Future Trends
As I have briefly mentioned in the introduction, console-based games are now becoming more and more online. The consoles themselves are platforms to connect people in a global scale. Compatibility may become a problem since the big manufacturing companies (Sony, Microsoft and Nintendo) are not currently able to communicate to one another in the realm of online games. Today, customers are restricted to their chosen console which has its own community.
For instance in the next-generation consoles, we have Microsoft’s XBOX Live, Nintendo’s Wi-Fi Connection, and Sony’s Playstation Network. Each represents a source of revenue stream that could provide one an advantage over the other. Having collaboration among these three networks alone is going to benefit the industry as people do not have to choose sides, and are able to “talk” with one another regardless of the console. Therefore, having one online community instead of multiple is the way to go. I do not see this happening in the near future because of the stiff competition and big egos these companies have.
Console hardware is constantly becoming a mini multimedia center, offering more functionality other than just playing games (just look at the next-generation consoles). With the ability to have internet access, the consoles have become a tool for people to socialize and relax at the same time. You can get almost anything at your heart’s desire in the internet.
The online communities in the console world are also steadily increasing. Although this online model is still a fairly new concept to most console owners, I believe that it is the direction the industry is heading towards in general. The console segment will have an overlap with online gaming and PC gaming due to the reach of internet. Game developers and publishers will lean toward multi-platform online games as there are more market shares to grab in this segment rather than the generally offline console games.
Future of the global video game industry is very bright with a growing consumer base and interconnection around the world. The internet has become a platform for the industry to expand. Console, PC, and online games will all converge to become, well, online. Humans are social creatures, so it is just natural to have more interaction in video games. There is bound to be some cultural differences when such globalization takes place, and the game industry is not an exception. Even though online is the future of gaming, people still come from various nationalities and backgrounds and each has his/her own expectation. Adapting to each other is the key success factor in having a thriving game industry.
Saturday, April 28, 2007
Friday, April 27, 2007
Video Game Industry: The Consoles (Part 3)
Business & Revenue Models
When it comes to the video game industry, most of the revenues come from sales of hardware game consoles and the software themselves. This is obviously the main revenue stream for game companies, but they are beginning to capitalize in other industries as well. Nowadays, more and more companies are advertising via popular game titles. The movie industry is also heavily impacted with games being converted into movies and vice versa. Even the stock market has been invaded by video game stocks. We will see how companies can utilize these new revenue generators, and whether they are capitalizing on them.
First, let us take a look at advertising in video games. Online games are the hotbeds for advertising. They have a large amount of audience which is still growing at a fast rate. The amount of exposure that advertising companies can get is infinitely large if they choose the proper games to advertise their products. Offline games should not be left out as well. Merchandising companies like Nike and Reebok advertise frequently in multi-platform games like NBA Live and FIFA Football. These games could either be online or offline. This article gives you a sense of the new channel in advertising for major companies to consider.
Since the turn of the millennium, there has been a trend of games converted into big budget movies and the other way round. Past efforts to do game to movie conversions were not considered successful due to the lack of technology, resulting in poor receptions by movie goers and critics. Now, game movies have a decent chance to succeed because of superior technology. Movie studios will be more willing to take on game-related projects. As we can see from the all time best game-based movies list, it contains mostly of game franchises such as Pokemon and Tomb Raider. The public has to be able to relate to the characters in these video games. However, these adaptations are still not selling enough to compete with the mainstream movies. Video games have a long way to go in the box office.
Another way to earn revenue for game companies is to become publicly traded companies. The stock game is not one I will want to mess with if I was one of the game companies. The stock market is too unpredictable and unstable for companies to earn profits. In this article, it states that 2007 may be a rough period for video game stocks. From my perspective, only the big companies like Microsoft and Nintendo are able to play in this field. They have the resources to take risks and gain enough in the process.
The big question for the players in the video game industry is: which channel should I choose to be most profitable. Game developers, publishers, and console manufacturers can each have a slice of the pie if they do it right. There are licensing fees to be gained from advertisements and movies. Stocks can earn a plenty in a good day. In retrospect, companies have to do their due diligence before committing to one of the aforementioned channel. Know your own limits and capacities so that you are not regretting your actions later.
When it comes to the video game industry, most of the revenues come from sales of hardware game consoles and the software themselves. This is obviously the main revenue stream for game companies, but they are beginning to capitalize in other industries as well. Nowadays, more and more companies are advertising via popular game titles. The movie industry is also heavily impacted with games being converted into movies and vice versa. Even the stock market has been invaded by video game stocks. We will see how companies can utilize these new revenue generators, and whether they are capitalizing on them.
First, let us take a look at advertising in video games. Online games are the hotbeds for advertising. They have a large amount of audience which is still growing at a fast rate. The amount of exposure that advertising companies can get is infinitely large if they choose the proper games to advertise their products. Offline games should not be left out as well. Merchandising companies like Nike and Reebok advertise frequently in multi-platform games like NBA Live and FIFA Football. These games could either be online or offline. This article gives you a sense of the new channel in advertising for major companies to consider.
Since the turn of the millennium, there has been a trend of games converted into big budget movies and the other way round. Past efforts to do game to movie conversions were not considered successful due to the lack of technology, resulting in poor receptions by movie goers and critics. Now, game movies have a decent chance to succeed because of superior technology. Movie studios will be more willing to take on game-related projects. As we can see from the all time best game-based movies list, it contains mostly of game franchises such as Pokemon and Tomb Raider. The public has to be able to relate to the characters in these video games. However, these adaptations are still not selling enough to compete with the mainstream movies. Video games have a long way to go in the box office.
Another way to earn revenue for game companies is to become publicly traded companies. The stock game is not one I will want to mess with if I was one of the game companies. The stock market is too unpredictable and unstable for companies to earn profits. In this article, it states that 2007 may be a rough period for video game stocks. From my perspective, only the big companies like Microsoft and Nintendo are able to play in this field. They have the resources to take risks and gain enough in the process.
The big question for the players in the video game industry is: which channel should I choose to be most profitable. Game developers, publishers, and console manufacturers can each have a slice of the pie if they do it right. There are licensing fees to be gained from advertisements and movies. Stocks can earn a plenty in a good day. In retrospect, companies have to do their due diligence before committing to one of the aforementioned channel. Know your own limits and capacities so that you are not regretting your actions later.
Video Game Industry: The Consoles (Part 2)
Competitive Dynamics
Game developers, or the software producers, are mainly concerned with competition in their specific genres. Whether it is a role-playing game (RPG) or a fighting game, it is unlikely that competitions will cross over. This is because they have different customer demand for each genre. For instance, RPGs demand better graphics while fighting games concentrate on the game play. Therefore a developer has to look at the game’s content (story and game play), quality produced (graphics), and customer loyalty in their respective genres to take full advantage of the competition. The race for game development is always wide open with the various genres, but those with loyal fan bases will have the upper hand. Developing franchises like the Mario series is not an easy task since you have to keep consumers from being bored over a long period of time. Customers will not buy games that are similar in nature, and they are always looking for something new and innovative from one game to the next. Franchises are, therefore, difficult to maintain.
Game publishers are constantly looking for titles that have potentials to be great hits. They use brand names and reputations to sell their published products. Publishers must have good game developers in order for the games to be more marketable to the public. Thus, constant and careful evaluation of their developers’ creativity, consistency, and use of technology is crucial. Electronic Arts is a good example with its successful Madden NFL and NBA Live franchises. It has its own internal developers which can easily communicate information to its own publisher, EA Sports. Having everything internal is a great advantage for Electronic Arts and it propels the company to be the top publisher as mentioned in the first post.
Console manufacturers differentiate itself by technical capacities, price, and game titles available in the console world. In 2007, the battle for supremacy among game console manufacturers is primarily between Sony’s Playstation 3, Microsoft’s XBOX 360, and Nintendo’s Wii (view comparisons here). They are still at the beginning stage of the next-generation console war. The latest global sales of next-generation consoles indicate the rapid growth of Wii sales while XBOX 360 and Playstation 3 are cooling off.
Nintendo’s Wii capitalizes extremely well as it provides more interactivity and a whole new gaming experience. These features are boosting Wii’s sales and it is separating itself apart from the competition. In the meantime, Microsoft is trying to maintain its lead by releasing an upgraded version of the XBOX 360 called the XBOX 360 Elite. Such a move is questionable since consumers who have already owned an XBOX 360 is not likely to spend more on unnecessary functions. Sony has not made a news-breaking move yet to enhance its sales, but I bet that it is counting on the game titles to sell its machines. Sony’s Playstation series has always had strong software to support its system dating back since its original release in 1995. Whatever the cases maybe, I think that the Wii holds the upper hand because of its fresh approach to console gaming, and it has given consumers all over the world an eye-opening experience.
Game developers, or the software producers, are mainly concerned with competition in their specific genres. Whether it is a role-playing game (RPG) or a fighting game, it is unlikely that competitions will cross over. This is because they have different customer demand for each genre. For instance, RPGs demand better graphics while fighting games concentrate on the game play. Therefore a developer has to look at the game’s content (story and game play), quality produced (graphics), and customer loyalty in their respective genres to take full advantage of the competition. The race for game development is always wide open with the various genres, but those with loyal fan bases will have the upper hand. Developing franchises like the Mario series is not an easy task since you have to keep consumers from being bored over a long period of time. Customers will not buy games that are similar in nature, and they are always looking for something new and innovative from one game to the next. Franchises are, therefore, difficult to maintain.
Game publishers are constantly looking for titles that have potentials to be great hits. They use brand names and reputations to sell their published products. Publishers must have good game developers in order for the games to be more marketable to the public. Thus, constant and careful evaluation of their developers’ creativity, consistency, and use of technology is crucial. Electronic Arts is a good example with its successful Madden NFL and NBA Live franchises. It has its own internal developers which can easily communicate information to its own publisher, EA Sports. Having everything internal is a great advantage for Electronic Arts and it propels the company to be the top publisher as mentioned in the first post.
Console manufacturers differentiate itself by technical capacities, price, and game titles available in the console world. In 2007, the battle for supremacy among game console manufacturers is primarily between Sony’s Playstation 3, Microsoft’s XBOX 360, and Nintendo’s Wii (view comparisons here). They are still at the beginning stage of the next-generation console war. The latest global sales of next-generation consoles indicate the rapid growth of Wii sales while XBOX 360 and Playstation 3 are cooling off.
Nintendo’s Wii capitalizes extremely well as it provides more interactivity and a whole new gaming experience. These features are boosting Wii’s sales and it is separating itself apart from the competition. In the meantime, Microsoft is trying to maintain its lead by releasing an upgraded version of the XBOX 360 called the XBOX 360 Elite. Such a move is questionable since consumers who have already owned an XBOX 360 is not likely to spend more on unnecessary functions. Sony has not made a news-breaking move yet to enhance its sales, but I bet that it is counting on the game titles to sell its machines. Sony’s Playstation series has always had strong software to support its system dating back since its original release in 1995. Whatever the cases maybe, I think that the Wii holds the upper hand because of its fresh approach to console gaming, and it has given consumers all over the world an eye-opening experience.
Video Game Industry: The Consoles (Part 1)
Readers, welcome back to my blog. This week I have decided to take a break from the topic of format war, and introduce you all to the world of console gaming. After all that battles, I think that we deserve a little time off, don’t you? For the topic of video game consoles, there are a lot of areas to be discussed. This is despite the fact that console gaming is only a segment of the entire video game industry. As a result, I am now splitting into four major areas: Introduction, Competitive Dynamics, Business & Revenue Models, and Future Trends. I hope that we are learning a little more from this segment of the hugely popular industry. Now, let us get started on our journey shall we. (Expect four parts to be posted separately for your convenience)
Introduction
The game console segment of the video game industry has evolved tremendously throughout its history. The first ever game console, the Magnavox Odyssey, was released in 1972. Later, the same developer created one of the most embraced and popular console games of all time, PONG. At that time, the console game came in various types of systems under different manufacturers and names. All of them played the same type of ping-pong game, although ATARI was the first ever developer. You could imagine the difference between that period and the current diversity of console games available. As such, console systems can presently be divided into two major categories. They are either classified as home systems or handheld systems. Unlike a personal computer (PC) which has various functions, game consoles are bought primarily and used solely for the purpose playing video games. This trend is definitely beginning to change as technology keeps on advancing (I will discuss this in the very last part in Future Trends).
Overall, the console segment accounts for $6 billion of the $30 billion global video game industry. In the United States, the console market is valued at $3.3 billion of the total $12.5 billion. The number of titles available for game consoles exceeds tens of thousands. Some of these titles are able to develop into franchises, and become crucial for game developers and console manufacturers alike as a selling point for their respective revenue streams. Some examples include Nintendo’s long-time running Mario and Pokemon series. As of the fall of 2006, they have each sold 193 millions units and 155 millions units worldwide (You can view Nintendo’s comprehensive sales here). Therefore, a good game can mean a difference between success and failure for the many players of the game console industry.
Talking about the players, they are also divided into several categories. There are the game developers, game publishers, and console manufacturers themselves. Game developers specialize on the software of video games, and can develop on one or multiple systems of the consoles. To be more specific, game developers can be further broken up into third-party developers, second-party developers and first-party developers. Game publishers, similar with book publishers, are responsible for their products’ marketing and manufacturing. They work extremely closely with game developers to ensure a smooth operation. Sometimes, they are even the same entity altogether (example: Nintendo). By the end of 2006, Electronic Arts become the top game publishers according to the Game Developer’s magazine.
Lastly, we have the console manufacturers themselves. These guys are more concerned with the hardware side of things. Currently, the main players are the big three of Nintendo, Sony, and Microsoft. Looking at the U.S. alone for console sales in the first quarter of 2007, we can infer who the major players in terms of console makers. Nintendo is doing extremely well with its Nintendo DS Lite and Wii consoles. If this keeps up, Sony’s stranglehold in the console market may just loosen up. Competition is certainly starting to heat up with the releases of the next-generation consoles as well as the game titles that come with them.
Introduction
The game console segment of the video game industry has evolved tremendously throughout its history. The first ever game console, the Magnavox Odyssey, was released in 1972. Later, the same developer created one of the most embraced and popular console games of all time, PONG. At that time, the console game came in various types of systems under different manufacturers and names. All of them played the same type of ping-pong game, although ATARI was the first ever developer. You could imagine the difference between that period and the current diversity of console games available. As such, console systems can presently be divided into two major categories. They are either classified as home systems or handheld systems. Unlike a personal computer (PC) which has various functions, game consoles are bought primarily and used solely for the purpose playing video games. This trend is definitely beginning to change as technology keeps on advancing (I will discuss this in the very last part in Future Trends).
Overall, the console segment accounts for $6 billion of the $30 billion global video game industry. In the United States, the console market is valued at $3.3 billion of the total $12.5 billion. The number of titles available for game consoles exceeds tens of thousands. Some of these titles are able to develop into franchises, and become crucial for game developers and console manufacturers alike as a selling point for their respective revenue streams. Some examples include Nintendo’s long-time running Mario and Pokemon series. As of the fall of 2006, they have each sold 193 millions units and 155 millions units worldwide (You can view Nintendo’s comprehensive sales here). Therefore, a good game can mean a difference between success and failure for the many players of the game console industry.
Talking about the players, they are also divided into several categories. There are the game developers, game publishers, and console manufacturers themselves. Game developers specialize on the software of video games, and can develop on one or multiple systems of the consoles. To be more specific, game developers can be further broken up into third-party developers, second-party developers and first-party developers. Game publishers, similar with book publishers, are responsible for their products’ marketing and manufacturing. They work extremely closely with game developers to ensure a smooth operation. Sometimes, they are even the same entity altogether (example: Nintendo). By the end of 2006, Electronic Arts become the top game publishers according to the Game Developer’s magazine.
Lastly, we have the console manufacturers themselves. These guys are more concerned with the hardware side of things. Currently, the main players are the big three of Nintendo, Sony, and Microsoft. Looking at the U.S. alone for console sales in the first quarter of 2007, we can infer who the major players in terms of console makers. Nintendo is doing extremely well with its Nintendo DS Lite and Wii consoles. If this keeps up, Sony’s stranglehold in the console market may just loosen up. Competition is certainly starting to heat up with the releases of the next-generation consoles as well as the game titles that come with them.
Tuesday, April 17, 2007
The Good Old Times: VHS vs. Betamax
Videotapes. They are one of the best viewing formats while I was growing up. I could remember watching Tom and Jerry episodes, and rewinding the tapes over and over to satisfy my cartoon needs at that time. Of course, videotapes are obsolete now with the digital technology age. However, we should not forget the past as they were the king of all formats during the 1970s and early 1980s. It was during this time that VHS by JVC and Betamax by Sony battled each other to win the videotape format war. This week, I am going to take you down memory lane and revisit one of the best wars of all times.
As we all recognized, videotapes are played in VCRs (video cassette recorders) and they have existed since the mid-1950s. Video recordings were a big phenomenon back then, and their developments had plenty of compromise and competitions along the way. In 2006, videotape recorder turns 50. It is important to have a sense of history as the early days paved the way for consumers like you and me to view videos at our own pleasure. Not to stray off topic with all the history, but this is what made the videotape format war possible.
First of, let us take a look at both the VHS and Betamax. The VHS by JVC was first introduced to the mass in 1976, which was a year later than Sony’s Betamax (in 1975). By looking at this, Sony should have a year of time in advantage to market Betamax. Betamax’s technical specifications are also superior compared to VHS’s in its various categories. However, this was not to be as several missteps in strategy happened.
The demise of Betamax was caused by various factors. The most glaring aspect of its downfall was its rental price. VHS offered a lower price than its counterpart, and was more affordable to the public than Betamax was. At that time, rental machines were popular because people did not want to spend thousands of dollars for technologies that may become obsolete. By the time Betamax had a reasonable price; VHS already had the majority of market share. Sony was also reluctant to sign licensing agreements with film studios, and refused any sorts of pornography to be released in its system. Fewer titles meant more power for VHS, and it quickly became the standard of choice for the mass. This article shows why Betamax was a failure despite its superior technology.
Let this be a learning experience for companies today that you have to have both the technology, and the entire consumer support. On top of that, the lack of marketing efforts to reach and appeal the consumers did not help. Solely focusing on your own technology does not guarantee a victory, and it could certainly lead to the neglect of the end consumers. Even today, we almost have mirror image of what had happened back in the 1970s. Sony’s Playstation 3 had a terrible launch compared to its competitors. Although the result is still too early to tell, it looked to be heading the same direction as Betamax. Sony, will you ever learn?
Now that I have taken you back in time, what do you think should we take from this battle?Personally, I think that corporations have the same root altogether. Technology will change and evolve, but their business philosophies and culture will be the same. After all, companies are proud of their origins and they make the companies what they are today.
As we all recognized, videotapes are played in VCRs (video cassette recorders) and they have existed since the mid-1950s. Video recordings were a big phenomenon back then, and their developments had plenty of compromise and competitions along the way. In 2006, videotape recorder turns 50. It is important to have a sense of history as the early days paved the way for consumers like you and me to view videos at our own pleasure. Not to stray off topic with all the history, but this is what made the videotape format war possible.
First of, let us take a look at both the VHS and Betamax. The VHS by JVC was first introduced to the mass in 1976, which was a year later than Sony’s Betamax (in 1975). By looking at this, Sony should have a year of time in advantage to market Betamax. Betamax’s technical specifications are also superior compared to VHS’s in its various categories. However, this was not to be as several missteps in strategy happened.
The demise of Betamax was caused by various factors. The most glaring aspect of its downfall was its rental price. VHS offered a lower price than its counterpart, and was more affordable to the public than Betamax was. At that time, rental machines were popular because people did not want to spend thousands of dollars for technologies that may become obsolete. By the time Betamax had a reasonable price; VHS already had the majority of market share. Sony was also reluctant to sign licensing agreements with film studios, and refused any sorts of pornography to be released in its system. Fewer titles meant more power for VHS, and it quickly became the standard of choice for the mass. This article shows why Betamax was a failure despite its superior technology.
Let this be a learning experience for companies today that you have to have both the technology, and the entire consumer support. On top of that, the lack of marketing efforts to reach and appeal the consumers did not help. Solely focusing on your own technology does not guarantee a victory, and it could certainly lead to the neglect of the end consumers. Even today, we almost have mirror image of what had happened back in the 1970s. Sony’s Playstation 3 had a terrible launch compared to its competitors. Although the result is still too early to tell, it looked to be heading the same direction as Betamax. Sony, will you ever learn?
Now that I have taken you back in time, what do you think should we take from this battle?Personally, I think that corporations have the same root altogether. Technology will change and evolve, but their business philosophies and culture will be the same. After all, companies are proud of their origins and they make the companies what they are today.
Friday, April 6, 2007
Digital Video Compression: A Four Way Brawl, Or Is It?
With a new week, comes another topic. Hello all, and pleased to have you on board for another go in the format war train ride. The topic this week is the digital video data compression format war. Most of us are familiar with the big four formats involved: Windows Media Video (WMV), QuickTime, RealVideo, and DivX. Of course there are others, but these four are the main players. This time, it is truly a party with four players trying to knock each other out. Or will someone else be able to crash the party?
I am sure that we all have used at least one of the mentioned products before to play a movie or listen to a song in our laptops or desktops. Most of us do not notice about the type of files or players being used as long as they deliver the desired contents. Except for technical specifications, digital compressed formats seem to have similar outputs. Here, you can see the various compression formats available including the big four. Based on those descriptions alone, I doubt that any of us have any preferences one over the other. This is where the problem lies when trying to decide a winner of this specific format war. It will be hard for customers to choose which one is the best and declare a winner.
Price is a non factor in the equation. All of them give consumers the option of free trials or buying one straight away. Consequently, the purchased proprietary licensed ones will have more functions than the free trials. Choosing one product over the other is entirely up to the customers, and it seems like we have an equally distributed market share. All the big four corporations have still gone strong until today.
Brand names may come into play to influence the customers. Microsoft’s Windows Media and Apple’s QuickTime might have an advantage over the others. However, as more and more people are becoming technology-savvy, the brand name factor is not going sway the momentum to Windows Media and QuickTime. RealVideo and DivX offer the same qualities, and they are continuing to build their respective brand images in the digital media industry.
Remember what I have mentioned in the beginning about a party crasher? Well here comes one. Adobe’s Flash might be the future of digital media compression. Look at Youtube or Google Video and how much success those two have had. In fact with the abundance of social network sites out there, people wants thing fast, cheap, and innovative. So far, the big four have not come up with a solution to stop this rampaging bull. If this trend keeps on going, Adobe’s Flash format may just come out of nowhere and just steal the show. This article shows us how the Flash player is quickly becoming the standard for digital media, and why it will eventually take over from the big four. (If you are interested, there is a second part to this article).
In the end, I think that Microsoft, Apple, Real and DivX are becoming victims of the constant advancement in technology as well as the people who are using it. Their products have not changed much from the day of their respective launches. Sure there have been upgrades in terms of functions and fixed-bugs, but they have not taken into account the human part in technology. It is the people who are using technology, and they do not want the same old thing over and over again. Adobe Systems and its Flash player are at the right place at the right time. It offers convenience to the growing internet population, and with that, they may have just won the war.
I am sure that we all have used at least one of the mentioned products before to play a movie or listen to a song in our laptops or desktops. Most of us do not notice about the type of files or players being used as long as they deliver the desired contents. Except for technical specifications, digital compressed formats seem to have similar outputs. Here, you can see the various compression formats available including the big four. Based on those descriptions alone, I doubt that any of us have any preferences one over the other. This is where the problem lies when trying to decide a winner of this specific format war. It will be hard for customers to choose which one is the best and declare a winner.
Price is a non factor in the equation. All of them give consumers the option of free trials or buying one straight away. Consequently, the purchased proprietary licensed ones will have more functions than the free trials. Choosing one product over the other is entirely up to the customers, and it seems like we have an equally distributed market share. All the big four corporations have still gone strong until today.
Brand names may come into play to influence the customers. Microsoft’s Windows Media and Apple’s QuickTime might have an advantage over the others. However, as more and more people are becoming technology-savvy, the brand name factor is not going sway the momentum to Windows Media and QuickTime. RealVideo and DivX offer the same qualities, and they are continuing to build their respective brand images in the digital media industry.
Remember what I have mentioned in the beginning about a party crasher? Well here comes one. Adobe’s Flash might be the future of digital media compression. Look at Youtube or Google Video and how much success those two have had. In fact with the abundance of social network sites out there, people wants thing fast, cheap, and innovative. So far, the big four have not come up with a solution to stop this rampaging bull. If this trend keeps on going, Adobe’s Flash format may just come out of nowhere and just steal the show. This article shows us how the Flash player is quickly becoming the standard for digital media, and why it will eventually take over from the big four. (If you are interested, there is a second part to this article).
In the end, I think that Microsoft, Apple, Real and DivX are becoming victims of the constant advancement in technology as well as the people who are using it. Their products have not changed much from the day of their respective launches. Sure there have been upgrades in terms of functions and fixed-bugs, but they have not taken into account the human part in technology. It is the people who are using technology, and they do not want the same old thing over and over again. Adobe Systems and its Flash player are at the right place at the right time. It offers convenience to the growing internet population, and with that, they may have just won the war.
Monday, March 26, 2007
The War: A Game in Disguise
Hello world and welcome back to the battlefield. Today I will be looking at the impact of format wars on the video game industry. This is a phenomenon that has shaped the fame and fortune of many game console companies today. There are two format battles that I would like to highlight in respect to the video game industry: Cartridges vs. Discs and the recent Blu-Ray vs. HD DVD. The latter has been thoroughly discussed in the last blog, so I will spare you the details and focus on the match between the consoles themselves (Playstation 3 and XBOX 360).
If memory serves me right, it was the year of 1996 when the dominating Playstation was challenged by the emerging Nintendo 64. With a release one year earlier in 1995, Sony’s Playstation definitely had the advantage of capturing the sixth generation console market.
The Playstation was definitely viewed as a system more suited for mature players while the Nintendo 64 still holds a family-oriented image. Playstation came with the optical disc (CD) format while Nintendo 64 had a built-in cartridge format. Herein lays the main difference between the two systems and how Sony was able to bowl through Nintendo.
First of all, we need to see what is inside of these two formats. Here, we have some basic information and identify why the CDs would be preferred than cartridges. Since cartridges have been the standard for most video game consoles until that point, it is not Nintendo’s fault to stick with it. CDs are much lighter, compact, and store more data than cartridges. As a new entrant in the video game market at that time, Sony had done its due diligence very carefully and was able to dominate the sixth generation market despite competitions from established players such as Nintendo and Sega. In fact, Sega pulled out of the video game hardware industry in 2001 and started focusing on software only.
As such, Sony and its Playstations (1 and 2) continued to dominate until Microsoft came in the picture and gave it some competition with the original XBOX. Things started to get interesting as people are demanding more high-definition products. In come the Playstation 3 (PS3) with Blu-Ray and XBOX 360 with HD-DVD.
What goes up must come down. Sony’s worst nightmare came true when they released the PS3 in 2006. Blu-Ray, still new to people’s tastes, did not help the sales of PS3 at all during its launch. Microsoft, with XBOX 360 released a year earlier in 2005, had done what Sony did to Nintendo with the Playstation ten years earlier. This video discusses whether the PS3 is a failure.
The outcomes of the high-definition format and current game console market are still uncertain as it is still too early. However, I do believe that the two will be positively correlated. It is either PS3 and the Blu-Ray or XBOX 360 and HD-DVD.
I think that the lesson learnt here is the importance of early customer exposure to the game systems and formats introduced by these various companies. Those who get first exposure are going to get an advantage while the competitions have to catch up. It is also important to do your due diligence before launching your consoles. Some people, including me, are still comfortable with the PS2. Who could blame them? The unpredictable factor of technology is still one thing that we have to consider before jumping ship to either the PS3 or XBOX 360.
If memory serves me right, it was the year of 1996 when the dominating Playstation was challenged by the emerging Nintendo 64. With a release one year earlier in 1995, Sony’s Playstation definitely had the advantage of capturing the sixth generation console market.
The Playstation was definitely viewed as a system more suited for mature players while the Nintendo 64 still holds a family-oriented image. Playstation came with the optical disc (CD) format while Nintendo 64 had a built-in cartridge format. Herein lays the main difference between the two systems and how Sony was able to bowl through Nintendo.
First of all, we need to see what is inside of these two formats. Here, we have some basic information and identify why the CDs would be preferred than cartridges. Since cartridges have been the standard for most video game consoles until that point, it is not Nintendo’s fault to stick with it. CDs are much lighter, compact, and store more data than cartridges. As a new entrant in the video game market at that time, Sony had done its due diligence very carefully and was able to dominate the sixth generation market despite competitions from established players such as Nintendo and Sega. In fact, Sega pulled out of the video game hardware industry in 2001 and started focusing on software only.
As such, Sony and its Playstations (1 and 2) continued to dominate until Microsoft came in the picture and gave it some competition with the original XBOX. Things started to get interesting as people are demanding more high-definition products. In come the Playstation 3 (PS3) with Blu-Ray and XBOX 360 with HD-DVD.
What goes up must come down. Sony’s worst nightmare came true when they released the PS3 in 2006. Blu-Ray, still new to people’s tastes, did not help the sales of PS3 at all during its launch. Microsoft, with XBOX 360 released a year earlier in 2005, had done what Sony did to Nintendo with the Playstation ten years earlier. This video discusses whether the PS3 is a failure.
The outcomes of the high-definition format and current game console market are still uncertain as it is still too early. However, I do believe that the two will be positively correlated. It is either PS3 and the Blu-Ray or XBOX 360 and HD-DVD.
I think that the lesson learnt here is the importance of early customer exposure to the game systems and formats introduced by these various companies. Those who get first exposure are going to get an advantage while the competitions have to catch up. It is also important to do your due diligence before launching your consoles. Some people, including me, are still comfortable with the PS2. Who could blame them? The unpredictable factor of technology is still one thing that we have to consider before jumping ship to either the PS3 or XBOX 360.
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