Gates Pegs Nintendo, Not Sony, as Toughest Competition

njkid1 writes "Microsoft's Bill Gates thinks that because of the 'impressive strength' of the company and its new Wii console Nintendo is now Microsoft's biggest competition when it comes to videogames. This is somewhat understandable, given Nintendo's new projections for this year. The Japanese game maker plans to sell an impressive 100 Million DS games this year, along with 21 Million Wii games and some six million consoles. This may seem to be just more flack, to go along with Peter Moore's dismissive comments towards Sony at CES this week, but news of the Halo DS game that almost was puts credence to Microsoft's new priorities."

Comments

*shrug*

[AKAImBatman]

You don't have to be Kreskin to read the writing on the wall.

The plain and simple fact is that the Wii is doing spectacularly well for itself while the PS3 is receiving a slightly less enthusiastic reception. Only an idiot would turn around and say, "Yeah, we think Sony is going to turn things around and kick our asses."

Instead, they're going to fuel the flames by pointing to their indirect competitor over there. Hopefully at the expense of their biggest competition. Then Microsoft will ride the coattails of the Wii's success by repeating the "Wii60 For the Win!" jingle. A large portion of gamers already think they need both consoles, so why not go with it?

Re:*shrug*

[HappySqurriel]

I remember reading a quote on a blog which essentially said "The PS3 and XBox 360 can coexist with the Wii but not with eachother" which I believe is somewhat true; if the Wii sells remarkably well it will impact sales of the XBox 360 and PS3, but its impact will be far smaller than if either of the other systems becomes remarkably popular. Now I suspect that by dismissing the PS3 Microsoft aims to ensure that the populatity of the Wii60 is greater than the popularity of the PSWii.

Intriguing.

[CDarklock]

I've been pretty impressed by what I hear about the Wii, but I wouldn't consider it a bigger threat than Sony. From where I sit, it looks like Nintendo are perfectly content to do lots of business without being the market leaders - but Sony seem very fixated on the "being number one" mentality. I'd be inclined to promote Nintendo's competition factor, but I wouldn't start counting them as a threat (they don't seem to feel any need to eliminate competitors), and I think it's a BIG mistake to count Sony out as a threat.

Of course, this could just be a bluff to drive Sony insane with the idea that they aren't even relevant to us anymore.

Same vs. Different

[QueePWNzor]

The PS3 has the same controls/game style as the XboX, and the XboX is cheaper and more readily availibe. It has almost all the features, too. So I wouldn't think that would be serious competition. The Wii, on the other hand, is so distinct and plain-fun, Microsoft faces losing old-style gamers to the new Wii-style of gaming. I predict Microsoft will get a grip on the button-mashers, but still lose market share because the Wii is, frankly, more fun. It must be embarassing, too. Losing market share to something called the Wii...

Re:Same vs. Different

[MeanderingMind]

The problem here is "will have", for two reasons.

1) "Will have" does not help now. Now, there is no compelling reason to have a PS3 over an Xbox 360.

2) We heard a lot of "will have" promises from Sony over the years leading up to the PS3 launch, many of which were broken. However unlikely strong Japanese support will be for the Xbox 360, there is always the market leader Wii (in Japan anyway) availible. We've already seen developers push back titles on the PS3, it's not impossible that some (even big names) might leave altogether if the PS3 doesn't gain momentum.

That was rather nitpicky of me, but I thought necessary.

Bad assumptions on sony's part

[Lord_Slepnir]

Here is Sony's plan to dominate the Game Console market:

1. Wait for Blu-Ray to plow HD-DVD in this round of 'format wars'.
2. Wait for all of the games to come out that will make people want to pay the extra money for a PS3 vs an XBox.
3. Don't stand where the comet is assumed to strike oil (/salute Scott Adams).

You don't need netcraft to tell you the PS3 is essentially stillborn. Their sales are 50% lower than expected. Right now Microsoft is beating Sony at it's own game (high end console for hardcore gamers) and Nintendo is running unopposed in it's niche (middle-end console for casual gamers).

Re:Bad assumptions on sony's part

[ivan256]

Oh how quickly people forget. Remember the 360 launch? It sucked. Hard. The sales pace made the PS3 look like a champ.

Am I saying this means Sony is going to win? No. But it is way too early to call this. What I will say though, is that if Microsoft writes off Sony at this point, Sony is going to eat their lunch and Microsoft will end up in third place again. Sony has far too much in terms of resources to be written off this early in the game. Microsoft isn't used to playing with people its own size.

Wait a year, then we'll have a reasonable idea of who might win.

Also, I think your point #1 is wrong. The PS3 is supposed to be what plows HD-DVD into the ground. They're not counting on Blu-Ray to make the PS3 successful. It's the other way around. Blu-Ray can fail without the PS3 failing.

Re:Bad assumptions on sony's part

[sehryan]

"Blu-Ray can fail without the PS3 failing."

Sort of, but it would be a huge blow to the PS3. Sony was counting on the PS3 to drive Blu-Ray into homes. Incorporating Blu-Ray into the PS3 was the primary reason Sony was having in getting their product to market. Blu-Ray is one of the primary reasons the PS3 costs $600 instead of something more competitive, or, it is the primary reason Sony is losing money on every PS3.

If Blu-Ray fails, it will be because of a lack of market penetration. And if Blu-Ray doesn't have a large user base, then that directly correlates to the PS3 not having a large user base.

Re:Bad assumptions on sony's part

[jstomel]

Actually, Sony's strategy is fairly clever. I'm not sure it will work, but it is clever. The way I see it is thus:
1)Microsoft gives you the option of adding on HD-DVD for more money. Most people are probably fine paying less and not getting HD. Soney doesn't give you that option. You want a PS3? You get a BR player.
2)Since they have one anyway (wanted or not) PS3 owners buy BR disks rather than conventional DVDs (after all, they paid for it, why not use it).
3)Forced early adoption of BR by gamers raises BR disk sales relative to DVD and HD. DVD distro companies notice this and release their stocks on BR to catch the wave.
4)Once all the major MP lables are releasing on BR (wheather they are also releasing on HD or not) Soney can de facto win the forman war simply by refusing to offer BMG movies on HD. Why would anyone buy an HD player when 25% of the movies out there will never be released on it?
5)The HD movie adopters (videophiles) buy BR, and since the PS3 is as cheap as any BR player, why not get a PS3 and have the extra functionality?
6)PS3 sales boost, drawing in more exclusive games.
Of course, all of this depends on sony selling enough PS3s in the early market to influence BR disk sales significantly. Early indicators are that they are not succeeding at this, but time will tell.

Re:Bad assumptions on sony's part

[Vellmont]

Oh how quickly people forget. Remember the 360 launch? It sucked. Hard. The sales pace made the PS3 look like a champ.

I don't know anything about the 360 launch, but there's a big difference between now and a year ago. A year ago the 360 was the only next-gen console on the market. Not having a great launch didn't matter as much since what are the people hungering for a new console going to do? They either already own the PS2, or have a XBox. In short, Microsoft doesn't lose much from a poor launch.

A year later and a PS3 launch failure hurts Sony a LOT more. Why? Because all three consoles next-gen consoles are now out, so Sony has more competition to worry about. Can't get/afford a PS3? Well the XBOX 360 is available, a good replacement for the PS3 (with the promise of a second generation of games coming out for it too). Or maybe you have the XBox and are looking for something new.. well, the Wii is real cheap, and it's fun and different than the XBox.

But it is way too early to call this. What I will say though, is that if Microsoft writes off Sony at this point, Sony is going to eat their lunch and Microsoft will end up in third place again.

Sure, maybe Sony will perform some miracle comeback and sweep the competition. But if this were a baseball game, the score would be 5-0 in the bottom of the second inning. Unless Microsoft really screws up, it's looking like Sony is going to lose this game.

I also wouldn't take what Bill Gates says to the press as a reflection of what he believes. If you were him, wouldn't you try to say Sony has already lost (and hopefully discourage people from buying PS3s)?

Re:Bad assumptions on sony's part

[MeanderingMind]

You are right that it is way too early to call this, I think a lot of people forget that however poorly things are going for Sony now, they can recover and still give a strong showing this generation.

However, the Xbox360 launch had several characteristics I think are important to note.

1) Preorders were not filled out until Spring. It was completely impossible to get an Xbox360 from an actual store even into March.
2) There were many PS3/Revolution hold outs at the time, who put off buying a 360 assuming that the PS3 would be significantly and undeniably better in every way, or that the Revolution would simply be amazing. There was a spike in 360 sales during the summer following E3.

Regardless, the Xbox 360 launch was bumpy, but it had the grace that there was no competition to capitalize on the blunders. This is not true now, and will make the ordeal harder (but not impossible) for Sony.

Good one Bill

[winningham.2]

Thats great Bill, but tell us something Wii didn't know.

Like others have already said

[Pojut]

Japan plays a large part in whether a system becomes successfull or not...

1. Nintendo has (for the most part) enjoyed good success in japan
2. The DS and DS lite are a legal drug in japan
3. The original Xbox did bad in japan, and one couldn't reasonably expect the 360 to do differently there
4. The 360 definately has an american "feel" to it, if you know what I mean. I don't mean it's cheap or anything, what I mean is by the way the console itself looks and controls, and by the way the interface looks and controls, and by the FEELING of the games...I dunno, it just seems more like a console that is aimed at american gamers moreso than anyone else.
5. Microsoft is an american company, and it's no secret that american culture is both loved and hated in japan.
6. Nintendo is japanese in it's origins...kinda like buying a book from a local mom-and-pop rather than amazon.

various other reasons as well...keep in mind these are only my opinions and from what I have seen...I've been gaming since the commodore 64 days, so I figure my opinion has to have at least SOME kind of value, right? Or not...whatever. Suffice it to say, these are my opinions and nothing more. Dissect them to your heart's content.

Re:Like others have already said

[Jesterboy]

I don't get where this perceived foreign discrimination in Japanese buying habbits comes from. Having spent a lot of time in Japan, I can tell you that it's patently not the case. Furthermore, it often operates in the opposite direction: Japanese consumers find American products cooler than Japanese ones, when they're practical. You'll see more iPods than any other music player nowadays, there's Coca-cola in every vending machine, and you'd be hard pressed to find a McDonald's that isn't packed during mealtimes.

A case that is always trotted out is American cars; why don't the Japanese buy them? It's pretty simple, really: they are not feasible in Japan. Have you ever been on a street in a major area of Tokyo? Except for major thoroughfares, most roads are a single lane, with a small green strip marked for pedestrians; these single lanes are only a bit bigger than half a lane on a standard American side street. It doesn't matter if America is making the best cars in the world; if it doesn't fit on the road, it's worthless. Something people usually ignore is the sales of other foreign auto manufacturers in Japan; you won't have any trouble at all finding a Mercedes Benz, a Volkswagen, a Volvo, a BWM, or a Mini in Japan. It's a hard pill to swallow, but it's true: our product is inferior; it ignores the conditions of the market.

Another case is the XBox; it had a fundamental design flaw in that there was no battery to maintain clock time, so if there was a power outtage or it was unplugged, it lost it's date/time settings. Not a big deal, right? Who unplugs their consoles when they're not in use? The Japanese do: they do this with most appliances to save electricity, and usually store video game consoles away when they're not being played. What seems to be a small issue suddenly becomes incredibly frustrating; how would you like it if everytime you want to play a game, an "Enter the date and time" screen pops up?

If American companies are going to become internationally viable, they have to get over this idea that we're the only ones in the world. We need to continue to innovate, even if we are already the leader in a field. We need to be more culturally understanding of other nations, and not try to force our mindset on them just because it works for us. Actually, maybe our overall foreign policy should incroporate these ideas too. ^_^

Re:"This year"?

[Total_Wimp]

Did I miss something? How did DS game sales and comments about the Wii end up in the same write-up? Did Microsoft start planning on producing a handheld while I was hiding under a rock or is there some other Microsoft vs. DS competition I'm missing?

As far as the Wii is concerned, I think Bill has less to worry about than he's letting on. The two are practically in a different market. The big draws of the 360 are visually impressive games, High Definition and media center functionality, none of which are big selling points of the Wii. On the other hand, people interested only in the unique controller and game lineup on the Wii wouldn't give the 360 any serious thought.

Nintendo's spent quite a bit of energy trying to distance itself from direct competition with Microsoft and Sony. In my opinion, they've succeeded. The only competition that's really there is whether you like the Sony/Microsoft style of gaming or the Wii's.

SUVs don't compete with sports cars. People just chose which they'd rather have and then go choose from the available SUVs or the available sports cars. Nintendo is in the enviable position of having lots and lots of people chose their style, but as it turns out, they're the only company offering it.

TW

Re: 360 not relevant... in Japan.

[trdrstv]

How is the 360 not relevant? It's got a solid installed base, a lot of great games, strong sales, and a great upcoming lineup. If you think Microsoft is somehow out of the fight, you're either A) a fanboy B) hopelessly misinformed or C) being disingenuous.

or D) Refering to the Japanese market.

Ok, just for the record I'm a Wii60 owner and currently on Gears of War - Act 2, on Insane. I love the 360 and LIVE in particular.

However the 360 has done shit for business in Japan. Nintendo sold more Wii's on Launch day than the 360 sold (in Japan) to date. (400,000 units vs 280,000). I honestly don't know the problem and why Microsoft can't sell to the Japanese, but 2 X-boxes later they still don't understand the market.

360 and Wii don't compete

[ConfusedSelfHating]

The Xbox 360 and the Wii have completely different paradigms. The Xbox 360 is about ultra realistic graphics, fast paced driving and brutal violence in which strangers are humiliated through Xbox Live. The Wii is about fun games that often can involve friends and family. One is not better than the other, they are simply very different. Which is better: a car or a sheep? On the other hand, the PS3 and Xbox 360 are trying to fill the same purpose. Unless you feel the SIXAXIS feature of the PS3 is equivalent to the Wiimote's functionality.

Sony thought the console market was theirs. They believed they owned it. They felt that they could abuse the loyalty of the gamer market by winning the high definition video disc market on the backs of their customers. They think that the average Sony customer will work their fingers to the bone to buy their console at its outrageous price. Remember, the PS2 started at a price of $300. Since the PS3 is $600, will the PS4 be $900 or $1200? Oddly enough, in the upper middle class area in which I live, the PS3s are not flying off the shelves.

Gates is good at marketing and sales

[WillAffleckUW]

and he apparently has noticed that while he was fighting head-to-head with Sony's PS3, Nintendo's Wii embraced and extended themselves and created a new battlefield - old people, women, and girls - while also winning over most of the "market" of 13-35 year old males traditionally thought of as the focus.

That plus the Nintendo Wii is selling way more consoles and games in Japan, according to an article I just read in the New York Times in the tech section.

Re:"This year"?

[MeanderingMind]

The Wii is a competitor for both the PS3 and the Xbox 360, and here's why.

1) Developers - Game studios only have so many resources to devote to game developement. Any that are spent on the Wii are not spent on the PS3 and Xbox 360, even if it is just a port. The cumulative effect of this is less developement for the Xbox 360 and PS3.

2) Follow the Leader - If the Wii gains a significant lead on the other consoles in market share, this will further compound #1 due to the "Follow the Leader" syndrome for game developement. While a lot of games for the PS1 and PS2 were very crappy, having that kind of third party support is any console manufacturer's dream. Stealing that dream hurts the PS3 and Xbox 360.

3) Hardcore - Even though the Wii and DS have been designed to be friendlier systems, there is definately a strong appeal for many hardcore gamers. While hardcore gamers often spend much more money on video games and are thus very likely to own multiple systems, having any portion of said funds diverted to the Wii places it in competition.

4) Casual Understanding - The nerdy, informed, and hardcore may know all about Nintendo's "Blue Ocean" strategy, but more people only know it's a game system, and so are the PS3 and Xbox 360. They aren't aware Nintendo is in a different market, because for them there is only one market.

5) Next Time Gadget - There will be another console generation, and it's pretty clear that barring unthinkable and unpredictable disasters Nintendo will be there. As much as they are competing for a place in this console generation, all of the big three are competing for pole position in the next generation. While not determinate, being the incumbent from the last generation is a significant advantage.

This is not to say that they are truly in direct competition. A better analogy is to say that Nintendo is targeting an entire pie, while Sony and Microsoft are aimed at a smaller piece. To an extent there is conflict, but Nintendo will be just as happy to have the 50-60% of the pie that Microsoft and Sony are only barely interested in.