BusinessWeek on Next Xbox and PlayStation 3 (DM will like)

Microsoft Plays Video Leapfrog

Its next version of Xbox could be early to market. Will that give it a leg up on Sony?

For the past few years, Microsoft Corp. (MSFT ) has vowed not to give Sony Corp. (SNE ) a head start in the next generation of video game consoles. It's a lesson Microsoft learned the hard way. Sony's PlayStation 2 had a 20-month jump on Microsoft's Xbox, which launched in November, 2001, and rode that lead to a 69% market share. Microsoft started work on the next version of Xbox right after the original shipped, to be ready when the next console cycle began. Said Microsoft's Xbox boss, Robert J. Bach, in a recent interview: "We'll be there when Sony is there."


Turns out he may have been underplaying his hand. BusinessWeek has learned that Microsoft is planning to launch the next version of Xbox, code-named Xenon, in time for the holiday season in 2005, shaving a year off the typical five-year console life cycle. And while a Sony partner says the Japanese company is aiming for the same launch window, game developers say Sony hasn't yet nailed down the key technical details of its next PlayStation. Without that data, developers can't begin coming up with games, which typically takes 18 months.

While Sony will not publicly discuss launch plans, developers believe PlayStation 3 will likely land on store shelves in Japan in the spring of 2006, and in North America six month later. If they're right, Xbox could hit the market as much as a year ahead of its biggest rival -- giving Microsoft a big advantage. Says David Cole, an analyst with researcher DFC Intelligence: "That could push Xbox into the lead."

The reason: Content is king in the game business, and hitting the shelves first would help Xbox bring out hot new games ahead of Sony and Nintendo Co., which says it will launch its next model when the new PlayStation comes out. PlayStation 2's early hits with such games as Gran Turismo 3: A-Spec and Grand Theft Auto 3, launched while Microsoft and Nintendo were finishing their consoles, put those rivals in a hole from which they've never emerged. That lead fed upon itself. Gamers bought PlayStation 2 because it had the best content, and developers made more games for it because it had the most users. If Microsoft can grab an early lead in the next round, it could displace Sony as gamers' top pick.

Microsoft is leaving little to chance. Eager to lure developers to Xbox, it is making it cheaper and easier for them to write games. Many once leery of working with the software giant now say they're eager to develop games for Xenon. "We can't believe this is Microsoft," says one.

For now, sony is a study in contrast. The company turned up the hype three years ago, announcing plans with IBM (IBM ) and Toshiba Corp. (TOSBF ) to create a low-cost chip to power the console, called Cell, that can run circles around today's supercomputers. But developers have since learned little about the new technology, making it tough to start creating games for the next PlayStation. "It's a big Achilles' heel for Sony," says Jack Sorenson, executive vice-president for worldwide studios at THQ Inc. (THQI ), the No. 2 independent video-game publisher. "They can't unload the specs on us and expect to have good games at launch." Sony spokeswoman Molly Smith will say only that PlayStation 3 will launch when ready, regardless of "competitive movement."

Sony execs believe the current PlayStation has plenty of life left and that there's no need to rush out a new console. The numbers say different. On Apr. 27, Sony reported that fiscal year revenues in the video game unit, which had been a bright spot in its recent lackluster results, fell 18%, to $7.5 billion. Sony estimates it will sell a third fewer PlayStation 2s in the current fiscal year.

It's far too early to project a winner in the next generation. But in this race, Microsoft may have a shot at lapping the competition even before the starter's gun is fired.

http://www.businessweek.com/magazine/content/04_19/b3882048.htm
 
I think MS is likely to launch Xbox 2 a lot earlier than PS3. XNA demos have been shown and I guess the key developers have already started work on their Xbox 2 launch games. The XNA crash demo will probably be turned into a game. Hideo Kojima said in a recent interview that he knows nothing about PS3 so it seems Sony is lagging in this area.

Even if MS launched early with quality games it wouldn't be enough to gain market share from Sony, buyers would wait and see if the PS3 is a better product- DC all over again.
 
Microsoft may be in position for a Genesis-like steal of the next-generation market. Launching early hasn't always worked out in this industry, but MS has successfully made the Xbox a mainstream product and will be strengthening that focus right from the start of the next round instead of wandering around for new markets like the headstarted Dreamcast tried (online pioneering; broader game concepts like Seaman, Space Channel 5, Jet Set Radio). From its inception, the Genesis was focused unflinchingly to topple the mighty Nintendo with mass market action games, sports titles, and edgy content; MS will inevitably assault head-on with the promise of franchises like Halo and the strength of a line-up of flashy games.

And unlike with Dreamcast, MS will have more than enough resources to push hard until the end and never let up its pressure.

Sony obviously will carry a lot of mindshare, but MS's game plan from last time had a lot more room for improvement comparatively - being that it was their rookie effort - and therefore should enable them to get a fairer share of the market.
 
The Megadrive/Genesis analogy may very well turn out correct. Will PS3 correspond to SFC/SNES? That is, being a runaway success in Japan but having some difficulties to overtake Xbox 2 in the US.
 
The scenarios presented are possible. Right now I'm just wondering if any thing at all will be talked about atE3. And isn't Sony suppose to have an annual investors meeting around May where detailed readmaps and plans are shown?
 
Lazy8s said:
Microsoft may be in position for a Genesis-like steal of the next-generation market. ... MS will inevitably assault head-on with the promise of franchises like Halo and the strength of a line-up of flashy games.

And unlike with Dreamcast, MS will have more than enough resources to push hard until the end and never let up its pressure.

Lazy, no doubt does MS have the RESOURCES to launch early, but do they have the SOFTWARE? Companies are still concentrating on the current hardware, and as witnessed by Half-Life 2, Doom3 and Duke Nukem 4, making games today can take a VERY long time, and certainly longer still with a next-gen hardware platform. Time MS may not have if they're aiming at a 2005 release, unless they're willing to shlep out a bunch of rushed, unpolished launch titles.

and therefore should enable them to get a fairer share of the market.

"Fairer"? :LOL: Since when is anything in a market economy about being fair? ;)
 
MS needs blockbuster launch games in each genre. They'll definitely have a FPS, racing, and fighting, sports. They'll need a really good RPG for the Japanese market. If they have something for everyone and not just the hardcore early adopters, they'll gain considerable momentum. I also think MS should bundle Xenon with a high definiton DVD demo movie disc encoded with VC-9.
 
But doesn't an early launch yield any problems? Given Halo 2 isn't even out yet, I doubt that they could have a sequel out on launch if it ends up to be that early. If anything, I would think that most big titles will be probably launched close around the timeframe when PS3 ships, but still might have a great advantage depending on what Sony can bring out on launch-day in terms of software. Being Sony though and in the know that Microsoft has the headstart, I would certainly hope it's something big. Perhaps not Gran Turismo, but at least something to get the hype really started.
 
Phil said:
But doesn't an early launch yield any problems? Given Halo 2 isn't even out yet, I doubt that they could have a sequel out on launch if it ends up to be that early. If anything, I would think that most big titles will be probably launched close around the timeframe when PS3 ships, but still might have a great advantage depending on what Sony can bring out on launch-day in terms of software. Being Sony though and in the know that Microsoft has the headstart, I would certainly hope it's something big. Perhaps not Gran Turismo, but at least something to get the hype really started.


I think we both know that all Sony has to do is announce they have GT5 in the works, and that it will be exclusive, together with some other big exclusive names and they're done. Look how long it took for PS2 to get GT3 or MGS2. Did that delay hinder the sales? Hell no! People will still buy the thing, whether it has the games or not, just because they KNOW the good games will eventually come out. Then when they DO come out, million other little geeks will go out and buy the system.

MS can announce Halo3... Or some other PC fps's... Nothing PS3 will not get eventually, unless we are really to believe that HL2 and Quake4 will be exclusive to Ms's console... I find it very hard to believe.
 
I agree London-Boy, though I refuse to think that Microsoft in comparable with how Sega went its way with Dreamcast in that year before PS2 launched (Btw, not suggesting you are, just thinking out loud). Microsoft, despite their losses with Xbox, have been able to build up a fanbase centered around their console and will surely get things rollin' even further until they launch Xenon. The point is, I think Xbox has been able to appeal to the casual consumer far more effective than Sega was ever able to. This will make quite a difference IMO. Microsoft knows how to play the hype game as well and they will certainly play it well to make everyone believe that their console is everybit as powerful as the PS3 and that they will have all the content anyone would possibly want. Either way, PS3 a year later could be tough for Sony, if Microsoft plays their game well.

One thing I am not sure though, is 'how well can Microsoft play their game'? Sure hype is an easy thing, but it's how well they can convince that their is some substance to their hype. I am especially talking about launch games: IMO Microsoft would have everything right if they manage to get their blockbusters out on launch day or just after. They need to get their audiance back on their console and most importantly, grab a fair shair of the market that are still playing their dusty PS2. They can only do that if they have the content, the graphics (compared to older generation hardware, that shouldn't be a problem) and the belief of the casual consumer that they have something that the PS3 won't deliver. If they can grab some of the PS2 known franchises, that will be a big plus.

All in all, it will be tough for both. If Sony really comes in a year after Xenon, PS3 will have to be very good and especially have their established franchises ready to go.
 
making games today can take a VERY long time, and certainly longer still with a next-gen hardware platform

every body seems to underestimate that.

From that article :
Without that data, developers can't begin coming up with games, which typically takes 18 months


BZZZT! wrong !
18 month ?,with next gen data requirements? this is what we should call a rushed game for sure .
 
MS will never go down like Sega did simply because MS has a virtually limitless supply of cash.

Personally, seen how things are progressing, i'll probably pick up N5. I missed out on Ninty goodies this generation, i think i won't make the same mistake again next time.
Too little is known so far about PS3, especially software-wise, to make a comment.
Nintendo always have the software side sorted out, even if N5 will only have Nintendo games, it will be good enough for me.

If Sony really does release PS3 one whole year after MS, then they better start the hype thing soon enough, and have good games at launch or it will be tough. Again, millions upon million will buy Sony anyway, just because they KNOW GT5 and probably the next FF games will eventually come out on PS3, but still, MS is a hell of a competitor, they know this and shouldn't sit on their asses the way they did with PS2.

They could afford to do whatever they wanted with PS2 and games simply because they had no competition for more than a year. The same will not happen next time so they better fasten their belts and go back to what they did during the PS1 days, when they did have competition.
 
Just because THQ doesn't have data to start making games for PS3, it doesn't mean some other developers haven't got it either.
Wasn't it in PS2 launch too, that Namco, EA and other selected developers/publishers had were way ahead of the others in launching impressive titles for PS2 launch.

I don't think Sony will launch any of their top profile games (FF, GT, GTA, MGS) in PS3 launch, or near it.
They want to keep the ace cards for later, to build up the hype and excitement. I wouldn't be surprised if at launch we'll see new versions of previous launch games Tekken, Ridge Racer and maybe wipeOut, plus something from EA and Insomniac + Naughty Dog, maybe even a new game from Guerilla (KillZone2), an EyeToy game (if the PS3 has the 'Eye' built in).
 
london-boy said:
...

They could afford to do whatever they wanted with PS2 and games simply because they had no competition for more than a year. The same will not happen next time so they better fasten their belts and go back to what they did during the PS1 days, when they did have competition.
Isn't that just about what they did with PS2 launch. IMO The launch strategies didn't differ very much between PS1 and PS2 (exept PS2 had 1000000000000 x pre launch hype).
If I remember correct, the PS1 launch was quite a low-key affair, with pretty mediocre launch games (Ridge Racer and Tekken (and WipeOut in European launch) were excellent, others I can't even remember)
 
rabidrabbit said:
Just because THQ doesn't have data to start making games for PS3, it doesn't mean some other developers haven't got it either.
Wasn't it in PS2 launch too, that Namco, EA and other selected developers/publishers had were way ahead of the others in launching impressive titles for PS2 launch.

I don't think Sony will launch any of their top profile games (FF, GT, GTA, MGS) in PS3 launch, or near it.
They want to keep the ace cards for later, to build up the hype and excitement. I wouldn't be surprised if at launch we'll see new versions of previous launch games Tekken, Ridge Racer and maybe wipeOut, plus something from EA and Insomniac + Naughty Dog, maybe even a new game from Guerilla (KillZone2), an EyeToy game (if the PS3 has the 'Eye' built in).


GT5 (just to name one) will come out "when it's ready" as usual. What worries me is that the gap between Xbox2 launch and "eventual" GT5 launch could become 2 years. GT3 came out a full year after PS2 launch. MGS2 after that. FF10 even later. Which is a lot to wait for a game. Many will wait, but many will also want a piece of "next-gen-eye candy" and that's where MS and Ninty need to focus. They need to convince people they do not need to wait for Sony's big names. I'm sure Ninty will be able to, with the software they keep on releasing, MS could be in trouble in that sense.
It will be interesting, from a business point of view, to see how MS will handle this.

Again, i think Nintendo will play it cool, like they have been doing for the last 10 years, knowing they have millions of fans that will buy their systems to play their games anyway, whatever happens.

Funny how it looks like Sony is the "wild card" now. The market leaders and everyone is waiting for them. MS included. It almost feels like Sony are dictating Xbox2 specs too, with MS basically waiting for Sony to come out with details on PS3 to finalise Xbox2 design (the comments about "If Sony has 512MB Ram, we will have 512MB Ram, if Sony has a HDD, we will have a HDD")... Interesting...
 
Ridge Racer VI at PS3 launch would sell me one! I'm starved for proper arcade racing. The Xbox Outrun 2 conversion will easen the pain a bit, but it's still a much inferior game to RRV.

It's just too bad that RRV got surrounded by such a negative hype. Perhaps the franchise has lied fallow long enough in time for PS3 launch to get a fair judgment. Here's to hope..

Oops, strayed a bit off topic here. :oops:
 
VNZ said:
Ridge Racer VI at PS3 launch would sell me one! I'm starved for proper arcade racing. The Xbox Outrun 2 conversion will easen the pain a bit, but it's still a much inferior game to RRV.

It's just too bad that RRV got surrounded by such a negative hype. Perhaps the franchise has lied fallow long enough in time for PS3 launch to get a fair judgment. Here's to hope..

Oops, strayed a bit off topic here. :oops:

Very much off-topic, but i'll comment on this.
RR5 was a fun game, but flaws and general lack of polish made it an average game. All the launch games were rushed, and RR5 showed this a lot.
When you have a look at other arcade racing games released this generation, RR is the last of my worries. Personally, the first system that gets Burnout4 (or will it be 5 by then?) will be the system i buy.
 
To me no arcade racing game has been able to make me achieve that 'zone' state of mind, as Ridge Racer games have (not including that latest R-Racing Evolution, which really isn't a RR game at all).

Though you can not call the handling in RR games realistic, or even comfortable (it takes time to get used to it) but after you get the hang of it, the combination of great tracks, music and total consentration makes me one with the game as no other games have been able to.

Edit: Still, I do get bored of the RR games before I am able to unlock all the cars etc. And at later stages it just goes beyond my gaming capabilities :)
 
london-boy said:
Funny how it looks like Sony is the "wild card" now. The market leaders and everyone is waiting for them. MS included. It almost feels like Sony are dictating Xbox2 specs too, with MS basically waiting for Sony to come out with details on PS3 to finalise Xbox2 design (the comments about "If Sony has 512MB Ram, we will have 512MB Ram, if Sony has a HDD, we will have a HDD")... Interesting...
Timing is everything in this game. Sony will do everything to time (and formulate) their final spec in order to strike panic into the other console makers, officially kicking off their hype machine in the process. Being the first console out, Xenon/Xbox2 is very vulnarable for thunder-stealing Sony PR at launch.

It will all be very amusing to watch. I'm all pumped up for next-gen! :D
 
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