gregjammer
Feather Trainer
NextGeneration said:What would our industry be like without competition between Sony, Microsoft and Nintendo? Boring as hell is our answer. If you want a recap on what happened in 2005 with the big three, read on.
Sony
PlayStation 2
As the market leader, Sony set the pace for the current generation of hardware in 2005. Month after month it was the volume leader and while most analysts earlier in the year expected to see a price drop on PS2 to $129 before the holiday season, Sony stuck to its $149 price point (likely much to the relief of Microsoft; its hard disk laden Xbox would have a difficult time keeping pace with any pricing moves).
On the subject of PS2 pricing and in some cases supply shortages, many analysts were depending upon a price move and the assumption of available hardware for PS2 to see the market grow in 2005 as a whole. Lower prices on hardware generally attract lower tiers of consumers to the market and simply that didn't happen this year. As a result, predictions of 3-5% overall growth were restated in October and November to be flat or down by most analysts.
The absence of a price move from Sony and no software mega-hits such as GTA: San Andreas, Halo 2 and others Q4 2004 have left 2005 with a deep hole to fill.
Doom and gloom aside, the PS2 crossed the 100 million unit shipped mark in September 2005, which was three years and nine months faster than the PS1.
PSP
The big news for Sony this year on the hardware front (at least tangibly) was the introduction of the PSP in the US on March 24. Despite shipping 1 million units on day one and selling more than a half million units in the first two days on sale ($150m), the typical hardware shortages and eBay mark-ups happened anyway. On a positive note, the unit came in at a more consumer friendly price than many analysts expected just six to nine months earlier, where talk of $400 was common among pundits. By June, most of the immediate short-term demand had been met and the system settled into more typical availability and sales for the remainder of the year (November and December sales numbers are not available as this is being written).
According to Sony, by mid-October, 10 million PSPs had shipped worldwide, with 4.5 million of those being in North America. Its pace of adoption to this point has exceeded even the PS2's. Roughly 20 million pieces of software have been sold worldwide also by mid-October giving a tie ratio of roughly 2:1 (which is solid for portables, but weak as compared to static console ratios).
A somewhat surprising bright spot with the PSP's release has been the uptake of the UMD movie format by studios and consumers alike. By mid-October, 15 million UMD movies were sold, which is nearly as many games that have sold.
PlayStation 3
The wraps were taken off the PlayStation 3 at Sony's pre-E3 press conference. Non-playable demos and canned footage games in development (over which arguments still rage over what was 'real' and what were renders made to be 'representative') wowed the media and stole a good bit of thunder from the somewhat underwhelming Microsoft presentation that followed.
All of the numerical comparisons between PS3 and Xbox 360 have been done but in terms of real-world application, I'm still not certain that the public at large or the media is any closer to determining whether there's any significant difference between the capabilities of the two systems. To be fair, developers have had far less time with the scant PS3 development systems that are out there as compared to the Xbox 360 kits so an apples-to-apples comparison is difficult. E3 2006 will obviously be more telling.
Blu-ray is the big and obvious difference between PS3 and anything else. Clearly, Sony's strategy is to use PS3 to get Blu-ray into the homes at a subsidized price point. Depending upon who you speak to, Blu-ray is either the factor that makes PS3 the clear winner in the upcoming generation (studio support gives a positive reason to adopt, developers praise the increased storage capacity) or a boat anchor (Merrill Lynch says Sony's cost of goods and ability to compete on price is screwed due in large part to Blu-ray's inclusion and Sony's overall financial wellbeing).
The other major question mark is Sony's online approach. Microsoft is clearly the front runner so far in the online space with robust but simple systems for connectivity, community management, e-commerce and limited e-distribution. Nintendo's Wi-Fi connection implimentation, while still early, shows promise for a company that has previously eschewed online arenas. On the PS2, the staunch approach that publishers are responsible individually for anything they do online has not generated the same attention or delivered the quality of experiences of the other two manufacturers. There are some rumors that Sony is working on something in this space, but no details have ever been forthcoming.
As we close out 2005, we've still not yet seen an actually playable PS3 title; we know nothing about launch dates or pricing other than vague hints and innuendo. Rumors that it won't be available in 2006 (and several analysts have expressed serious doubt for Europe to get it in 06 under the best of circumstances) have done the rounds but this is nothing new. PS2 was allegedly not going to make its 2000 ship year either, but it did for the US and Japan at least.
Despite all of these questions, many in the industry don't consider the next generation to have truly begun until Sony releases the PS3. Before the hate mail starts, this is not necessarily because of Sony's prominence as the market leader in all three territories or the belief that PS3 will deliver some technological or gameplay experience beyond what Xbox 360 can. It's more because development resources for next generation games can be amortized across two platforms instead of one, making for a far more viable market place. It's exceptionally difficult to justify the next generation development costs with just the Xbox 360 user base to support them.
Nintendo
GameCube
With shrinking retail presence and meaningful publisher/developer support, 2005 was a very tough year for GameCube. Hardware prices are already cut to the bone at $99 including a game packed in. Nintendo's pricing strategy has left it as the 'preferred second system in the home' according to many analysts and such status is not conducive to continued strong third party or retail support (with the sale of non-exclusive titles generally going to the other system in the home).
Looking at the E3 announcements for GameCube, new Donkey Kongs, Mario DDR, Mario sports titles, Battalion Wars and a Fire Emblem did nothing to excite the masses. They did excite a several dedicated forum readers, but it's hardly the same. The Delay of Zelda: Twilight Princess into 2006 crushed any significant sales hope for the system in 2005.
And Nintendo seems to realize this situation. It's certainly going to run GameCube operations as well as it can to maximize its profits (which it has done admirably despite a drastic crash in margins in 2005, particularly for the GameCube business) but even in speeches at GDC and E3, Nintendo CEO Satoru Iwata clearly put the emphasis on the Nintendo DS and Revolution, not GameCube.
Nintendo DS
When Satoru Iwata gave the keynote speech at GDC in March 2005, he touched on several market factors that lead to the direction chosen for the Nintendo DS (and in many respects also the Revolution). The need to innovate and attract new players to the market was cited as the key motivators in both the design of the system's interfaces and the types of games Nintendo is developing for it. At E3, Iwata presented Japanese sales data for Nintendogs and Brain Training that backed his assertions that Nintendo was broadening the market and attracting new customers with DS. At next year's E3, we hope there will be US data that will bear out similar mechanics for this market.
By the close of March 2005, the DS had shipped more than six million systems worldwide. At E3, Nintendo VP of sales and marketing Reggie Fils-Aime's numbers indicated that DS was outselling the PSP worldwide. He quickly countered the obvious counterpunch to his numbers ,that was the PSP wasn't yet released in Europe, by rightly pointing out that's not his problem.
Many believed the DS wouldn't be able to sustain the onslaught of marketing from Sony's handheld and the versatility the PSP provided, despite Nintendo's historical dominance of the portable category. In reality, a very competitive price point and some innovative titles making use of the system's unique interfaces (Nintendogs, in particular) have kept the DS very competitive in the US.
But all is not rosy with the DS. Third parties are complaining that, as with the Gamecube, their titles are not selling terribly well, with few exceptions. The DS sales charts are dominated by Nintendo titles so there's some question as to whether the wide range of third party support will continue (especially from Western publishers who typically don't benefit from the system's sizable base in Japan).
Game Boy Advance
While it's not at all sexy or in any way cutting edge, the Game Boy Advance business is still an incredibly lucrative one with more than 28 million GBA's sold in the US to date. Hardware continues to sell at a good clip and the introduction of the Game Boy Micro (in various colors and versions) this fall only helped keep that train running. Developers and publishers are still getting calls for GBA products and retailers continue to devote sizable shelf space to the platform (far more than for PSP or DS). With continued attractive repackaging and reduced prices, the future for GBA remains bright.
Revolution
At GDC in March, Iwata dropped hints regarding the system's unique features and Nintendo's need to expand the market once again. At E3 in May, the unveiling of the industrial design of the console and announcement of backwards compatibility and availability of Nintendo's vast library spanning 20 years of content wowed consumers and the media. At the Tokyo Game Show, Iwata's keynote unveiled the visionary gyroscopic controller. And last month, Shigeru Miyamoto indicated that there were still more secrets to be revealed.
Developer feedback on the early kits has indicated the system technically won't be up to the tasks that the Xbox 360 or PS3 are. Iwata indicated that Revolutions battle wouldn't be fought with technical prowess and it wouldn't support HD formats (presumably beyond the base 480p that even the Gamecube supported). Reggie Fils-Aime has pointed to market research that indicates improved graphics aren't what consumers are looking for in terms of innovation. As with the DS, Nintendo says that interface is what it's all about and that Nintendo is seeking to be a market disruptor with Revolution.
In the console space in terms of marketshare, Nintendo was largely being written off coming into 2005. In terms of mindshare and interest, and Nintendo's unique approach with the Revolution is giving much of the industry reason to pause; not just because of the different stance Nintendo has taken, but because many of its messages (stagnancy in game innovation, cross platform ownership inflating the sense of true market growth, and 2005's particularly paltry software offerings and sales) are opportunistically timed and well delivered.
As with the PS3, there are still a lot of questions to be answered. When is the system coming? And at what price point (hinted to be attractive as compared to Xbox 360 and PS3, but how much more attractive) and of course, how will the games actually play. Technical demos showing the controller interface are one thing, but building entire game experience from this interface is quite another. Also, with more limited technical prowess, even with the traditional controller 'sleeve' interface being available, will Revolution conversions of PS3 and Xbox 360 titles remain compelling or will the Revolution titles have to stand on their own as far as financial viability goes? 2006 will hold the answers.
Microsoft
Xbox
While not nearly as dire as the GameCube in terms of decreasing shelf space or developer/publisher attention, 2005 was definitely a down year for Xbox. Similar to the PS2, there were no significant hardware price changes, no pack-ins, no interesting movements or promotions to shift more hardware and attract new customers.
Few first party resources were put toward the original Xbox with most of them being focused on games for the new hardware. Notable first party efforts for 2005 for included Jade Empire and Forza Motorsport, but let's face it, as new brands, these titles aren't the same caliber of hardware movers as Halo or GTA (though Xbox did finally get San Andreas in June).
Analyst estimates for the installed base of Xbox in the US by the end of 2005 are about 15-16 million units.
Xbox 360
Most publishers and developers are resistant to participating in platform transitions because they're costly and fraught with uncertainty. Let's come right out and say it, Microsoft forced this transition to come sooner than many would have liked (including Sony and probably Nintendo). The opportunity to milk the large user bases and take advantage of the technology investments and solid tool chains made during the PS2/Xbox generation was abbreviated by the Xbox 360's arrival just four short years after the introduction of the first Xbox.
That's not to say that there won't be a PS2 and Xbox market now that 360 is here, but the attention that the older market segment would have had, as far as marketing and development resources go, has been curtailed greatly. The media spotlight is now firmly set upon the Xbox 360 and to some degree, PS3 and Revolution, largely because Microsoft saw strategic value in accelerating the cycle.
On the one hand, one could point to the Xbox 360 as part of the reason for the slowdown in the PS2/Xbox market (consumers waiting for the bigger, better deal). On the other, that slowdown might have already been happening and the cycle had been accelerated of its own volition (for evidence, look at the sales velocity of the PS2 hitting major PS1 sales milestones two or three years faster) and the Xbox 360 might be poised to take advantage of it. It's difficult to say whether Xbox caused or simply capitalized on the situation.
But Xbox 360 didn't just materialize out of thin air on November 22. Over the course of 2005, there were a number of announcements and proclamations made. The MTV unveiling just prior to E3 provided the world's first look at the games and the console's design. E3 itself saw the display of the first next generation playable games (albeit still on beta dev kits). Backwards compatibility questions were answered (again, sort of) at E3 and worldwide development support was shown to be fairly strong.
In August, the decision to have a core and premium pack, with disparate pricing was disclosed. Some quarters bristled with outrage that the hard drive wasn't standard given Microsoft's rhetoric for the original Xbox's drive. Others saw value in the flexibility that would be afforded to pricing efforts and the fruit that it could bear in terms of a larger user base.
Tokyo Game Show in September highlighted some of the Japanese support that was coming for the system. Peter Moore's insistence that Microsoft would improve its fortunes in the territory keeps ringing in our ears.
In October, X05 and media events in New York, San Francisco and Toronto gave the media extended hands-on time with a variety of nearly finished first and third party titles, which gave consumers the first valuable insights into what can expect. It was at these events that the true value of the new Xbox Live, Live Arcade and Marketplace became more than just buzzwords in presentations. It became clear that they were the real centerpieces of the Xbox 360 experience.
But when all is said and done, Xbox 360 is here now, sort of.
We say 'sort of' because between the splitting of units for three territories in its 'worldwide' launch effort and the low yields on chips there has been a pretty paltry supply of hardware available. Analysts have estimated that only 400,000 units were shipped at launch in the US. That would make it the lowest day one ship in for a console since the PS1 in 1995. With eBay president and CEO, Meg Whitman claiming that 40,000 Xbox 360s were sold or resold on the auction site (at highly inflated prices), the staggering disparity between supply and demand reaches silly proportions.
Microsoft has promised that weekly shipments are going out to retailers, which may well be true, but they aren't getting from retail distribution centers to store shelves on a weekly basis based upon numerous retail surveys. Gamestop/EB are the only retailer that really has the capability to handle quick turnarounds as far as distribution to a store level but those chains are still just dealing with their bulging pre-order lists. Best Buy is close as far as quick fulfillment goes, but its next shipments allegedly wont' be in until December 18 (nearly a month after launch) if you believe multiple store managers at various locations punching numbers into their computers. So somewhere, there has been a disconnect.
Hopefully, we'll look back at these supply issues in a few months and have a good chuckle, as we have for the supply issues at pretty much every hardware launch.
Although I'm not a fanboy of any kind, using the information above, w/ some added glimpses of what to expect from the 7th Gen's consoles, who do you think will sell the most through the final 6 months of the 6th Generation before the next gen takes over and kicks out most of the current generation from store shelves(PS3 doesn't come out until 2007, but the Revolution comes out in Q3'06(But we don't know when in that quarter) meaning bye-bye most-of-6th Gen when Q3'06 comes around, and if Sony leads it, then it has taken the gold medal this generation, and an unknown future for non-handheld Nintendo, and that means the Revolution becomes Nintendo's only hope of regaining its dominance in the gaming industry)... To answer, don't just state it in a post; vote in the above poll and then post why you chose that answer instead...
I'll vote too... And I'll choose Sony, but not because I'm a Sony supporter when I'm really not, but because I don't think that anybody can catch up to the PS2 at this point in time, not even the GBASP *sighs*...
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