Why the Console War is Over

People ask me about the “console war” all the time. “So, what do you think the best system is an why?” “Which consoles are people buying the most?” “When will the rush be over?” Let me get this off my chest: There is no console war. There may have been a spike in competition between the three systems (Xbox 360, Nintendo Wii, and Sony PS3), but now it is over. I’m not talking about which system is the best, I’m talking about overall demand lately. Who emerged the victor? Why the Nintendo Wii of course, and here is why:

The Xbox 360 has been around for awhile. It had an advantage over the other two systems, as it was launched almost an entire year earlier. Microsoft has some great games available and enough peripherals to keep even the biggest Xbox nerd happy. I’m not denying that Xbox 360 is a great system, just merely saying that it has been around for awhile already and people aren’t clammoring for it like they used to.

People waited for hours in line outside of popular electronics stores just waiting to pick up their Xbox 360, much like those waiting for a Wii or PS3. However, this year there were no lines and barely any phone calls asking if the Xbox 360 was in stock. Gaming stores rarely sold out of systems, and when they did, the Xboxs was readily available within a few days.

No one had to fight over Xbox 360s this year, and although the console still sold great numbers, the supply of the console has had enough time to keep up with the demand over the past year. The Xbox 360 struggled to sell at first due to failures and skepticism of the new hardware, especially when developers were still making great games for the regular Xbox.

Now that Microsoft has stopped making games for the Xbox, fans need to upgrade, so Xbox 360 sales started picking up last spring. Many consumers know that there are many great reasons to pick up an Xbox 360, such as: the extensive Live play, exclusive downloads, strong game line-up, and hardware dependability. No one is doubting that the system’s sales are holding strong, but the demand for them is not as immediate as it once was.

The Sony PS3’s chance against the Wii and 360 looked dismal before the system was even launched. The failure of the PSP had many of us wondering if Sony had enough up its sleeve to keep gamers enticed, and many of us (including me) were sadly disappointed on November 17th, 2006. Yes, gamers waited in line, there were fights, and some people got shot. But after a few days of craziness, the fight for the PS3 was over.

Sony launched with a small number of units, an even smaller game line up, a high price point, and no component cables (granted, the Wii does not come with any either, but the Xbox 360 does). With a price tag of $600, many parents quickly turned to the Xbox 360, Nintendo Wii, and Nintendo DS. Many gamers decided that paying their mortgage or car payments in December was more important than dropping the sizable chunk of moola on a gaming system. Unfortunately, only a few of the PS3’s launch titles were exclusive, one being Resistance: Fall of Man. However, the other titles were already available for the Xbox 360 and this trend is said to be continuing.

Sony has lost exclusivity on many of its premier games, such as the Final Fantasy series. Square-Enix has not officially said that they will be releasing Final Fantasy XIII on other systems, but has claimed that they do not want to solely support Sony. Guitar Hero II is coming to the Xbox 360 in March, and many of the original Final Fantasy games have been made already for the GBA and DS, although Sony promises to have them released on the PSP sometime soon.

Sony launched the PS3 with the smallest amount of complete systems on record. After pushing the PS3 back a few months and then having the system be late to the assembly line, Sony faced a dismal number of units available for launch on November 17th, which was approximately 400,000. The set back seems to have stemmed from the use of blu-ray hardware that was untested and continuously failing.

Sony also missed out on their chance for a global launch by delaying the date of the PS3 launch in Europe to April 2007. Although the Xbox 360 was also in short supply when it first launched, Microsoft realized the importance of spreading the love throughout the US, Europe, and Asia, even if the system had slow adoption.

Another thing: Blu-ray is expensive. The movies cost more and the technology is a pain to develop for. Right now there are less than 10 Blu-ray movies sold at any Gamestop or EB games, and the initial stock is starting to collect dust as they remain unsold. Sony tried to urge consumers to purchase more Blu-ray movies by adding “Click” to a select number of holiday PS3s. However, the movies have still failed to catch on.

Analysts say that when Blu-ray players reach the market, they will start at a price point of around $1000, which is why the PS3 is priced so high. Most of us would rather settle for a nice HD-DVD player for around $200 instead. Considering less than 10% of the US population has forked over the $3000-4000 for a HDTV, what’s the point of Blu-Ray if you don’t have the upgraded TV? Also, the PS3 doesn’t even include component cables, which are an additional $50 and the HDMI cable for a PS3 is $90. Anyone with an HDTV with HDMI output would want to upgrade their cables for a better picture quality, but not at the expense of an additional $50-100.

I don’t care if the gaming engine is more powerful than the Wii and comparable to the Xbox 360. I don’t care about the blu-ray player, or if the system will be great in 2008. If that is true, I’ll wait a year to buy it. What is one good reason to purchase the system at this exact moment in time? I feel that many consumers are asking the same questions, and this is what has led to Sony’s pathetic launch and sale numbers.

Demand for the PS3 has become so dismal that many dealers have a wall of systems in the warehouse, but still no Wiis. The PS2 sold out last Christmas, and I don’t believe it’s due to how inexpensive the dated system is currently. The only time I have witnessed a rush for the PS3 has been when gaming stores offer more trade in credit towards the purchase of a PS3 when a PS2 is traded in. Even with these deals, the PS3s still haven’t sold out.

Sony blames the delay on a manufacturing problem with the PS3’s untested and expensive Blu-ray optical drive. “This became a typical result of not knowing what to expect with a brand-new component,” Sony executive Ken Kutaragi, the head of the company’s game division, said. “This was a completely unexpected problem. There’s nothing I can say except, ‘I’m sorry.'”

You could say, “Game over.” Sony has suffered embarrassment after embarrassment with the PS3 and its troubled Blu-ray hardware. This latest delay and the lowered availability estimates mean that the company will lose out on crucial revenues and momentum during the holiday selling season.

Meanwhile, Sony’s key competitor, Microsoft, has already taken advantage of this situation. Last year, Microsoft pulled off a simultaneous worldwide launch for the Xbox 360, though availability of the next-generation console was tight until early 2007. Microsoft, as you might expect, offered words of encouragement to its stumbling rival. Sort of.

“We know how challenging it is to pull off a global launch, so it’s not surprising that Sony has backed away from their previously announced launch plan, due to the unproven technology they are trying to pack in to their console,” Microsoft Xbox U.K. boss Neil Thompson said. “Europe remains a priority for us. That is why gamers have been able to experience Xbox 360 [there] from day one, and why we’re confident we’re going to have a great Christmas–regardless of what competitors are or are not in the market.”

Although Microsoft still says has reached its goal of 10 million Xbox 360 consoles sold worldwide, Sony’s goals, suddenly, are much less lofty. The company offered only 2 million PS3 units to the U.S. and Japanese markets, less than half of what it previously promised. And just 400,000 consoles were available on November 17, the day the PS3 launched in the United States.

Regardless of who has the better technology, the better price-point, or better games, parents and children alike can’t get enough of Nintendo. If it wasn’t the Wii, it was the DS and GBA. Hands down, Nintendo products were the most impossible to get last holiday season, and supplies of these sought-after systems continue to be short. But, this isn’t an argument about why the DS and GBA have sold so well. The Wii has come from behind and clearly won the race.