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The strategies of Sony, Nintendo and Microsoft became clear this week, but calling the winner of the next-generation console wars remains a matter of guesswork.

At the annual E3 gathering of the video games industry in Los Angeles, Sony had the headline news, revealing the price and final release date of its PlayStation 3, with which it hopes to trounce new consoles from Microsoft and Nintendo.

The PS3 will sell for $499 in the US with a 20-gigabyte hard drive, and for $599 with 60GB. It will be launched on November 17 in the US – a year after Microsoft’s Xbox 360 and at a price-point $100 higher, though the PS3 includes a superior-capacity Blu-ray DVD drive.

“We make no apologies for the PlayStation 3 being the best game system around,” says Phil Harrison, head of Sony’s game studios worldwide, defending the PS3’s position as the most expensive of the three next-generation consoles.

“But it’s more than that – it’s a Blu-ray disk player, it’s a media hub and a network platform, so there are a number of additional benefits that significantly increase the value proposition.”

What is apparent is that there is more to play for in this console-round than just games.

Sony is using the PS3 to boost its chances of winning the DVD format war against Toshiba’s HD-DVD standard, and to link up its consumer electronics products in the digital home. Microsoft is set on aggregating gamers across PCs, mobile phones and consoles through its software to enhance its earnings potential as a digital media company.

Bill Gates, Microsoft chairman, made a surprise appearance at E3 to announce Live Anywhere, which will hook up gamers on Windows Vista PCs, Windows Mobile phones and the Xbox 360.

The cross-platform inter-operability could also see a cross-fertilisation of games that reach new audiences. Advertisers should also be attracted to this consolidated group of gamers, and Microsoft will use its acquisition of the Massive online game advertising network to offer them an integrated service.

Microsoft exuded an air of confidence at E3. It asserted it would have 10m Xbox 360s in the market before its rivals could even launch, 6m users of its Xbox Live online service within a year and 160 next-generation game titles by the end of the year – many of them part of a “second wave” of games richer in graphics and performance as developers become more skilled in the console’s capabilities.

It began its presentation with an eight-minute demonstration of Gears of War, a game analysts believe could outdo Halo, its most successful game franchise, and which will be ready to counter Sony’s PS3 launch in November.

“Sony I’m going to say is overpriced, Nintendo is, for the mainstream, underpowered . . . and we feel like we have hit the sweet spot with the right balance,” says Robbie Bach, head of Microsoft’s Entertainment and Devices division.

“Sony has to compete with Apple, Microsoft and Nintendo and, in the television space, Samsung all at the same time. That makes for a complicated environment for them.”

By contrast, Nintendo is focusing solely on games, and expanding the demographic for its products. It promised at E3 that its console would be cheaper than its rivals and that its games would not emphasise any high-definition capabilities.

Instead, Nintendo focused on its Wii motion-sensing controller and demonstrations of how everyone from children to grandfathers could be drawn to use the stick-shaped interface like a sword or a fishing rod or a conductor’s baton, depending on the game.

Paul Jackson, analyst with Forrester Research, says the Wii could occupy the same position as the current Nintendo GameCube, as a cheaper, second console in the home.

“I’m not sure Sony and Microsoft see Nintendo as a competitor. We suggest the Wii will be in the region of $249 to $299,” he says.

Copyright The Financial Times Limited 2017. All rights reserved.
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