put money on it (fortunately we don't), we'd say Nintendo won't indulge the hardcore gamer as much as some would hope, though core gamers won't be completely left behind. Recommendation one is (almost) a sure bet. Recommendation two will partially come to pass. And recommendation three is a long-shot at best. Nintendo is still very much the wild card in the console race.
Sony, PlayStation 3.
It could have been worse for Sony's PS3 were it not for the system's quiet return to acceptable public relations levels in 2007. Despite the console's high asking price and limited game library, things are looking up for the PS3. Thanks to Microsoft's "red ring of death" debacle, Sony was able to deflect some negative attention. But it will take more than a stumbling opponent to get Sony back on track. Here's what they should do in 2008 to muster a fight.
1. Lower the price to $399. You can talk great games all you want, but you have to own the hardware first to play said games, and the PS3's price point still isn't at a digestible level for most people. Without widespread adoption, Sony will be unable to drive growth and negotiate key PS3 exclusive games. Yes, a second price drop is hurtful to Sony's bottom line, but it's a crucial move in keeping gamers intensely interested in the PS3. The one sticky point is that even a $399 price point is too high for many gamers, as visible by the Xbox 360's strong but unspectacular sales. But Sony has the Blu-ray advantage, inroads in the HD movie market are sure to pump some added value into what is, all arguments aside, a beautiful piece of hardware.
2. Wow gamers with something new. Since announcing the PS3, Sony has brazenly hyped the Cell processor and Blu-ray with little to show for it. As a result, confidence in that promise is steadily declining. To make up for lost time, Sony must show consumers that the proprietary technology matters to games...assuming it really does. Whether that's super-smart A.I., unprecedented online multiplayer battles, or inventive use of the Sixaxis motion sensor is another story. In its current state, the PS3 has trouble differentiating itself from 360 and Wii outside of a handful of proven games and first-party prospects. The system needs a unique identity, and it needs it fast.
3. Revitalize the PlayStation brand. For the last 12 years, playing "PlayStation" was synonymous with playing video games. That's a testament to Sony's lasting impression as a game maker on par with Nintendo, but it's going to take a lot to restore the respect and admiration of gamers to PS1 and PS2 levels. With its strong lineup of first-party games, Sony is in as good a position as any to return to prominence. Still, the recent exodus of developers to both Xbox 360 and Wii leaves Sony in uncharted territory. What was once the master of third-party relationships will now have to stand on its own two feet to rebuild itself as a trusted and ubiquitous name in gaming.
Interestingly, Sony has become something of an underdog this generation despite its being the dominant incumbent two years ago. That is sure to foster respect from a forgiving and faithful sect of gamers. Avid Sony supporters only helps build moral, something it will need if it wishes to return to greatness. Who doesn't need cheerleaders from time to time?
Likely outcome: We suspect Sony will act on items one and (partially) number two. The PS3 will get another price drop in 2008 (maybe even a Christmas '07 surprise), and knowing Sony, they'll have something special to garner additional enthusiasm. With no guarantee on item number three, however, the PS3 could find itself the Nintendo 64 of this generation: a platform with some great games, but one that never fully reached its potential due to early misguided decisions.
We don't expect the Big Three to follow our sound advice. Why should they? But if they do, we can virtually guarantee all of their wildest dreams will come true. Likewise, gamers will find themselves in the middle of the most enjoyable console generation to date. Giddy up!
-Sports Legends CEO
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