We’ve looked quite a lot at the tremendous success Nintendo is enjoying right now on the back of their decision to court mass market “casual” players, using techniques that leave me struggling to resist saying “I told you so” when I examine the situation. What I haven’t looked at recently is the other side of the marketplace battle – the struggle between Sony and Microsoft for the hearts and minds of the hardcore players.
Now I don’t want to suggest that Nintendo have given up or abandoned the hardcore audience – they are still supporting their popular franchises like Zelda and Super Smash Brothers that don’t really have mass market appeal, but it takes time for Nintendo to produce these games, and even the Nintendo zealots need other games to keep them busy between fixes, which means you need another console on the side. (With hardcore players and Nintendo, either you’ve been sucked in and accept that you will have to have a Nintendo console alongside whatever else you decide to buy, or you hate Nintendo and would never consider buying their machines. There doesn’t seem to be much middle ground). The net result is that the market war for hardcore loyalty is essentially a two company race between Sony and Microsoft.
Sony came into this round of the console wars with a huge advantage – a record-breaking 140 million PS2s sold, versus a paltry 24 million units of Microsoft’s freshman green-and-black brick. Unfortunately, this commanding lead gave way to hubris, and Sony’s insistence that they were untouchable helped drive a mass exodus from Sony fandom in favour of Microsoft’s shiny new console. The collapse of the culture of console exclusives, typified by Capcom's shareholder report statement earlier this year (“All major titles launched during the next fiscal year or thereafter will be developed as multi-platform games”) has leveled the playing field, making gaining an early lead even more important this time around. At the time of writing, Sony’s PS3 is coming up on about 15 million units, while the Xbox 360 is enjoying a marginal lead at 19 million units. (The Wii, meanwhile, is approaching 30 million units and still selling briskly).
Last week, Microsoft announced a price drop for the Xbox 360, bringing its cheapest version below the retail price of even the Wii, and Microsoft UK regional director said in respect of this: “We think that for high definition entertainment Xbox is first choice... once you get to the price points we’re now at, the mass market can see the opportunity to step into the HD world.” I particularly like the phrase “for high definition entertainment Xbox is first choice” which translates roughly as “we recognise we have no hope of beating the Wii this season, but we think we can thrash Sony’s PS3.” And they may well be right, unless demand for Blu-ray is increasing faster the sales data suggests. (They are now a more popular purchase than DVD players, I’m told, but this doesn’t say much). More farcical is the claim “the mass market can see the opportunity to step into the HD world” – sure, if they already have a Hi-def television. It looks like about 25% of households in the US have at least one HDTV and I’ve seen 20% quoted as an estimate for HD penetration in Western Europe.
Let me put this bluntly: if you chose to make a high definition videogame console at this point in time, you choose to target a fraction of the market instead of the whole of the market. That will change, over time, but who has the time to wait for consumers to catch up on the household technology when you are engaged in an epic market share struggle with your competitors?
Microsoft’s talk about hitting the mass market with the Xbox 360 is fairly ridiculous – only 18% of consumers buying a HDTV do so in order to connect to a games console according to one source; having the 360 cheaper than the Wii isn’t much of a draw if you have to spend three times as much as the console buying the new TV you need to run it on. I appreciate that the marginally improved graphics on the power consoles practically requires HD to make it look any better, but that just reiterates why banking on a step up in graphics power at this time wasn’t necessarily the best choice. The hardcore gamers are techheads who salivate at the thought of new kit; the mass market are nothing of the kind.
At least talk of the Red Ring of Death has declined. That’s not to say that the hardware flaw which transforms Xbox 360s into a seven and a half pound brick has gone away, just that people seem to have stopped caring. Microsoft has extended its warranty, but they haven’t to my knowledge fixed the fault which causes this fatal crash. It might even have helped them slightly: it looks like the failure rate was about 15% or so; if you subtract these units from the total number of Xbox 360’s shipped, Microsoft are only about 2 million in the lead, instead of 4 million. Now that’s irony!
But no matter what uncomfortable situation is facing Microsoft right now, Sony’s bright red cheeks can outshine all competitors. It’s embarrassing enough for the multinational corporation that they have squandered away the biggest market lead in the history of videogames, without examining the manifest problems with the PS3 itself.
The main thing I want to draw attention to today is the mediocre quality of the PS3’s operating system. Japanese companies are rarely known for producing great interfaces, to be honest, perhaps because Japanese consumers are happy to learn to use whatever they are given. In the West, the geeks have more demanding standards, and like to attack any company that transgresses their ideals. Next to the 360’s OS, the PS3 seems positively inadequate – and I don’t often say nice things about Microsoft operating systems which, frankly, have a long history of being subpar.
I’m a big fan of older game styles, so I appreciate the PS3 supporting lots of 2D games in its online selection. What I wasn’t expecting was for Sony to fully replicate the experience of playing on an old 8 bit machine by bringing back loading times. Not since the days of the Commodore 64 and the ZX Spectrum have I spent so long waiting for games to ready themselves... Whereas the Xbox 360 downloads and installs demos automatically, the PS3 does neither of these things without first wasting the user's time. When you select a downloaded game, it must first install – a process which can take several minutes – time during which you must impotently sit and watch the progress bar slowly fill up. (At least most Spectrum games treated you to a loading image during this time!)
Without even beginning to dig into the corners of the situation, the poor quality of the PS3 operating system next to the Xbox 360’s surprisingly well-planned effort (it not only installs downloads automatically, it does so even when the machine is playing a game or on standby) has helped many hardcore gamers – even those previously loyal to Sony – to switch that allegiance to Microsoft’s latest console, and for the most part to remain there. Indeed, the reason that noise about the Red Ring of Death is subsiding might be because once the furious ire of the player whose console has self-destructed has passed, the majority still prefer to buy a replacement Xbox 360 if the alternative is buying a PS3.
Plus, may I say that the PS3 is an astonishingly ugly machine, only slightly more attractive than the original Xbox, although doubtless different people have different tastes in this regard.
In the battle for the hearts and minds of the hardcore gamers, Microsoft appears to be winning by a wide margin. With fewer exclusive titles to turn the tide, small extras can make a difference – the bonus downloadable content for GTAIV on 360, for instance. Other analysts say this mega-title did not generate additional hardware sales in the month of its release, but since we're dealing with hardcore players the decision to buy would largely have been executed months prior to the game launch (Microsoft announced the exclusive content at E3 two years earlier, remember). With the players for whom this was a key title, the 360 must surely have had an advantage.
It’s almost indisputably the case that the PS3, with its secret weapon of a built-in Blu-Ray player, maintains better prospects for crossing into the mass market when compared to the Xbox 360 – but remembering that the principle evangelists of any system to the mass market are the hardcore players, Sony’s ability to capitalise upon their sole mass market advantage is going to be severely hamstrung unless they do something to win back hardcore support in the next year or so. Exclusive titles will be vital to this: Metal Gear Solid 4 has already given Sony a burst of extra sales, and LittleBigPlanet may even court some mass market players, but there's still a lack of breadth to the PS3 exclusives. Sony may be quite surprised to find the PixelJunk games giving them a boost of appeal with the hardcore players – especially since I hear rumours that a top Sony executive chewed out Dylan Cuthbert's Q-Games for making 2D games. (Personally, I feel PixelJunk Eden is the most interesting game so far on the PS3 – and I don't just mean on PSN).
Despite gaining a crucial lead that could potentially land them in second place (after Nintendo) in this round of the infinite console wars, Microsoft have to be careful. Sony have one other advantage up their sleeve, and that’s the design of their console’s chipset which, much as happened with the PS2, is not being fully leveraged in the current games because it’s too hard to program for, and it takes a while for the programmers to work it out. In a few years time, the PS3 could be outperforming the Xbox 360 in technical terms, leaving Microsoft with the tricky question of whether to replace the 360 in an attempt to jump over Sony’s technical edge (at massive cost to Microsoft, and possibly angering the fans if it is done too soon), or whether instead to limp on through this console cycle... Honestly, though, I find it hard to believe that any step up in graphical quality (which is likely what is entailed) would be enough to turn the tide in Sony’s favour if they’ve already yielded the loyalty of the hardcore audience to Microsoft.
The battle is far from over, and Sony have more up their sleeve right now than Microsoft appear to be able to muster, but by stealing hardcore loyalty from their market rivals, Microsoft has gained an edge that could allow them to give Sony a seriously bloody nose this time around. But if it came to 360 versus Wii in a battle for the mass market, Microsoft should save their warchest and call it quits – it may be the hardcore gamer’s ideal machine right now, but even in a dream scenario the 360’s installed base is probably going to top out at about 40 million (not coincidentally, roughly the size of the installed base of Sony’s hardcore-friendly PSP handheld).
The Wii might not have the legs to beat Sony’s 140 million PS2’s, since that was the consequence of a convergence between gamer hobbyist and mass market support which doesn’t exist now that the console manufacturers have torn the market dynamic into two very different halves, but with a good tailwind it could match or exceed the 75 million DS handhelds Nintendo have sold. I suspect it will outsell the 360 by 2:1, perhaps 3:1.
And the PS3? It’s final unit sales may depend more on the uptake
of the Blu-ray format than anything else, so at least it will help Sony with
the promotion of their media format, even while it teaches the multinational the lesson
the N64 taught Nintendo: you still have to be nice to people when you get to
the top, as it’s a long way down...