The 360's Position in the Next-Gen War

An anonymous reader wrote to mention a great article on the Elite Bastards site looking at the Xbox 360's positioning in the next-gen market. In the first of a three part article series, the author looks at the lessons Microsoft learned from its first hardware outing, and what he feels the company's strategy will be in the near future. From the article: "Clearly my impression of the Xbox 360 is that it is positioned to compete significantly better in the next gen console race than its predecessor. The difference this time around is that although Microsoft will no longer have the decidedly most powerful console, they also won't have the most expensive console, and believe me, they will compete on price. The Xbox 360s media (DVD) and input device (gamepad) are safe choices and the CPU may be merely adequate, but the GPU is quite potent and should go far in keeping Microsoft's box in the same league as Sony's overall despite the disparity in time to market."

Comments

My Take

[American AC in Paris]

I'm gonna go out on a limb and say that the XBox 360 is in for a rough future.

The Launch: Microsoft did a decent job hyping the system, but the launch was, on balance, weak. You had your brief hysteria of $5,000 systems on eBay, but it died down fairly quickly. You had serious supply issues--to the point where it hurt more than helped. You had the whole power supply issue. You had decent games, but no "killer title" that made you want to go out and get it.

Today: The games are still pretty pedestrian--the operative word is "prettier", which will only get you so far. Now that the insanity of the launch period has passed, there isn't much about the XBox 360 that appeals to the average consumer--it's expensive, it has decent games but nothing "must-have", and finally, it's expensive. $350 for the system and $50-60 games is simply too expensive for the casual gamer.

Tomorrow: As Thanksgiving approaches, I'm willing to bet that the 360 hits hard times. Unless they can come up with a bigger hit than Halo, all the chatter is going to be about the Revolution. Nintendo is going to have the luxury of not needing killer games at launch; the new user interface alone will likely drive sales, and if they can put out a few decent games that take advantage of this, they'll be set.

Basically, to your average consumer, there's little reason to get an XBox 360 right now. It's a big enough investment that most people won't consider it as an impulse buy, and it's enough like the last generation of consoles that it won't generate enough interest--again, this is unless they can get a truly must-have game out before, say, September.

The 360's position in the next-gen war is that of the gung-ho kid who vaults out of the trench and bursts ahead of the rest of the charge: he's out front right now and will bask in glory if he can survive--but he's also the first target to come in range.

Or, from another angle: Sony and Microsoft are working hard to field the finest cavalry regiments ever seen on a field of battle. Nintendo is working hard on building a tank.

Re:My Take

[AuMatar]

Revolution is going to come in around 200.

And I don't remember ANY SNES/Genesis games costing over $60. The vast majority released at $50.

Re:My Take

[TubeSteak]

Nintendo is also hoping to pull in Girls with the new interface.

I think they have a very strong opportunity to expand the number of females who are buying and regularly playing console games.

Nintendo needs something like The Sims or some female friendly game that makes good use of the innovative controller. Reaching out to women is how they can really blow-out the X-Box.

Re:My Take

[American AC in Paris]

What new systems are going to sell below that on launch?

NES: $199 ($353)
SMS: $199 ($340)

SNES: $199 ($280)
Genesis: $249 ($388)

Saturn: $399 ($496)
PS1: $299 ($372)
N64: $199 ($241)

DC: $199 ($230)

PS2: $299 ($332)
XBox: $299 ($324)
GC: $199 ($299)

First number is launch price, second is launch price adjusted for inflation (USD in 2005). "Winner" in bold.

The XBox 360 comes in at the high end, price-wise; the "real" system launched at $399, which means that only the Sega Saturn was more expensive at launch, in adjusted dollars.

What this does not show is the relative technological leap between console generations. The leap between the current next-gen and their predecessors is much, much narrower than was the leap between earlier iterations. You don't look at side-by-side screenshots of XBox and XBox 360 games and go, "Holy shit, that's amazing!" like you did when you first saw the SNES...

And I seem to remember paying upwards of $75 for Sega Genesis games, I don't think $50 or $60 is unreasonable.

As I recall, $75 games were the exception, not the rule. Remember, too, that Nintendo won that round--and I'm reasonably certain that their games tended to be less expensive than Sega's games.

Re:My Take

[aardvarkjoe]

And I don't remember ANY SNES/Genesis games costing over $60. The vast majority released at $50.

Well, to be fair, due to inflation, $50 in the SNES era is worth about the same as $60 today, perhaps a little more. So by that measure, the prices haven't really changed. You would do better to compare them to previous-generation games (most of those started at $50, too, so the price goes up by $10.)

I suspect that those who were willing to pay $50 for the latest games a year ago will be willing to pay $60 now. Those of us who are more money-conscious aren't paying fifty dollars for a game anyway; we wait a year for them to drop to twenty.

Re:My Take

[American AC in Paris]

Fanboy? Until I got a DS--my only piece of Nintendo hardware--I hadn't purchased anything from Nintendo since the SNES. I've been a PlayStation man for close to a decade now.

The simple truth here is that of the three major console producers, only one of them seems poised to do something beyond "what we did last time plus five years". It is my honest opinion that Nintendo will come out on top this round because they're willing to take a sizeable risk, while the other two are playing it safe--and "safe" isn't going to be exciting enough to justify the historically high price tags.

What they conveniently overlook is Nintendo's lack of HD support is going to be awful for them.

I think you are vastly overestimating the importance of HD to the average consumer. The people who really care about HD have already purchased their XBox 360. Remember that many, many people still jack their current-gen systems in with a freakin' coax line, despite the availability of composite and S-Video on the TV they already own..

Then again, perhaps I expect too much from an individual who posts:

"Even if they don't have such a TV, families will walk into the store next Christmas season and see PS3, X-Box, and Nintendo screens side by side in demo areas, and next to the other two, the Nintendo will look like something from a 1980s arcade machine."

"the Revolution will have.... what? A "para para" game to take advantage of the new interface, and maybe a puppy simulator? Wow. That will still be dazzling people ten months from now, eh?" (emphasis mine)

Which of the two of us has a bone to pick, here?

Re:My Take

[archen]

Not just girls but everyone who isn't your conventional "gamer" demographic. The PS2 seems to have attained the widest audience just because it managed to be sitting as the fat cat at the top the longest and has the largest library. The Xbox seems to be targeting college age males extensively. Then MS seems to go after the same target audience again with the 360. I doubt Sony really has much of a comprehensive plan on a target market aside from throw out as much hype as possible and try to dazzle everyone you can.

Sony and MS seem to be missing the really big picture here, and that's that there is a HUGE untapped market that's going to be emergeing - everyone ELSE. My wife likes to play various games, but is quite dismayed at the fact that very very little seems to appeal to females at all. When you're talking about kids, family-oriented stuff, WOMEN, and possibly other segmants not considered - that adds up to a huge potential MS has already over-looked, and Sony will probably gloss over as well.

Re:My Take

[vux984]

Not a lot of people are using HD sets yet but most of the new ones being sold are HD systems.

Its an interesting gamble by Nintendo. But, although marketshare dynamics are important, they didn't only consider the marketshare of HD.

HD is a performance drain.

HD textures require lots of memory, HD video requires lots of disk space, HD rendering is like quadruple the number of pixels that have to be computed.

That has several side effects - it raises the cost of the hardware, as you need more memory, faster gpus, etc - as well as imposes longer level load times and other annoyances.

And they predict that most people won't even benefit from it - at least during the lifecycle of this generation of consoles.

Even if they don't have such a TV, families will walk into the store next Christmas season and see PS3, X-Box, and Nintendo screens side by side in demo areas, and next to the other two, the Nintendo will look like something from a 1980s arcade machine.

Hardly. At the local Electrnics boutiques, BestBuys, Future Shops, and Circuit Cities these "demo screens" are mounted into mini 'arcade' stands between game racks and tend to be a whopping 15" sdtv, so any "hd-ness" will be invisible.

Sure there is usually a 40"+ plasma with a console hooked up to it for some feature game from the console with the highest margin, but that isn't putting the 3 systems 'side-by-side'. But even there the revolution will support 480p (progressive scan), and so there is no reason it can't look as good as DVD, which stands up quite well as compared to hdtv. (Indeed I have DVDs that look better than much of the 'hdtv' that comes in over the air - due to compression.

So what families will really see when they walk in at Christmas is that the Nintendo is almost half the price (meaning they can get their kid something in addition to the Nintendo that year). And that 'half price'-ness comes in significant part because they skipped HD this go around.

I'm not sure if it was the "right" move. Only time will tell, but its nothing like the ridiculous 1980's arcade game comparison you portray. Its DVD quality picture at half the price of xbox360.

Meanwhile, the 360 will have a year's worth of new games to show off, the PS3 will have its usual stable of Sony exclusives, and the Revolution will have.... what?

Precisely. The Revolution has the potential to give us something truly new. We don't know *what* the games are going to be and that's half the point. Though of course we can expect representation from their iconic franchises -- mario, zelda, metroid, etc.

The gaming market is now big enough to handle three major players. Probably more.

The market maybe, store shelves, not so much.

There's only room for "one winner" at the retailers... one will be up front, featured on the big plasma, with a good selection of games prominently displayed and the others will be available but comparatively marginalized to varying degrees, with less shelf space and less game and accessory selection.

All three consoles are probably going to end up making lots and lots of money.

Microsoft will have to stop losing money on the xbox before I'll buy into 'making lots and lots' of it.

The only people who care about a "winner" between the three consoles are drooling fanboys of one platform or another.

Agreed.

Re:My Take

[Capt Xano]

The Launch: Microsoft did a decent job hyping the system, but the launch was, on balance, weak. You had your brief hysteria of $5,000 systems on eBay, but it died down fairly quickly. You had serious supply issues--to the point where it hurt more than helped. You had the whole power supply issue. You had decent games, but no "killer title" that made you want to go out and get it.

Today: The games are still pretty pedestrian--the operative word is "prettier", which will only get you so far. Now that the insanity of the launch period has passed, there isn't much about the XBox 360 that appeals to the average consumer--it's expensive, it has decent games but nothing "must-have", and finally, it's expensive. $350 for the system and $50-60 games is simply too expensive for the casual gamer.

Assuming this is all true, it makes the XBox 360 no different from virtually any game system that has ever launched: supply problems, too expensive for the "average consumer" (whatever that means, though I guess that means only "above average" consumers were waiting in line to buy them), not enough quality games, some defective units, etc. And as it was for the PS2, it will be no different for the PS3, except by then M$ will drop the price and throw down the latest iteration of Halo. Not a bad place to be in while Sony and/or Nintendo are dealing with the issues Xbox has already moved past.

As for the Revolution. Betting on a "user interface" as you put it seems quite the risk. I can't imagine 13 year old children begging their parents to buy a Revolution so they can try that fancy new "user interface." We can only hope it fares better than the Power Glove.

So far, going no better in Japan

[ChrisRijk]

Xbox 360 is going nowhere fast in Japan. Worse than original Xbox actually. Latest weekly sales available (*) show just 1288 units being sold (estimated) - even the Game Cube is still selling more. Of course, there's still the rest of the world, but one of Microsoft's objectives with Xbox 360 was to succeed in Japan. Looks to be a distant dream right now.

(*) See bottom of: http://www.m-create.com/jpn/s_ranking.html

Re:So far, going no better in Japan

[jchenx]

Of course the 360 is going nowhere in Japan at the moment! There aren't any RPGs for the platform, for crying out loud. DOA 4 alone isn't going to bring over Japanese gamers.

But there are several Japanese RPGs in development, most notably those by Mistwalker Studios (headed by a former Square-Enix producer). I think the 360 in Japan is really going to depend on the quality of these first games. If they aren't that that good, then yeah, the 360 in Japan is going to continue to flounder. But, if they turn out to be pretty decent, then I would imagine the 360 is going to do better. Also, we still have to see what Square-Enix decides to do with the platform. Somehow I doubt FFXI is going to be the only game released for the 360.

That said, I've looked at the previews for one of the first Japanese RPGs (Enchant Arm), and it doesn't look that hot to me. I'm a big fan of Japanese RPGs (most Squeenix titles, Xenosaga, Disgaea, etc.), so I guess I'm a target audience.

Yeah, here's why I think they're positioned better

[Richthofen80]

Clearly my impression of the Xbox 360 is that it is positioned to compete significantly better in the next gen console

Could that be because the Xbox360 actually exists, and isn't just an idea. Does PS3 even have a launch date yet? People keep saying this and that about PS3, but Microsoft actually anticipated their existing product's shelf life accurately, and planned for it. I have been dying for some of the stuff the xbox 360 does, like HD gaming, a consistent online experience, and OEM wireless that comes with the system. Sure, xbox has issues, namely a lot of bugs made it through. But since I'm online they're patched pretty quickly and things are working out pretty well.

I'll take HD gaming now versus something that doesn't have a launch date yet.

I think more of this depends on Sony...

[Siguy]

I own a 360. I like the console a lot. There's definitely a dearth of good games right now, but there are at least two that I really want coming out next week, and I did really enjoy some of the ones I got at launch.

Having said that, I think your opinion of what's going to happen in this console race depends on your opinion of Sony. If you think they're gonna have a great launch with tons of titles lined up and in great shape and lots of available consoles and on time this year, then you have to think they're gonna cream Microsoft's anemic launch. If you think Sony is gonna be in the same boat as the 360 with even more complicated components and an even tighter release schedule that might get pushed back, then you probably think it'll be a pretty even battle with maybe a slight edge going either way.

Personally, my bet is that Sony runs into the same problems Microsoft did. I think they sell more consoles, but by then the 360 has a decent amount of games and it's a fairly even race for a year or two till the 360 fades about 6 months earlier than the PS3 does. Then we get the next next gen, and so on, and so on.

That CD rootkit is going to bite Sony

[Jason1729]

The target audience for the PS3 is the same people who buy lots of CDs, and were most affected by the rootkit.

Since the rootkit got so much attention, victims will remember it when the PS3 comes out.

Early Launch

[Silence86]

The XBox 360 is doing well now. This is unsurprising, as it has no competition at the given moment. The true test for Microsoft and the 360 will be its staying power and ability to compete against the more-powerful, better-backed playstation. Because it had a headstart, the 360 made a good bit of money due to the cool-factor of being the first next-gen console. But the question we have to ask ourselves is "will these graphics even be on par in 3 years?". The answer to that, probably not. I know that as the developers get a feel for the platform the graphics will improve, but they can't outreach the limits of the hardware itself, which frankly are mediocre. When the Playstation relases, I predict that it will have slighly less "burst" profitability, but will have much greater staying power. Sony has traditionally had better backing from game developers, and I don't really see that changing. I was a proud owner of all three consoles of the previous generation. Most of the games I bought for XBox were on other systems as well. I bought them for XBox because it was the most powerful. Now I'll buy them for Playstation because it'll be the most powerful. Gameplay is important, but if you can get the same game on two different consoles, which would you choose. Most people would choose the one with more power.

The games make the console

[RodgerTheGreat]

Whatever console has the best games will come out on top. Hardware alone will not win this war.

Personally, I hope that the new power of Next-gen consoles will let game developers explore new ideas in games, an area mostly limited to PCs due to processing power and licensing issues, such as the groundbreaking Garry's Mod, a physics-based sandbox in which you can build mechanical contraptions, vehicles, etc, and make them really work. Hopefully the revamped systems should give game makers room to forge new genres.

Re:Who are they kidding?

[RiotXIX]

Warning: personal rant.

As much as that sounds like a troll, I'd have to agree with you. I use to be a loyal follower of Sony - basically for no other reason than I figured that they made superior products, and you'd pay a bit more for them but it was worth it. But two things have annoyed me significantly to arrange my own little boycott (and I know this is true for many others):

Sony BMG.
the whole rootkit fiasco

Sony Hardware
-but more significantly, they make disposable crap. My minidisc player just died because of the blankdisc error - an inevitable ribbon cable snap (which everyone will require eventually) due to opening/closing 'too many times'. An almost $400 'walkman' inevitably requiring a $100 fixed rate repair a few years later. The new mp3 walkman don't have backlit screens (what happens at night?), and they're bigger than cheaper 3rd party ones.

Linux:
Their hardware is unlikely to ever support my os, because (perhaps because they're a giant popular corporation) they like to keep it all closed up.

They definitely aren't the company I perceived them as (many are realising this) - I hope they get what they deserve for treating consumers like dirt. But they'll still rule the hardware market I figure (because of history, and the perception than paying more means better products).

Development Tools

[mrm677]

Talk to game developers and many/most will say that Microsoft has better developer tools, documentation, and assistance.

The awful truth

[Y-Crate]

It's far too early to tell how this generation is going to pan out. That won't generate traffic to any gaming sites, so they have to go off into the realm of mindless conjecture.

So far, the PS3 has been nothing but a smoke and mirrors show. The reason being, Sony needed to do something to blunt the 360 announcement long before the PS3 hardware was ready, so they sent the FUD machine into overdrive and spat out the same drivel they did when trying to kill off the Dreamcast. Not surprisingly, people lapped it right up, despite the previews being little more than mockups and "real time demos" rendered at 1FPS prior to the show and sped up. I'm not saying the PS3 is going to be a disappointment, nor am I saying that it will be comparable to, or lightyears beyond the 360 or Revolution. We simply know far too little substantive information about its capabilities and exactly what its game library will look like.

The Revolution was being heralded as the only good console of this generation - even before there was a single feature announced. Other than the controller and the back-catalog being rereleased for it, we have seen nothing of what it can do or what it will bring to the table.

Let's have this conversation in a few months, after E3.

Get realistic...

[7Prime]

Oh come on, I've heard this arguement more than a few times, only from slashdot. But the other 98% of the population doesn't even know what a "rootkit" is. And "so much attention" is only relative. It got quite a bit of attention on tech sites, but if it wasn't on NBC Nightly News or on the front of a section of the NY Times, it won't even make a dent in sales. I would say, even if it DID make headline news, you might see a 1% sales drop. Most people use consoles for playing games, not viewing media, anyway, most of what Joe Sumer will be hooked with is fancy graphics, a lot of buzz, and news of must-have games. I have little doubt that Sony will be able to deliver those three things just fine, as it did on their last two releases. So no, the rootkit issues is not going to bite Sony.

View from a disinterested observer

[jmorris42]

Having not bothered with any console since the Atari2600, here is how I view the landscape.

Xbox 360

Pro: Out first, never discount the advantage of getting on shelves first.
Fairly solid design, nothing too daring.
Massive marketing push

Con: Fairly solid design, nothing too daring.
Early mover advantage all but negated by supply issues, Xmas '05 was a bust.
Only a DVD Drive

PS3

Pro: Backward compatibility with PS2 and PS1.
Proven ability to churn out titles appealing to key 16-24yo male demographic.
BlueRay, especially if it wins in the broader next gen DVD war.

Con: Late arrival

???: Cell. If it can be harnessed it will be a major plus, otherwise another Itanic fiasco.

Revolution

Pro: Widest range of software covering the most catagories.

Con: From teh prelim info available it appears to be woefully underpowered.

???: New input system is a total wildcard much like Cell.

I'd say Nintendo will survive this round simply because it will mostly be fighting for ground not coveted by the other two contenders. If the new input system permits new catagories of gaming the others can't port it could gain major ground.

However there really isn't room for both Xbox and the Playstation since they both target the same demographic and neither is likely to be able to slide into the media center/tivo market with their current generation hardware.

If Xbox suffers another lackluster second place finish to Sony it will be hard to convince the instituitional investors who hold vast quantities of Microsoft stock in pension plans to piss away billions more on a third try. Sony on the other hand can probably afford to lose a round and come back with another try so while the pressure is on Sony to deliver a knockout and end the war they probably can better survive a loss while for Microsoft it is probably "win or go home" time. Expect them to realize that and play for keeps, slashing prices at the first hint of erosion in sales, knowing this brief period before PS3 & Revolution launch is their best opportunity to lock in customers.

My opinion on the Xbox 360

[krunoce]

I purchased one, and the 2 games I have are pretty fun(PGR3 & Call of Duty 2), but not addicting. 99% of the time I use my xbox 360 is for DVD playing.

I was expecting to have more titles available, and it sucks to see long periods of time seperating release dates for the new games. Actually, the only game I'm looking forward to is Burnout that comes out in March. Sure you can play old Xbox games, but I want to play games in full HD.

For MS's sake they should put out more titles soon, because the PS3 will dominate if the Xbox 360 game selection still sucks like it does now.

Now that I think of it, the cause for this bad game selection is probably because of all the nonsense that companies require to make modern games. I mean shit, a symphony orchestra is needed for the sounds. Maybe if the SDK/MS licensing was cheaper, developers that aren't as rich as EA can afford to make/sell games too.

::Dusts off NES and Mario 3::