The Console Game Business Is Terrible
Big news! Videogame sales in Japan had their worst week ever! No wonder since the console business is sick. That’s exactly what Stewart and I predicted in June last year. We said the videogame industry is due for a major overhaul. (Download the Powerpoint presentation in our Library.) Our premise was that the next generation of games is going to be too expensive to produce and that the new games that do get produced are versions of old, stale games.
The news from Japan this week: the PlayStation 3 has had its worst week ever (ending January 14th), selling only 25,531 units in Japan. The Nintendo Wii had its second worse week selling 93,708 units. The Microsoft Xbox 360 couldn’t even sell 10,000 units. Retailers in Japan are reducing their PS3 prices by upwards of 20% in order to stimulate sales.
After buying two of the three new boxes and playing with all three platforms (Wii, PS3, and the Xbox 360), I have to say that I haven’t been impressed with any of the platforms.
The Xbox 360 is the worse of the three. Even on my 10-foot high definition projection screen at home, I can’t really tell the difference between the games that are shipping on the 360 and those I can buy for the PS2. Even worse, most of my old Xbox games are not compatible. Of the 100 plus titles, I can’t name one that is exclusive to the 360 that I would buy that machine to play. Of course, the Xbox has that special Microsoft feature that requires you to update your machine on the network out of the box otherwise your games will just crash without any warning.
The graphics on the PS3 are great, but the current crop of games are more of the same with just prettier graphics and for $599 for the machine and $60 per game, I want significantly more than just eye candy.
Of the three boxes, only Nintendo’s Wii offers anything new and compelling. The controller is fantastic even if the strap is cheap. The problem with the Wii is that the box suffers from an anemic graphics co processor and CPU. While the current set of games are fun, the novelty of the controller is already beginning to wear off (not to mention how sore my wrists are getting).
That’s not to say it’s game over but we better start seeing some compelling and platform defining titles soon, otherwise it’s going to be a blood bath for both the console manufacturers as well as the software publishers. (And we’re open to pitches for new kinds of game companies, as we describe in our presentation: more television-like, episodic kinds of content with a business model that works.)
February 9th, 2007 at 3:33 pm
Let us hope that the next generation of Gran Tourismo truly exploits the consoles capability!
February 20th, 2007 at 9:46 am
I agree with most all of your comments, particularly that the business itself is risky and difficult to forecast. Nintendo however has done something truly different for the first time since consoles came out, so that sets them apart from the get-go.
In regards to the Xbox360 comparison though I have to disagree. Playing games on an HD TV with the 360 set up accordingly (to transmit in 1080p) it clearly blows away all former consoles. And it equals the PS3 in performance without the ridiculous cost. It also has a library of games far and above the rest and the online connectivity market beats out the other new consoles. If I were to go with a winner from here, or 3 years from now, I would begrudgingly pick Microsoft.
It would be nice to see more episodic content but as of yet I can’t think of a company that has overcome the problems of production and deliverability while providing a great product. It will be interesting to see what comes of that.