The next-gen consoles and E3 2013 have inspired more questions than answers, from Microsoft’s position on used games (read our Xbox One used-game policy analysis) and the status of PS4 pre-orders to the future of GameFly on Xbox One and the Xbox One and PS4 release date. Much to Nintendo’s chagrin, the upcoming console war is clearly a PS4 vs. Xbox One discussion. In light of this, we’ve prepared a three-part series to take a deeper dive into the issues that have surfaced during the past few weeks and to see what we can glean by reading between the lines. This article, the first in our series, takes a step back to focus on historical context and see what previous consoles have shown us about how to successfully enter the next generation in North America.
They say if you fail to learn from history you’re doomed to repeat it. Tell me if you’ve heard this story before. A console manufacturer is wildly successful in one generation, leaving its competitors to eat its sales-results dust. Confident in its position, the leader looks to its next-generation system and begins to stubbornly promote its own agenda, technology or innovations. When the company ships its next-generation console, the market leader quickly finds itself in second place — sometimes distantly so — and loses traction for an entire generation to the company that focused on the one audience that matters most: gamers.
I’ve heard this story before, probably more times than I care to admit, and it seems to be playing out today with the PS4 and Xbox One. Coming out of E3, it’s not unwarranted to ask whether Microsoft and Sony are destined to switch positions in the next generation. This scenario has played out between the Atari and Nintendo generation, the Nintendo and Sega generation, the Nintendo/Sega and Sony generation, and the Sony and Microsoft generation. Now on the verge of another console transition, will Microsoft’s Xbox 360 cede its advantage to Sony’s PS4? An analysis of the move from PS2/Xbox to PS3/Xbox 360 shows some striking similarities. If the widespread claims of Microsoft’s E3 struggles are to be believed, the transition may already be taking place.
Sony struck gold with the PS2, largely because its DVD player was the company’s Trojan horse into millions of more homes than the PS1 even aspired to. Yes, the hardware would glitch sometimes — anyone remember having to eject a disc or play a game by flipping the console upside down? — but the PS2 had some mighty fine software and some of the biggest exclusives. And, although it was late to the online party (some would say it still is…), it still had enough gamer goodwill to overcome the original Xbox and its promising-but-premature Xbox Live service.
With that leadership position in hand, Sony set out to create the PlayStation 3. Things started out according to plan, with the Blu-ray drive acting like a Trojan horse for Sony’s proprietary format. Then the “leadership bug” hit, and it all started to fall apart. Rather than talk about increasing the RAM for better game performance, Sony focused on the PS3’s super-advanced Cell architecture. Rather than talk about enhancing its online platform, Sony discussed how distributed computing via the PS3 could help solve complex scientific problems and find a cure for cancer. Seldom did the keynote focus on games; it was always about horsepower, speeds and feeds, and the technical prowess of the beefed-up PS3.
Coming up in the rear was the Xbox 360, which Microsoft hoped would fare better than its initial Xbox outing. The Xbox 360 backed the wrong horse in the Blu-ray vs. HD-DVD race, and it even botched WiFi out of the gate. Neither of those really mattered in the long run, because Microsoft’s consistently focused on the community of gamers and game developers. The Xbox 360 had (and still has) some technical heft, but its interface and Xbox Live were the stars of the messaging show. While Sony talked about technical innovations, Microsoft touted the functions that mattered most to gamers. Now on the verge of a new generation, we see the Xbox 360 dominating in console sales, even surpassing the once-wildly-successful Nintendo Wii.
With this history in mind, our next article (read it here) focuses on what the current market leader has done to prepare the Xbox One for its next-gen release. By digging into Microsoft’s pre-E3 announcements and how it showcased the Xbox One at E3, we’ll analyze whether Microsoft has learned its lesson from previous generations or is going down a path that dooms it to continue the vicious cycle above.
— Jonas Allen
