Who will flinch next?

[Gregory DG]

The three challangers are: Sony, Microsoft, & Nintendo.

 

Which of these three will get out of the hardware business next?

 

Sony: The market leader, lots of diverse games, several exclusives.

Microsoft: Hungry to take over the whole pie, gobs of cash reserves.

Nintendo: Longevity, hardheadedness, lots of good exclusive titles to draw from.

 

Anyone care to wager which of these guys will drop out first? It's gotta happen eventually, doesn't it?

[SteveW]

That's a hard decision to make. There's a lot of variables to consider. Nintendo's home console, the GameCube, is on shaky ground, although their portable consoles rake in the money. It depends on how well the Revolution does, if it's accepted by the gameplaying public, or if it finds a small niche in the industry.

 

The Xbox 360 is a huge financial drain on Microsoft, since each console costs a third more to manufacture than they sell it for. It's not going to do well in Japan, we already know that. So that's one potential market that it'll automatically fail in. And Microsoft does have huge cash reserves, but who knows how long the shareholders will let them keep losing money trying to conquer another market?

 

I don't see Sony giving up anytime soon. They won't give up on trying to take over the MP3 player market, even though the iPod has it sewn up. I think the PSP will get the axe first, since it isn't performing as well as they thought it would. But it'll be several years before that happens. I think Sony will stay in the home console market forever, just out of bloody-mindedness.

[Famicoman]

Very hard to determine. I say Nintendo. Now, I've been a fan of the Big N for a long time, but I remember sega coming out with all of these new concepts, and then failing because of them. Nintendo is doing some wierd stuff with their hardware, and I'm not sure how it will end up

[Clock]

I don't see any of them going anywhere soon, but if the PSP was more successfull (i.e. a lot less expensive and it could be), then that may have been enough to force Nintendo out, but that isn't the case.

 

Microsoft actually started making a profit from Xbox earlier this year so it's not as bad as everyone makes out.

 

The new 360 apparantly loses them $126 (premium pack) on every console sold in component value alone (add in labour, merchendising etc and it probably is a third). They will make the money back in Live subscriptions, Live content and games sold.

[liveinabin]

It'll be either Sony or Microsoft. Even with the niche market that Nintendo has, it's still massive and showing no signs of shrinking. I actually think Sony has the more rocky short term future, that isn't a well company.

[n8littlefield]

I would say either Sony or Microsoft. The thing is, Nintendo - unlike Sony and Microsoft, actually make a profit on every system they sell. Not only that, but Nintendo also sells alot of software with every system. Alot of the best games for the PS2 and Xbox were not made by Sony or Microsoft (Halo being the major exception). It seems that if Nintendo is making profit off systems, and likely the biggest selling developer on those systems, it will continue to do very well.

 

I would say the first to go will likely be Microsoft. They are losing massives amounts of money on hardware, and this early release will likely either make or break them as a console maker. I will say that no matter which company drops out of console manufacturing first, that they will do a Sega and keep publishing games afterwards (Sega becoming a 3rd party was a great thing, especially on the Gameboy/DS).

[JB]

The Xbox 360 is a huge financial drain on Microsoft, since each console costs a third more to manufacture than they sell it for. It's not going to do well in Japan, we already know that. So that's one potential market that it'll automatically fail in. And Microsoft does have huge cash reserves, but who knows how long the shareholders will let them keep losing money trying to conquer another market?

Actually, it's looking like they might register on the japanese consumer this time.

 

And the stockholders expect to see market growth. It's stupid, but current business logic is that if you aren't growing, you're dying.

Given the OS and office suite markets are almost exclusively MS products, they NEED to keep their games division open, just so they can have a market with ROOM for growth.

 

.

I don't see Sony giving up anytime soon. They won't give up on trying to take over the MP3 player market, even though the iPod has it sewn up. I think the PSP will get the axe first, since it isn't performing as well as they thought it would. But it'll be several years before that happens. I think Sony will stay in the home console market forever, just out of bloody-mindedness.

Everyone's staying in the MP3 player business. Sony's just following the rest of the pack there.

Also remember that Sony's based in Japan. iPod only has a 40% market share on their home turf.

 

 

 

I think the PS3 stands a good chance of being Sony's last system, if they screw it up as bad as it's sounding like they will.

I'll be pleasantly surprised if it ISN'T a disaster, though. I like competition.

[rockfistus]

I don't really think they're screwing anything up. I'm not a fanboy but I think most of the PS2 crowd(I'm Gamecube and PS2) doesn't care about online gaming....which is what most X-Box'ers make a big deal about....I've already got a computer and I use it for online gaming so the X-box doesn't win me over in that category. I like Sony's controller a hell of a lot better, I have no control at all in X-Box games thanks to that bulky wierd ass controller. I'll definitely be sticking with Sony and Nintendo, I just like their hardware better.

 

I haven't been keeping up lately though cause frankly I don't give a shit about the system wars.....So just for the sake of being informed, what exactly are Sony screwing up with the PS3?

Edited November 25, 2005 by rockfistus

[shep]

I don't know about who is gonna drop out first but I've been saying for awhile we are going to see a huge shift in the market leaders compared to the last gen of consoles (GCN, PS2, and Xbox)...I think Microsoft will be ahead this time around...they really hyped up this system well and they have stronger third party support than the first Xbox.

[JagFan422]

Sony and microsoft won't go anywhere, and Nintendo, despite how bad the Rev fails, will always have the portable system $$ wether it be a new Gameboy, the DS or whatever to fall back on.

[Atarifever]

Neither. At least, I hope not. I want the market to be broken up a little better between the three cmpanies, because three systems trying to offer different things is great. If I had to choose, I don't know. Microsoft has made a really hugh deal out of this launch and I think the narrow minded stock holders are going to get impatient to see profits. However, I think with the videogame industry as big as it is now, the more intelligent stock holders and people in charge of the company will still shout them down no matter what (remember, they lost money on the Xbox, but they went from not having a sytem to being second in the North American market in just 4 years with their first system, and that's a hugh buisness gain for any big company). Nintendo is obviously not an 800 pound Gorilla in consoles, but so what, they still turned a profit on every GC, so why would anyone give up on a profitable venture? That's like saying Wendy's is going to close up shop because it isn't McDonalds. They still have their fans, young gamers, gamers who want two systems, and anyone who likes the idea of the Rvoultion planning on buying their product next generation, along with the DS and GBA making money hand over fist. Sony has lost, if I remember correctly, 3/4 of it's stock value in a couple years, which is a hugh loss by any standard. However, the PS2 has only increased in importance and success for the company during that time. Sony may cut out some of it's less profitable buisness ventures, but they will spare no expense to save their cash cow. You can depend that the PS3 launch will make the 360's look quiet in comparison. With a fan base like theirs, they might see a decline in market share, but there's no way their going anywhere anytime soon.

Edited November 26, 2005 by Atarifever

[Room 34]

I will say that no matter which company drops out of console manufacturing first, that they will do a Sega and keep publishing games afterwards (Sega becoming a 3rd party was a great thing, especially on the Gameboy/DS).

971817[/snapback]

I wouldn't be so sure about that, at least with Sony. I haven't followed the PS2 closely, but does Sony actually produce ANY of their own games? I thought they strictly did the hardware and made all of the rest of their money on licensing for the system.

 

Microsoft does, I know, at least make a FEW games for the XBOX, so presumably they could start making their games for the other systems.

 

Nintendo seems like the most likely one to actually "pull a Sega," but as others have noted, just because they're in 3rd place (for consoles; they still rule the portable world) doesn't mean they're failing. To cart out the classic example (usually used in the "Apple is NOT about to die" debates), BMW has a relatively small niche in the car industry, but no one questions whether they'll be around in a year or two.

[sega saturn x]

I'm putting my money on microsoft failing. For a while I have thought the 360 would be big M last console. For one simple reason, they won't have anything going for now aside from an early launch. They won't be the most powerful, hell nintendo has already stated online will be free. And it would be a major shock to me if sony didn't do an over haul on their own online services after how mediocre this gen turned out in that arena.

 

And some one stated that it's good to have rivalry offering three different things. I agree with this, however we don't have three differnet things this gen we have two different things. We have nintendo sony and microsoft just making the sony stuff look pretty. It truly feels like 75% of all x box games are on the ps2. The reason I buy x box is because I hate the ps2 game pad and it has the worst everything from graphics to load times. And good old MS has screwed with a pad I feel didn't need any screwing with. Aside from the strange spot the black and white buttons were in I thougth the old x box controller was fine. Nice and comfy, though not quite as comfy as the cubes but I still liked it.

 

More so the 360 handling of playing x box games is just awful. The fact that you can't play all the games right out of the box is insane to me. But that's what you get when you sacrafice quality for an early launch. So lets look at it this way. The ps3 will ahve more or less the same games if the next gen is like this one. Only now they will look better than the 360, the x box had two saving graces beter looks and online play. It has already lost the first and there is no way sony would be dumb enough to allow their own online to go unchanged. That's just how I feel, i could be wrong.

[Agent X]

I wouldn't be so sure about that, at least with Sony.  I haven't followed the PS2 closely, but does Sony actually produce ANY of their own games?  I thought they strictly did the hardware and made all of the rest of their money on licensing for the system.

971905[/snapback]

 

They do make quite a lot of games for their own systems. Their biggest hit is the Gran Turismo series, but they've also got several others under their belts, like Twisted Metal, Wipeout, SOCOM, Jak & Daxter, Ratchet & Clank, and Sly Cooper. They've also released a couple of this year's best games in God of War and Shadow of the Colossus.

[cimerians]

Nintendo.

[shep]

I will say that no matter which company drops out of console manufacturing first, that they will do a Sega and keep publishing games afterwards (Sega becoming a 3rd party was a great thing, especially on the Gameboy/DS).

971817[/snapback]

I wouldn't be so sure about that, at least with Sony. I haven't followed the PS2 closely, but does Sony actually produce ANY of their own games? I thought they strictly did the hardware and made all of the rest of their money on licensing for the system.

 

 

I agree, Sony is definetley not one to just make software.

[J.Max]

Here's a quick analysis:

 

Nintendo - Not likely. They make too much money on their consoles, and at this point it doesn't matter whether they are the number one console manufacturer because they are always hugely profitable. They also have stated over and over that they will never exit the hardware business unless they are entirely out of business. Nintendo does things their own way and they don't care what everyone else does. Their consoles are designed to get their software into the marketplace and that's it. They have poor third-party support because in their business model it doesn't matter. All of you who think that Nintendo would ever consider pulling a Sega have never actually dealt with Nintendo. They are going nowhere.

 

Sony - Sony will never be a software only company because their business model is based on licensing fees and nothing else. They have also been the undisputed market leader for the past ten years and history has shown that consumers will continue to buy their product, no matter how bad it is. The Playstation is their number one money maker now, and even if they bungle one generation, they have more than enough money to keep them afloat for at least three more to get it right. Sony is going nowhere, and they are not above using nationalist rhetoric to keep MS down in Japan, including with Japanese developers.

 

Microsoft - My pick, for the company to exit first. Unlike the first two, the Xbox is not one of the pillars that the company is built around, and it has been a consistent money loser in the past generation. If this trend continues, MS stockholders will eventually have to force them out of making a new console. They are a public company, and that isn't good when you are losing money, especially if you are doing it on purpose. If the Xbox 360 is not as successful as MS anticipates, the entire Xbox line will be seen as a bad detour for the company and they will exit.

[shep]

 

Microsoft - My pick, for the company to exit first.  Unlike the first two, the Xbox is not one of the pillars that the company is built around, and it has been a consistent money loser in the past generation.  If this trend continues, MS stockholders will eventually have to force them out of making a new console.  They are a public company, and that isn't good when you are losing money, especially if you are doing it on purpose.  If the Xbox 360 is not as successful as MS anticipates, the entire Xbox line will be seen as a bad detour for the company and they will exit.

972013[/snapback]

 

The thing is, Microsoft knew they were going to lose money on the Xbox...they introduced it to the market to start splitting it up more and to get their name out there and built up the successor. As stated before, Microsoft has got plenty of money to throw around.

[shadow460]

I think Microsoft will drop out first, but they won't produce third party games.

I don't think Sony makes very many first party games. wipEout is/was a Psygnosis/bam! game, and Gran Turismo was made by Poylphnoy Digital. Early previews of GT1 clearly stated that Poly Digital has nothing at all to do with Sony, except for developing a game.

 

Anyway, here's why I think Microsoft will drop first: Their premium package is $400, in which you get some hardware that I doubt will be widely used. I feel like the ideal price point for launch is $300. I paid 2 for my first DC, and it just wasn't all that great. Most of the good systems have launched around $300 in whatever year's dollars.

I think the $400 launch price and being first of its generation crippled Saturn right out of the gate. I'd have had to be smoking crack to pay that for the system.

Being first gives the opposition time to tweak their systems to do something better. MS was wise to hold back the original xbox as long as they did--seeing that PS2 was a force to be reckoned with and DC was somewhat weak.

On top of that, $400 is a lot of cash to plunk down on the second place company's system.

I'd give $500 for the PS3, but it's like getting three systems in one. The PS2 still holds its own at $150, and the PS1 can be found for $25 or so. That means the actual PS3 will cost $325 when the price of the systems its compatible with is subtracted. However, Sony has a well established console. Microsoft, on the other hand, has been a little less than honest in the past. What's to say if I buy a 360, they won't force me to keep paying in just to play the games?

Then there's the hard disk. If you're going to have one (or any similar device), it needs to be in every console made. What's going to happen to Core owners when games come out that need the Premium hardware? That question stops me from buying the core system, and the absurd price stops me from buying the Premium.

Think of some "upgrades" that were made for each system. Less than 5 percent of all 2600 games utilize the exra memory in the Supercharger. Less than half a dozen N64 games are coded specifically for the Expansion Pak (although quite a few do use it if it's there), a handful of Saturn games use a memory upgrade, two games use the 64DD, less than five games use the PS2's hard drive, there were half a dozen NetLink games...add on hardware just doesn't sell games. Jack Tramiel may have seen this, but he took the concept too far by cutting additional hardware from the actual game carts. You can sell add on hardware with games, as long as it's inside the cartridge, or in some way invisible to the user.

Microsoft has missed this. You can't just tell a $300 system owner to "suck it up and upgrade" if they want to play the latest games. My response to "suck it up and upgrade" is "Eat me, and find another customer".

 

Sony won't go anywhere. They might slow down a little, they might even contract out some games to have the SCEA logo and play on someone else's system.

 

Nintendo may well drop out of the home console market after Revolution, but it'll stay firmly planted in the portables.

 

I expect Panasonic to make another bid into consoles with the next five years. If they half bake it, it'll still become a mildly successful console--I expect it'll be about as successful as the Saturn was.

If Panasonic does their next system right, it'll eclipse both Microsoft and Nintendo in the console market (won't touch the portables), and it'll become a close second to Sony, if not becoming number one.

It's only a matter of time, though, before Panasonic makes another system.

For a while, they were talking about making Gamecubes with a full sized DVD drive to allow movies to be watched on the system.

 

One thing that could make or break Sony: The controller ports. If three and four are USB again, it'll be a big mistake. I don't think USB has a place on a console unless you can use the same peripherals you have for your PC.

[JB]

It's only a matter of time, though, before Panasonic makes another system.

For a while, they were talking about making Gamecubes with a full sized DVD drive to allow movies to be watched on the system.

They weren't talking about it. They did it.

Was called the Q, and it was only available in Japan.

[shadow460]

I wonder if they will go hand in hand, then with someone on their next console, or if they [Panasonic] will do what they ought to and make a system of their own.

[Agent X]

I think Microsoft will drop out first, but they won't produce third party games.

I don't think Sony makes very many first party games.  wipEout is/was a Psygnosis/bam! game, and Gran Turismo was made by Poylphnoy Digital.  Early previews of GT1 clearly stated that Poly Digital has nothing at all to do with Sony, except for developing a game.

972039[/snapback]

 

Wipeout has always been a Sony property. It was originally developed by Psygnosis back in 1995, which was already owned by Sony at that time (since 1993). Sony initially gave Psygnosis some autonomy, which is why you eventually saw Wipeout games for Saturn and Nintendo 64, but Sony has since tightened the reins and absorbed Psygnosis into Sony Computer Entertainment Europe, so you probably won't see Wipeout on a non-Sony system anytime in the foreseeable future.

 

BAM only licensed the North American publishing rights to Wipeout Fusion. SCEE developed that game, and I believe they also published the game in Europe.

 

Polyphony Digital has been a Sony internal team for quite a long time, probably almost as long as Sony's been making video games. They did Motor Toon Grand Prix over a decade ago (when they were known as Polys), and they were a Sony team even back then.

[JB]

I wonder if they will go hand in hand, then with someone on their next console, or if they [Panasonic] will do what they ought to and make a system of their own.

972300[/snapback]

Probably just tag along on someone else again.

 

As I understand it, the 'Cube hardware license they used in the Q was partial compensation for Nintendo getting a discount on DVD drives.

Why risk diving into a fiercly competitive market when you can kick back and just sell drives instead?

[ATARIeric]

I dont think any of these companies will be out of the gaming market any time soon. We live on a planet big enough with a wide range of gamers for these 3 brands to stay in existence & I dont expect nintendo to ever close shop due to the large asian market to keep them straight for generations to come.

 

 

The world just doesnt revolve around americans

[J.Max]

I dont think any of these companies will be out of the gaming market any time soon.  We live on a planet big enough with a wide range of gamers for these 3 brands to stay in existence & I dont expect nintendo to ever close shop  due to the large asian market to keep them straight for generations to come.

 

 

The world just doesnt revolve around americans

972316[/snapback]

 

That's why I predict Microsoft will be out first. They will only be successful in the American market, and if they cant get a win there, they're screwed.

 

And I am aware that MS knew they were going to lose money on the Xbox...but they can't afford to do it twice. The Xbox is NOT their core business like the Playstation is for Sony or the console are for Nintendo. That's reason number one why MS will exit first.