Have any of you actually seen the prices on an XBox 360 or the constantly-delayed Playstation 3? Charging $600 for a game console seems to be taking excess to brand new heights. The real lunacy is that even at those prices, both consoles are being sold at a large loss, anywhere from $100-300 per system depending on whose numbers you believe.
I can understand why they're so expensive. They support next-generation HD-DVD and Blu-Ray technology, have enough processing power to decode human DNA, and come with a list of checkbox features that will make your head spin. The problem with these systems, though, is typical of a company that thinks cool technology will sell itself. They are concentrating so hard on having the coolest "gee whiz" technology that they forget to ask a fundamental question: are these systems any fun to play?
Nintendo is on-track to take back the console crown that it lost to Sony well over a decade ago with the launch of the Playstation. They pretty much fudged the whole market when Square, maker of the wildly-popular Final Fantasy games, defected to the Playstation instead of making their games for the Nintendo 64. While Mario, Zelda, and Metroid are popular franchises, it wasn't enough for Nintendo to maintain the lead.
Nintendo spent a lot of time brooding and learning. The NES and SNES systems had multiplayer games, but the N64 is what brought it to a new level with up to 4 players. You can't even mention the N64 to a gamer without them saying "man, I can remember having so much fun playing GoldenEye with all of my roommates." Nintendo took that lesson learned and applied it to the GameCube, making a wide variety of fun 4-player games that even my non-gamer wife enjoys. (Crash Team Racing, by the way, it a blast to play.)
Nintendo also learned something else from Sony and Microsoft: losing money on the console may be an option when you have lots of cash laying around from other businesses, but it's not a good idea if your sole business is consoles. In fact, Nintendo is going to sell the upcoming Wii console for $250 a unit and still make money. That undercuts the XBox 360 by at least $50 and is less than half the cost of the Playstation 3.
More importantly, games on the Wii will be fun. Everything I've been hearing about their new controller makes it sound like the cat's meow. It looks like of like a remote control and has a gyroscope in it. Move the controller and something in the game will move as well. Can you imagine how much more fun a tennis or baseball game will be if you can swing the racket and make the pitches like you normally would? The Wii is also going to cash in on Nintendo's biggest asset: the huge library of games. You'll be able to purchase and play any game ever released for any Nintendo system using your Internet connection. Have a thing for GoldenEye? Buy it and be playing it within minutes. Have some nostalgia for a good game of Bubble Bobble? Your Visa will take you there.
What can Microsoft and Sony promise? About the only thing Microsoft has going for it is Halo and you have to be a total lunatic to drop over $350 for a single game. Sony can't claim that it has the Square deal since they started releasing Final Fantasy games on the Gameboy and Gamecube several years ago. Both Microsoft and Sony have problems with their games costing upwards of $70-80 a pop while taking years to develop because of the incredible complexity involved in programming for these living room supercomputers. At the end of the day, are you getting a better deal from a $250 Wii with tens of thousands of games you love to play for several dollars each or a $600 Playstation 3 with $80 games that might lose your interest in a few weeks? I think that answer is now obvious.
But what about the hand-held market? Nintendo has always held tightly to the portable gaming market, effectively crushing competition from the Sega GameGear and TurboGrafx TurboExpress. The Playstation Portable, however, is having a hard time cracking Nintendo's market, with PSP sales expected to decline while Nintendo can't make enough Nintendo DS units. Microsoft can't even come up with a portable strategy, but their late-to-the-party business model should be no surprise. This is the company that was blindsided by Netscape with Navigator, Sony with the Playstation, and Apple with the iPod within a decade.
Nintendo is all set to take back the market. Not with snazzy new graphics, slick advertising, or exclusive deals with publishers. No, it's going back to the basics of good console-making: keep it cheap, make fun games, and be simple. While Microsoft and Sony duke it out to be "the center of the digital living room", Nintendo is stealing back the gaming crown it has lost so long ago. If Sony and Microsoft don't wake up to this, they're both going to go the way of Sega.