War of the Consoles - Price Vs Graphic Quality

Peter Nowak, Financial PostPublished: Saturday, March 10, 2007

If there’s one thing the current generation of video game consoles can tell us, it’s that the next generation of games that kids will be playing will be very different. The coming wave -- perhaps five years or more away -- isn’t going to be about nicer graphics; it’s going to be about price and innovation.

Larry Probst, chief executive of the world’s largest video game publisher Electronic Arts, this week predicted Sony’s command of the market is going to slide over the current generation of hardware. Sony won the last round with its PlayStation 2, which accounted for about 60% of the console market, followed by Microsoft with its Xbox and Nintendo with its GameCube.
Sony’s momentum should carry it through the current round with its PlayStation 3, released in November, but it should be a much more level playing field this time around, Mr. Probst says.

That’s because the PS3 is just too expensive compared to its rivals. At $699, the console goes for a considerable premium over Microsoft’s Xbox 360 at $499 and Nintendo’s Wii at $279. Sony has packed a lot of expensive hardware into the console to provide the best graphics on the market, not to mention a Blu-Ray high-definition DVD player, but the success of Microsoft and the Wii indicate gamers want more than games that simply look awesome.

Prior to 2001, Microsoft wasn’t even a player in video game consoles. But with the launch of the Xbox that year, it was obvious the software company wanted to take gaming in a new direction. The Xbox had a hard drive for storage and a built-in broadband connection, both of which enabled the Xbox Live online service. Suddenly, gamers could play against each other online or download updates and expansions to games straight to the console.

The Xbox Live service, which was continued when the 360 launched in November, 2005, has been a tremendous success for Microsoft. The company this week announced it had surpassed six million subscribers, four months ahead of its original forecast.

If anything, the Xbox and the 360 have proven gamers have a real zest for online gameplay. Sony, meanwhile, was caught napping and has been playing catch-up ever since.
Nintendo, which was in Sony’s commanding position in the 1980s and much of the 1990s, went back to the drawing board and came up with a profoundly innovative product. The Wii shuns dazzling graphics in favour of a one-handed motion-sensitive controller that players can wave like a wand or swing like a tennis racket. The console has flown off the shelves and has opened up a world of possibilities in game design. It doesn’t hurt that the Wii is the most attractively priced of the three consoles.

A year ago, Nintendo was being written off as yesterday’s news in the video game console wars, but the company is now firmly back in the thick of things. With Microsoft carving out its online niche with hard-core gamers and Nintendo appealling to casual players, Sony is going to have to go back to the drawing board and figure out where its market is. It’s not beyond the company to do so -- after all, Sony did revolutionize the business with its original PlayStation, which, back in 1994, could play CDs and had vibrating controllers.

But needless to say, the days of steady improvements to graphics for an everhigher price tag are over. The games of tomorrow are going to be something else indeed.