There’s an old saying in politics that “history is written by the winners.” In recent console wars, from “N64/Saturn/Dreamcast vs. PlayStation” to “Xbox vs. PlayStation 2,” Sony got cramps in its hands from writing so much. Whether by failed marketing or poor leadership, Sega couldn’t overcome the Sony hurdle, and the original Xbox was picking up steam just as Microsoft unveiled the Xbox 360, relegating the Xbox once again to being little more than a Halo adapter for your TV.
With the most-recent console war now in full swing (Xbox 360 vs. PlayStation 3 vs. Wii), it’s tempting to think Sony is finally going to be the company written about by someone else (Microsoft and Nintendo). We’re not making that bet here at DailyGame. We’ve taken a long look at the console landscape, and it’s clear that this is the year the PS3 takes the reins.
To be clear, that doesn’t mean the PS3 will find itself at the top of the install-base pack. In fact, Sony could find itself still sitting in third place by Holiday 2008. But if it does, it won’t be by much. By all accounts, 2008 will be The Year of the PS3, with Sony making significant sales gains — likely outselling the Xbox 360 — and generally making this latest console war much more competitive than it’s been so far.
Nintendo is blazing its own brave, new path with the Wii, and the demand for its unique gaming experience should solidify the Wii’s stranglehold on top. Sales data from the NPD Group indicates that the Wii outsold both the Xbox 360 and PlayStation 3 every month in 2007 but September, when the Wii finished a close second to sales of the Halo 3-driven Xbox 360. Once Nintendo irons out its manufacturing/supply issues, which should happen within the next quarter, the gap between the Wii and “the other guys” should grow even wider.
For all intents and purposes, then, 2008 is a battle for second place, which is where Sony will gain significant ground. Sure, “the PS3 has nowhere to go but up,” but even without a tongue-in-cheek joke, the Xbox 360’s lead will soon erode. December 2007 saw the Xbox 360 sell the most units in its history, but how many of those sales were to “new customers” versus “old ones”? Throughout 2007, consumers defied logic and continued to embrace Microsoft’s hardware, even as the company admitted higher-than-average console failure rates. Will that logic continue to be defied? Not for long.
Microsoft was the first to market with a next-gen console. It had Halo and Halo 2. It had a significant blog following and fanbase. In essence, Microsoft had established such a massive “bank” of goodwill through community outreach that fans were willing to accept month-long repair times after their consoles suffered the red ring of death. But that goodwill is starting to fade, even if sales haven’t yet reflected it.
Talk to gamers on the street, even Xbox 360 fans, and you hear jokes about failed hardware. Talk to bloggers and the editors of Tier 2 and 3 sites, and you hear confusion about what 
happened to the great online PR team Microsoft once had in place. Talk to employees at Gamestop and other retailers, and you hear more enthusiasm for the PS3 and Wii than the yes-for-God’s-sake-you-want-the-extended-warranty Xbox 360. All the positive buzz, all the time Microsoft invested in building its fanbase, is fading away. And it makes one wonder: where would the Xbox 360 rank if consumers’ goodwill hadn’t been there in the first place? What if the positive buzz wasn’t there to erode? Would the Xbox 360 just be a face-plated paperweight?
The delay of GTA IV last fall didn’t do anything to bolster Microsoft’s one-time trump card, as the Xbox 360 and PS3 will now get Rockstar’s open-world game day-and-date this April. The only competitive difference now between the two platforms is the Xbox 360-exclusive GTA IV downloadable content, for which Microsoft paid tens of millions of dollars. This means Microsoft’s only real killer third-party exclusive is the next Splinter Cell game, which for all intents and purposes sounds like Assassin’s Creed with a Sam Fisher skin. The first-party exclusives look a bit better, with Ninja Gaiden 2 and perhaps Mass Effect 2 and Gears of War 2, but will those be enough to keep the Xbox 360 ahead of the PS3?
Sony’s got a great retail lineup, with Killzone 2 and Resistance 2 in the pipe, and even if one of those slips to 2009 (which we expect will happen), the other will provide a marquee matchup against whatever the Xbox 360 throws at it. Sony’s also got Little Big Planet, which should compete with anything Microsoft tosses onto Xbox Live Arcade and may even exceed a few Xbox 360 retail SKUs.
Sony’s online platform, Home, is probably the system’s biggest shortcoming, and we doubt Sony will ever truly catch up to the functionality and ease of Xbox Live. But even there, Xbox Live gamers are growing increasingly frustrated with immaturity, teabagging and frustrating failure of Xbox Live to perform under the holiday crunch — a failure that still surfaces in spurts to this day. All of this begs the question: Xbox Live may be the Xbox 360’s golden egg, but how long consumers continue to pay for a service that’s free, and more predictable, on the PS3?
Perhaps the biggest irony of the PS3’s predicted success may actually be Sony’s biggest gamble: the PS3’s built-in Blu-ray player. Now that Warner Home Entertainment — which accounts for almost two-thirds of all home-movie sales in America — has said it will no longer support HD-DVD, HD-DVD’s days are numbered. Many consumers bought the PS2 early in that system’s life because it played DVDs, which at the time were a relatively new format. The PS2, in turn, was a relatively inexpensive DVD player, and even if the DVD format didn’t pan out at the time, at least consumers could play games. Look what happened there. Have you seen a VHS movie anytime recently? Yeah, right next to the eight-tracks.
Here we are in 2008 in much the same situation. Blu-ray and HD-DVD were engaged in a heated battle last year, much like DVD and VHS were during the early days of the PS2. Consumers were unsure in 2007 which of the high-definition formats would take hold, much like they doubted whether DVD could supplant VHS. But with the HD-DVD consortium slowly dissolving, Blu-ray is on a clear path toward replacing DVDs. And with the PS3 being an “affordable” Blu-ray player, Sony’s next-gen console has a clear path toward repeating history.
When you look at game lineups, consumer goodwill, format wars and hardware longevity (Shane Kim really expects a shorter lifespan for the Xbox 360 than the original Xbox?), it’s hard not to see the PS3 coming out on top in the fight for second place. Who knows…maybe consumers will grow tired of the Wii simply being a Wii Sports adapter for their TVs and look toward the more-expensive systems, thus boosting PS3 sales a few more notches. But no matter how you slice it, the PlayStation 3 is going to gain significant ground in 2008, and not just because it ran a distant third in 2007. If Microsoft wants to retain its second-place status, it must go to great lengths not only to rebuild its once-rabid fanbase, but to remove every reason to joke about failed hardware and to re-instill confidence in its one-time Ace, Xbox Live. They haven’t done that so far in 2008, and we don’t see them getting over themselves enough to do so in the months to come. And that’s why it’s hard to see 2008 being anything other than The Year of the PS3.
— Jonas Allen
