Microsoft, Nintendo and Sony compete for top spot in $30 billion market, writes Jim Colganin New York
As two major players in the world of video games release new consoles in the US, there is more than one battle going on.
There is the ongoing war of the platforms, with Sony, Microsoft and Nintendo fighting it out for the biggest chunk of the $30 billion (€23 billion) market. There's the fight for the next DVD standard, with Sony bundling its format in an effort to stave off Toshiba's rival format.
And then there is the other kind of battle - the one where robbers shot a man in Connecticut as he lined up for a much anticipated PlayStation 3 (PS3); where a boy was left in critical condition after a stabbing at a games shop in Indiana; and where a mob scene took place outside Circuit City in Manhattan after thousands of people braved the elements for almost a week in the hopes of getting their hands on a PS3.
The frenzy at the doors of US retailers comes after years of promotion, press and, in the final days, panic. Production fumbles left Sony with nowhere near the number of PS3 units it needed to meet demand, forcing it to postpone the European launch to March and to offer fewer than 400,000 consoles in the US. These problems come amid low expectations about the company's short-term gains in the market.
Meanwhile, Nintendo satisfied more than twice as many fans when it shipped more than a million units of its new console, the Wii, last Sunday. The Nintendo console will also hit the Irish market on December 8th, just in time for the Christmas rush.
The third player, Microsoft, had a head start when it broke the traditional five-year console lifecycle by releasing its Xbox 360 last year.
But while each device manages to create fanaticism, games experts say they all have unique features which will attract interest during the lucrative Christmas season. "Each console has gone in a slightly different direction," says Peter Rojas, editor of Engadget, a popular blog about consumer electronics.
For Sony, the goal was to appeal to the serious game player looking for the highest specifications. The PS3's microprocessor is the fastest at 3.2 gigahertz. Its upgradeable 20GB hard drive (60GB in the pricier version), ethernet jack and USB ports give it the functions of a PC, as does its ability to store music, photographs and videos. Its BluRay DVD drive plays new high-definition DVDs (at least the ones that aren't made for Toshiba's HD-DVD format). And the higher-end device has built-in wireless internet capability.
But this all comes at a price: $500 for the standard model and $600 for the extra features.
Price is one of the biggest selling points of Nintendo's Wii, which costs $250. But with a low price tag comes similarly low specifications, such as limited graphics capability and few of the PC-like features of the PS3.
One of the defining traits of the Wii, however, is its controller, which some reviewers say approximates virtual reality game playing. The "Wii Remote" has an advanced motion sensor so that players can control the game by waving the remote around. This complements many of the available offerings, such as tennis, golf and truck-driving games.
While Sony's new device also has a motion sensor controller which connects wirelessly to the device, initial reviews suggest Nintendo's is more integral to game-playing and has broader appeal. And it is that broad appeal, Mr Rojas says, that separates Nintendo's console from the others in the field. "I think Nintendo was smart. They've basically created a new category: the casual gaming console."
Other analysts say the Wii's strategy could have a wider impact on the industry. "Optimistically, Nintendo could make this a breakthrough with the Wii and basically widen the market for everybody," says Paul Jackson, an analyst with Forrester Research.
Sony executives say the PS3's high-end features give the console better lasting value than the other consoles, which they say justifies the higher price. Much of the cost is thanks to the high definition capabilities, but the television sets necessary to utilise the feature are expensive - at about $2,000 - and have yet to become widespread. Jackson says Sony has adopted a risky strategy with the PSP.
"For the longer term, Sony is putting a lot of eggs in the PS3 basket," he says.
Exactly how each console maker will fare in the long term is hard to gauge at this stage, with few game titles and not enough units on sale to satisfy demand for the two new devices. But analysts say Sony's rivals are set to gain at that company's expense.
Sony has forecast two million shipments worldwide by the end of the year. This contrasts with a target of four million for the Wii and 10 million for the Xbox 360. It is worth noting, however, that the high Xbox target is partly due to the fact that Microsoft already has a year of sales and games development behind it.
Right now, Sony dominates the industry on the strength of its previous PlayStation models, while Microsoft and Nintendo share second place.
But analysts say the competition will be much closer this time, with Microsoft vying with Sony for the top spot and Nintendo at a near third.
The true test of the new batch of consoles won't take place until there are more units in stock and games developers come out with what insiders call "the console-defining title" such as Halo for the Xbox and Grand Theft Auto for the PlayStation 2.
In the meantime, the market for the new consoles has spread to the internet. Some PS3 units were up for auction on sites like eBay for as much as $4,000. And the thousands who lined up in vain for a PS3 or Wii last weekend will probably have to wait until after the New Year if they want to pay the retail price.
Only then will the consoles' impact on each company's financial outlook be clear.
"The real battle is Christmas season 2007," says Jackson. "This is just the warm-up among the technology zealots."
