The Blue Ocean is deep
Monday, April 30th, 2007 at 1:00pm by Staff
I worry this morning that the table has been set for a repeat of the early 1990’s.
The industry is healthy, with two of the three console makers selling their wares briskly, and the slow trickle of software that was the first six months of the “next generation” is set to increase as we head into and out of the summer doldrums. Well, it’s set to increase in the Nintendo corner anyway, with those 100+ first party games being in development. Gamespot is saying it could be as high as 124, although they might not all make it to production (hey, just like Nibris!).
On the surface that kind of news is great for Nintendo, but as the title of the post says, the Blue Ocean is as deep as it is wide and I fear the potential exists beneath the surface for another dark era in Nintendo gaming.
The irony is Nintendo, so far, has not returned to the monopolistic levels of its former SNES-era self. Instead, Nintendo’s competitors are dropping the ball, and by doing so are opening a vast hole in the industry that Nintendo may find too tempting to resist (some would argue that Nintendo has already begin to reshape the industry in its own image, again, so this may be a moot point).
So how is the competition mucking things up? To answer that I’ll not go into detail about the PS3; it’s foibles and follies are well-documented here and elsewhere. No, it’s the current leader, Microsoft, that has me worried. Their Xbox 360, once a shoe-in for front runner status thanks to a great game library and robust online presence, is quickly becoming 2007’s house of cards. After Q4’s channel stuffing debacle, 360 sales have plummeted.
Seeking Alpha:
XBox 360 is a console that should be hitting its stride now nearly 18 months after introduction — instead, its sales are declining and not hitting their goals. Eighteen months into Apple’s (AAPL) iPod rollout — a product which sold at the time for more than the XBox 360 — it had sold nearly 30 million units. Microsoft is struggling to achieve less than half that.
The 360 will not meet its sales goals this quarter, and this is after one slash in forecasts already. The PS2 (remember that?) consistently outsells the 360 month over month.
And speaking of that slim little black system (what the Xbox 360 Elite wishes it was), the PS2 sells like gangbusters everywhere. In game industry years, the thing is one foot in the grave of obsolescence, and yet it still sells. And thanks to what? A great library. Does this mean that gamers had already accepted the next gen wasn’t going to be all about graphics? Was industry already begging or ready for a new direction? I’m certainly no expert, but what I do know is both Sony and Microsoft were all too eager to dismiss the massive fan base of the PS2 in the name of “more power.” 100 million consoles sold, and apparently they meant nothing. What gamers were told was that the big companies knew what was good for them, and that their desire for game play was second seat to horsepower and the “media center strategy.”
Enter Nintendo. Going left while the industry goes right … over a cliff. The potential exists for a huge void. The last time I saw such a void was in 1986. Sure, I was only six years old at the time, but I took notes, dammit. The NES took the Americas and the world by storm, and video games became synonymous with Nintendo. For a Nintendo fan like me, that kind of environment is great in the short term, but I had always assumed the competition was going to sack up and deliver some appealing alternatives. Sure there were the GoW’s and Halo’s, but those formulas are stale to the void that exists outside of the XBox’s 10 million strong base. Hell, they may even be stale to some of those inside the base — just look at those falling numbers.
My hope lies in the DS. Both as a system and as a strategy. The DS is the market leader and was only threatened by the PSP for a few months, if that. Regardless of that fact, Nintendo was still able to push great IP in the absence of competition. There’s nothing in the cards that says they can’t or won’t do that with the Wii. It could be a rare case of innovation in the absence of competition.
But the risk for the old 90’s monopoly practices still exists, so I’m packing a life preserver.
April 30th, 2007 at 2:25 pm
nice article
April 30th, 2007 at 3:04 pm
A Nintendo-only gaming world is something you don’t wanna live in!
As much as I love my Wii and my DS, I still love my Xbox just as much, and plan to get a 360 soon! Nintendo definitely does NOT fill all my gaming needs!
(I’m speaking, of course, on the behalf of all simultaneous Pokémon and Halo fans out there… all three of them!)
April 30th, 2007 at 3:04 pm
Very interesting and provactive post. I agree with your analysis from both financial and strategy perspectives. If only the gamers could take a step back and look at the competitive dynamics as they are - not what they hope they will become at some undetermined point in the future. Only time will tell, but I think your outlook on both the Wii and the DS are right on.
April 30th, 2007 at 5:24 pm
Maybe 360 is selling bad because it’s a huge piece of crap, it’s kind of the Lada of videogaming, always broken, not to mention it’s expensive, not the PS3 Midas level but still expensive… & the games generic space marine brainless shooter after one another… & last but not least it’s Microsoft, there are quite a few people over the world that aknowledge MS for what it is & hate the company!!! I sure hope so that MS never manages to be successful in the videogaming industry for the sake of us gamers, you have to be totally blind or uninformed about MS history to root for them!!! Videogaming is becoming Barbie-like under Sony & MS guidance: Shiny & dull!!!
GameGod
April 30th, 2007 at 5:48 pm
That’s a brave comment to make anon - and it’s how I see the Xbox market too.
My brief observations suggest that it’s the many “PC geeks” who’ve migrated to the xbox after the near-collapse in PC gaming. The sort of person who cares about Hi-Def graphics gazillions of polygons and FPS’s.
May 1st, 2007 at 1:08 am
one of the best articles i’ve read in a while
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http://www.howtogetfreewiipoints.com
May 1st, 2007 at 3:51 am
Even if Microsoft and Sony gave up on video games as of right now. If there were no more XBoxes or Playstations at all, Nintendo still would not have a monopoly. PC gaming would make an instant comeback in the US. It’s already the king in the rest of the world. Also, cellphone gaming is too strong. Nintendo might be able to dominate the living room and the back seat of the car, but they will never conquer all of video gaming outside the arcade as they once did. If Nintendo was the only console choice, developers would breathe new life into the PC so fast.
May 1st, 2007 at 3:53 am
some of you need to get your head out of your butts and think.
if there is no xbox then those types of games will just move to PC again or to the Wii, and how is that a bad thing?
so wii may have gotten gears of war. the gameplay could still have been done on the wii. or it could have gone exclusively to the PC, and you would have spent that $400+controller on a graphics card, maybe even a CPU to play it. whoop-di-doo
the collapse of hardcore gaming would be brought on by a nintendo only world my butt.
nintendo is run by a completely different group of executives now, Iwata and reggie do not think like the characters of the past, and this paranoia about them reverting is baseless.
besides that, they do still have policies that do not fit all developer needs, but because i dont like the corruptness and crappiness that comes from microsoft, especially coming from the PC world (linux user), and Sony all around poor quality and ego, i would much rather them die and another company come in as a competitor to nintendo.
and in the end thats yet another area yall need to look at the big picture. if these 2 giants fall, another company will pick up the slack and we can try again, maybe getting better companies involved. we cant do any worse. you will be happy with anything, before 360 you werent complaining about what you didnt know was coming. and you can have fun on any system, so just because you have fun on it does not make it, or the company good, it just makes the game fun.
May 1st, 2007 at 4:43 pm
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
May 5th, 2007 at 6:00 pm
How should I put it in a friendly matter?
Who would compare sales of iPods and Xbox 360s? That really like apples and oranges!
Nintendo predicts 14 Mio. Wiis sold by end of FY2008, let me guess PS2 will sell more…?
It’s good to see that Nintendo has success (for now) but what is 2 years from now, when HDTV really penetrates the market and the HD consoles will be enjoyed fully?