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.