NEW VIDEO GAME
Copyright 2001 www.tombraiderchronicles.com
[ November 8th 2001 ]
gamers have been waiting all year - or longer
- for the showdown that's set to kick off next
week. First, on Nov. 15, Microsoft will launch
its Xbox, its debut in the console market, and
then Nintendo's GameCube will go on sale three
enough by itself to keep gamers abuzz, but both
consoles are going up against Sony, which has
already sold 5 million PlayStation 2 systems in
the North American market. The video game industry
is one of the few still-promising areas for the
bruised technology sector. Stock prices for major
game publishers have taken off the last few weeks
in anticipation of consumers going shopping for
their new consoles.
the rewards will not be shared equally. Game developers
are the sure winners in this fray, while console
manufacturers will have to eat years of losses
on the hardware -- and that's if things go well.
If not, they could follow the example of Sega:
The one-time industry leader dropped its Dreamcast
console earlier this year to focus on creating
software for other platforms.
risk for console makers isn't that they will fail
to sell enough hardware at the start. Both Microsoft
and Nintendo can count on buyers for every one
of the 1 million to 1.5 million units each company
can ship to U.S. retailers this holiday season.
Each company could probably sell even more, were
it not for production delays that led them to
quietly move their launches back several days.
of these customers, however, will be the same
quasi-obsessed game fans who waited in long lines
to pick up a PlayStation 2 last year. "The question
for Microsoft," as GartnerG2 analyst P.J. McNealy
puts it, "is how rapidly they can grow the market
beyond hardcore gamers."
them, a console won't graduate to profitability.
Merrill Lynch analyst Henry Blodget estimated
earlier this year that Microsoft will lose about
$75 on each console it ships, for a total of $2
billion, before it reaches the break-even point
in 2005. Morgan Stanley analyst Mary Meeker offered
a more optimistic forecast this week, saying Microsoft
could lose $1 billion on the product before breaking
even in 2004.
almost dot-com-esque logic is nothing new to the
video game industry, where manufacturers underprice
their hardware to build market share as quickly
as possible. At $299.99, Microsoft's Xbox may
not be cheap, but when it goes on sale Thursday
it will arguably represent the most sophisticated
game platform yet seen. The Xbox contains fast
chips and graphics processors, as well as a hard
drive and modem that will allow users to compete
online and work through complex games without
having to wait for a slower CD-ROM drive to load
days after Xbox's Nov. 15 release, Nintendo --
the company synonymous with such kid-pleasing
creations as Pokemon and Mario -- will release
its GameCube. At $199.95, it's about $100 cheaper
than either the Microsoft or Sony machines. The
console may also benefit from what Nintendo calls
its "Trojan horse" -- the Game Boy Advance handheld,
which can plug into a GameCube to become a controller
PlayStation 2 has a few advantages of its own.
For one thing, the company has that one-year head
start. For another, analysts say, many gamers
who haven't been inclined to buy a new console
yet will probably favor the PlayStation 2 when
they do because it also plays older games written
for the 88 million PlayStations sold so far worldwide.
these advantages, analyst McNealy described this
year's three-way console game battle as "a race
for second place" behind Sony. He asked: "Can
Microsoft morph its brand beyond Bill Gates and
an operating system to a consumer-facing, fun
entertainment brand in the living room?"
company insists that the console industry is where
it belongs. "When you think about the breadth
of coverage, the number of people [video games]
reach and the way software is involved, it's really
hard to find a better place for us," Robbie Bach,
Microsoft's chief Xbox officer, said in a recent
interview. "We think about this as a long-term
company has already won over some earlier skeptics.
"A few months ago we would've said [Microsoft]
didn't have a chance in hell," judging from the
company's showing at E3, the video game industry's
main conference, said John Davison, editorial
director of half a dozen game magazines for publisher
Ziff Davis. But the editors of one of the company's
main gaming magazines, Electronic Gaming Monthly,
recently voted 6 to 5 to rank Xbox above GameCube.
To get its message across, Microsoft plans to
spend $500 million to market the Xbox.
as importantly, the company has enlisted the support
of major game developers such as Activision, Electronic
Arts, Eidos, Midway and THQ. As video game industry
veterans never tire of observing, it's the games
that ultimately make or break a console. For instance,
while No. 1 publisher Electronic Arts' decision
not to support Sega's Dreamcast didn't kill that
platform, it almost certainly hastened its demise.
first batch of games available for each console
reveal that each machine is targeting a slightly
different audience. The first title out of the
gate for the Xbox will be Halo, a shooter game
originally designed for PCs. It's a complex, flashy-looking
adventure about Marines fighting aliens, a timeless
theme among 18-and-up gamers.
GameCube launch titles will be more kid-oriented,
featuring the company's longest-running characters
- for instance, Luigi's Mansion, a cartoony ghost-hunting
game that extends the Mario franchise, and Super
Smash Bros. Melee, which incorporates such celebrity
characters as Zelda and Pikachu.
Microsoft, keeping the attention of game developers
will be as important as attracting consumers to
the Xbox. Just as consumers want to buy the consoles
with the most and best games, gamemakers want
to develop software for the consoles with the
next several weeks will set the first stage of
this console war. But all sides agree that the
winner won't be determined in a single holiday
season. "Microsoft is not trying to be a pop culture
icon yet," said Davison at Ziff Davis. "They're
going after the early-adopter crowd with some
disposable income and time to play...If they hook
that crowd, they can grow from there."