Posted By: John Steele
By Lisa Baertlein
LOS ANGELES (Reuters) - The $30 billion video game
industry's own war of the titans reboots this week with the
U.S. launch on Friday of Sony Corp.'s PlayStation 3 and
Sunday's debut of Nintendo Co. Ltd.'s Wii.
ADVERTISEMENT
if (window.yzq_a == null) document.write("");if (window.yzq_a)
{
yzq_a('p', 'P=Z3Na1ELaS.YC_99O1.UTgQRYSDRIwkVb2CMADMnv&T=18fcum6vl%2fX%3d1163647011%2fE%3d7666516%2fR%3dnews%2fK%3d5%2fV%3d1.1%2fW%3d8%2fY%3dYAHOO%2fF%3d1818045055%2fH%3dY2FjaGVoaW50PSJuZXdzIiBjb250ZW50PSJ2aWRlbztJdDtNaWNyb3NvZnQ7QnVzaW5lc3M7cHJpY2U7aXQ7TWFuO1ZpZGVvO3RlY2hub2xvZ3k7UHJpY2U7IiByZWZ1cmw9IiIgdG9waWNzPSIi%2fS%3d1%2fJ%3dABA949D1');
yzq_a('a', '&U=13a7ila3i%2fN%3dF3q7AELaSs4-%2fC%3d555469.9388392.10338703.2498248%2fD%3dLREC%2fB%3d4128832');
}
A limited supply, delayed debut and drop in the number of
games built exclusively for the new PS3 could stifle market
leader Sony's quest for mainstream hearts and dollars until
after the crucial holiday season, a far different scenario from
the last console battle when Sony beat key rivals to market.
"It's a significantly more competitive market this time,"
said Yankee Group video game analyst Michael Goodman, adding
that many parents are not brand loyal and will not let
Christmas pass without a console for the gamer on their list.
Initial supplies of the PS3 are expected to quickly
evaporate and Goodman and others expect Microsoft Corp.
(Nasdaq:MSFT - news) and its 1-year-old Xbox 360 to be the main beneficiary
of the resulting spillover in demand.
While shortages can create beneficial media buzz, Sony's
shortage is so severe that its rivals stand to gain, Eric
Johnson, a professor at Dartmouth's Tuck School of Business,
told Reuters.
Johnson predicted that holiday shoppers who are unable to
bag a PS3 may just grab the Xbox 360 instead: "My thought is
that Microsoft is the real winner this Christmas."
Both the PS3 and Xbox 360 have advanced graphics and faster
microchips to handle more on-screen action and deliver
characters that look more lifelike than ever.
Nintendo's Wii does not compete for computing power but has
a remote control that can be swung like a tennis racquet or
sword and, at $250, costs less than half the $600 price for the
top-line PS3 and significantly less than the $400 high-end Xbox
360, making it a potential spoiler.
Sony (6758.T) (NYSE:SNE - news), which dominates the global console
market with its current-generation PlayStation 2, has forecast
global PS3 shipments of 2 million by the end of calendar 2006.
Microsoft expects to have shipped five times as many Xbox
360s by December 31, while Nintendo (7974.OS) is targeting 4
million units.
BEST GAMES
In the year since its launch, Microsoft's Xbox 360 has made
significant inroads in the U.S. market, which accounts for more
than one-third of overall video game sales. It has attracted 4
million subscribers to its console-connected online gaming
service Xbox Live and created buzz with exclusive new titles
like Epic Games' "Gears of War."
"Resistance: Fall of Man," from Insomniac Games, is the
most talked about exclusive launch title for the PS3.
Take-Two Interactive Software Inc.'s (Nasdaq:TTWO - news) blockbuster
"Grand Theft Auto" games were heavy hitters on the PS2 but the
newest version will be released on both the PS3 and the Xbox
360, which is getting extras for Xbox Live users.
Video game publishers are hitting their stride on the Xbox
360, having had time to become familiar with the new
technology. Industry watchers expect to see a similar pattern
with PS3 games.
Price is also a big issue for consumers and businesses.
Some gaming enthusiasts say they are limiting themselves to
one of the more expensive machines, or waiting for prices to
fall before taking the plunge.
Game makers face new game costs of around $20 million for
the PS3 and Xbox 360 -- roughly double the previous price --
and some are holding off such investments until there is a big
enough audience to justify the expense.
As publishers cover their bets, they also are leveling the
competitive landscape by forgoing exclusives in favor of
turning out the same title for both the PS3 and the Xbox 360.
Goodman predicted that by 2011, Sony will control 45
percent to 50 percent of the U.S. console market, but that
Microsoft will significantly narrow the gap with projected
share of 38 percent to 48 percent.
"Every time you enter a console transition it's an
incredibly competitive time. This is the point where market
share is up for grabs," Goodman said.
The information reported above is property of Yahoo! inc. and reprinted or modified with legitimate permission.