Dan

Complete this Analogy:

PS3 Sales are to Xbox 360 Sales as...

A) Wii Sales are to PS3 Sales

(In other words, the Wii sold over 5x what the PS3 did, and the PS3 sold just over 5x what the 360 did.)

Would it be better if Nintendo WASN'T interested in what consumers want?

New York! Please!

I'm practically twitching at the prospect of being able to apply for Nintendo jobs without moving :-P

If the issue really is the costs - especially licensing related costs - then the way to deal with it from RedOctane's side is simply transparency.

If we know that between licensing, development and approval it's costing them $1.85 per song downloaded, then we're likely to be far more accepting of the price.

I understand the chances of them revealing the financial terms of their licensing arrangements are slim to none - but even ballpark figures would go a long way to remedy the idea that the DLC is simply a money grab.

If you're going to release content at a price point so far above expectations, you need to do a really good job of explaining both the value of the content relative to the price AND the cost issues which are forcing the price so high.

An inability to do this is what has been destroying the PS3's sales thus far - and we're seeing MS/RedOctane fall into the same trap.

Um.. 2.8% net earnings (~6.3% ops margin) really isn't THAT impressive. I mean, yes, it's showing a profit - but it's unlikely that that's even covering the opportunity cost associated with the capital they're employing.

I know we love pointing to the big players and talking about how exploitative they are... But while 158.3 million in earningS sounds quite impressive, it really isn't for a 5.3 billion dollar company.

I still see a strong chance of the Wii ending up on top here - strongly contingent upon the success of the Blue Ocean strategy and an inability on MS's part to rebrand the 360 away from being as 'hardcore'.

Right now, the branding of both the 360 and the PS3 is tied up in hardcore gaming. Frankly, it turns people off who don't really fit into that demographic. (Moreso the PS3 branding - 360 is more neutral, but certainly isn't a casual brand. 'xbox' on it's own is a name with segment appeal, although at least the 360 aesthetics aren't nearly as obnoxious)

The real question to be answered is whether or not the Blue Ocean strategy has legs when it comes to video games - will the initial surge in audience reach the critical mass it needs to be self sustaining. (ie. enough non-typical Wii owners getting others interested and creating enough real demand within the non-traditional markets)

As far as third party support goes - it's all going to be down to share. We haven't yet gotten to the point where we're going to see the benefits of the Wii's early success - but you can bet that the unexpected success of the platform means that there are more Wii games in development right now than there would have been otherwise. This will lead to better exploitation of the hardware by devs, which in turn leads to better games, which in turn leads to better console adaptation.

Future dev is driven by current market share. Right now, the Wii and 360 are both sitting pretty - exploiting, largely, totally separate markets. Sony's problem is that there's really no room to wedge the PS3 in there. The 360 has traction in the HD/traditional console space due to games like Halo, and the Wii is capturing the markets for casual games, classic games, and those interested in departures from standard console fare. What this means is without some really good exclusives, the PS3 is going to have a lot of trouble building enough of an install base to convince developers to target it (there's already much discussion about how much easier the 360 is to build games for, and how most of the HD games are going to be 360 native and ported to PS3 hardware). And the PS3 is losing exclusives left and right.

So... I disagree with Gardner. I don't know that the Wii will be in first in five years - but I doubt the PS3 will. The 360 stole the PS3's thunder in the existing market, and the Wii blew open new markets. It's going to take some monster killer apps for the PS3 to come back.

Upper East Side, NYC.

(#32 - I grew up in Greenwich Village.)

I voted for the Wii for the following reason -

In terms of current implementations, keyboard and mouse wins. However, I believe strongly that more mature Wii games will really manage to redefine FPS controls - the track shooting sequences in Rayman are brilliant, and show what the experience of merely aiming and shooting using the Wiimote can be like.

Without going into a treatise on game interfaces, the Wiimote being such a good proxy for the in-game character's action is a very, very good thing. It removes several abstraction layers which interfere with immersion and engagement.

Analog sticks are awful FPS controls. They're imprecise and make aiming in the virtual world harder than it would be in the real world.

#34:

The race at this point isn't about console revenue, which is the comparison you're making. Yes, when you look at the revenue directly generated through console sales, it's a closer picture. However, it's well known that the only one of the big players who makes any sort of profit on the console sale is Big N - so the revenue generated is largely irrelevant, since none of that is actually profit (and in Sony's case, they're seeing a substantial loss on every dollar or yen of revenue they get from a PS3 sale)

Console sales are purely a quantity game. Sold consoles define the market for the games - the more Wiis out there, the more attractive it is to develop for the Wii, since you have more potential buyers.

Sony doesn't have a very long time to fix things - they can't wait for FFXIII or MGS to come out to sell boxes - by the time they come out, a lot of developers may have already committed to exclusives for either the 360 or the Wii, where they're more assured of having a large market willing to buy their game.

I.

My first next gen console was the Wii. I think I planned to pick up either the PS3 or 360 later on, at that point. I ended up buying the 360 since it had a larger library... and because I had serious doubts about the PS3.

Right now both MS and Nintendo are looking great this generation. They both have extremely strong value propositions - and unlike a 360 vs. PS3 war, a market dominated by the Wii and 360 have the two main players targeting largely different markets.

The winners here are MS, Nintendo, Gamers, and Gaming in general. Sony isn't dead yet... but if the unsold PS3s at my local Best Buy are any indication, they don't have very long to figure out how to not become an afterthought.