2006 E3 Expo News
E3 2006 Preview: The deadly showdown between consoles
and PCs
Scott Weiss
May 6, 2006
Los Angeles (CA) - All this week, the $31 billion global video
game industry will have the Hollywood spotlights shining exclusively
upon it, as even the old MGM Studios have been rented out
to help stage one of the biggest showdowns in the history
of the entertainment industry. The Electronic Entertainment
Expo officially commences next Wednesday, but Monday will
be high noon, as the second of the next-generation consoles
- Sony's PlayStation 3 - makes its world premiere.
Perhaps the number one question on gamers' minds come Monday
morning will be, will the PlayStation 3 transcend the $500
mark? With a Blu-ray Disc player on-board, the retail price
can't afford to go much lower - it's a poorly-held secret
already that manufacturers lose money on consoles anyway,
in order to make money on game software. But with consumer
sentiments wavering this year worldwide, and with disposable
income being drained by higher fuel prices, the final price
can't go much higher, either.
Can PlayStation 3 stick to $500?
Parks Associates' director of broadband and gaming analysis,
Michael Cai, told TG Daily this afternoon that $500 could
be the sweet spot for <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/#>Sony.
"I think the Xbox 360 was doing pretty good at the level
of $399," said Cai. "I think if Sony can control
it under $500, I think they should be successful, considering
it has a Blu-ray Disc there. The Blu-ray <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/#>DVD
player alone would normally cost $1,000. So consumers, especially
the savvy gamers, should especially see the value."
Potentially, Cai added, Sony's pricing scheme could maintain
the PlayStation 2's place in the market for the next few years,
by giving it a solid entry level price at around the $150
mark. "The PS2 will still be a factor in <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/#>hardware,"
said Cai, referring back to the successful PS2 pricing scheme
which enabled the PS one to live out a full life. "I
personally have friends who are saying they are so looking
forward to buying a PS2 now, because it's so much cheaper,
and also it's much slimmer than the one they had before."
Why Wii?
The number three player in consoles, Nintendo, successfully
stole its share of the spotlight last week, with the strange
yet somehow intriguing naming choice for its "Revolution"
console. Was "Wii" just a ploy for attention that'll
burn out by the end of the week? Michael Cai doesn't think
so; in fact, he believes Nintendo's move may have a streak
of brilliance to it. "Since Nintendo wanted to expand
the gamer audience to focus more on the moderate, casual gamers,
and re-invigorate the gaming-as-a-family experience anyway,
it might as well end up being a smart move."
Cai's reasoning goes like this: Only hard-core gamers knew
of the existence of the "Revolution" console by
that name anyway. The Wii name introduces Nintendo's console
to its true targeted market, which is made up more of parents.
For them, he said, Nintendo may need to distinguish itself
as more of a family-friendly brand anyway, and the "Wheee!"
notion sounds more like a roller-coaster ride than something
blowing up. Sure, the console was a revolution of sorts when
it was first announced, to those to whom it was announced.
"But casual gamers, and the moms who might make these
decisions to buy that platform, might not even know. They
might never have heard of ['Revolution']," he remarked.
For them, the former code name might not have given the proper
message.
Besides, Cai threw in for the heck of it, the Wii is no longer
a particularly revolutionary console, especially from a hardware
standpoint, stacked up against Xbox 360 and PS3. Perhaps -
just perhaps - the little remote controls could be considered
"revolutionary," but even the concept itself smacks
of war and revolt and all the things that moms won't invest
in. "Why would you want to call it 'Revolution,'"
he asked hypothetically, "if your <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/#>technology
is much less?"
Can Xbox 360 continue on cruise control?
With <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/#>Microsoft's
Xbox 360 selling more units in the last quarter (1.7 million)
than it did over the holidays (1.5 million), manufacturers
now producing on a more efficient schedule, and with supplies
now evening out, the first next-generation console is well
on its way to normalization. It was a spectacular premiere
after all, just delayed by several roadblocks. But with two
big acts that could upstage it, Microsoft has to put together
something fabulous - especially for its Tuesday morning rollout
event - that will keep Xbox 360 in the hunt, and in the news.
What would that be? Having Microsoft's own publicists report
on what the rumors are surrounding their client's own console,
is a bit like watching an infomercial on the energy benefits
of clean, natural coal, produced by the coal producer's association.
On the one hand, it plants just the right seeds in customers'
minds; on the other, it doesn't really give those seeds what
they need to germinate. Is it real, or is it wishful thinking?
The publicists are using the phrase "Console Evolution,"
though the description the publicists are giving is an indicator
that Microsoft isn't upgrading the console itself, so much
as adding peripherals to it. The big-ticket items appear to
be a likely HD DVD player and an add-on camera. But here is
where Microsoft could find itself between a box and a hard
place. Peripherals such as these might give an Xbox 360 "More
Valuable Than Platinum" edition a feature set more in
tune which what's expected for PS3, whose built-in Blu-ray
player was confirmed long ago. Yet with the company's Live
bundle (which features a year's subscription to Xbox Live)
already selling for around $600, Microsoft doesn't have much
room to play, if you will, with the price of an even more
feature-rich bundle, and still remain price-competitive with
PS3...unless that $500 mark was a ruse.
Microsoft could possibly mark down, or even eliminate, subscription
fees for certain tiers of Xbox Live service; but what would
that mean for customers who have already purchased subscriptions?
Even so, if a new HD DVD-endowed bundle (with the HD DVD player
hanging off the side, by the way) ends up selling for over
$900, what could historically have been written up as the
lead act in the next-generation console battle, could play
out as a failed follow-up act for HD DVD.
Console games and PC games go separate ways
A look at the <http://www.starpulse.com/news/index.php/2006/04/19/march_2006_game_sale_charts_npd>NPD
games sales charts for the month of March 2006 tells you everything
you need to know about how consoles and PCs are dividing like
drifting continents, with game genres split between them like
separate species. The weird hybrid of anime and Disneyland,
Kingdom Hearts II, took the lead spot again in the console
<http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page2.html#>sales
charts, with mainly action combat games - among them, mostly
first-person shooters - and sports titles following. Meanwhile,
the <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page2.html#>PC
games chart - whose titles now sell with one-third the quantity
- is dominated by simulated worlds and gothic role-playing,
with the add-on Sims 2: Open for <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page2.html#>Business
leading the top spot, and Sims 2 itself at #7. Interspersed
among them are all the major genre franchises we've come to
know, with the powerhouse <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page2.html#>World
of Warcraft clinching tightly to #5, Elder Scrolls IV: Oblivion
at #2, and Star Wars, Lord of the Rings, D&D, Age of Empires,
and Civilization IV all well represented.
Are PC games becoming a minor player? Not really, believes
Parks Associates' Michael Cai. While that continent may continue
to drift, he believes it's in a state of transformation, and
may yet have its just revenge. The secret is in the online
component. Consoles and console games dominate the retail
market today, he explained, and because of that, they command
the spotlight. But as the online business models for PC games
change, away from the "per-box" retail model and
more toward subscriptions, gaming-on-demand, and ad-subsidized
services (more on that later), the big franchise games and
role-playing simulations that are already well established
on the PC side, are perhaps best suited to these models. They
fit like a glove.
Welcoming the new business models to E3 this year could be
an absolute blitz of PC games franchises, all of which are
battling with each other for the biggest splash. I would say
there's a "blizzard" ahead, but that name's been
taken already. Blizzard's The Burning Crusade expansion to
WoW, expected at E3, actually will create an entirely new
continent, called "Outland," where one might find
a new race of so-called "blood elves." (Oh, you
never will believe where those Keebler cookies come from.)
Meanwhile, Namco - yes, the company that introduced the world
to Galaxian and Pac-Man - will actually try to knock WoW off
its throne, with its much-anticipated Warhammer: Mark of Chaos.
The company describes it as dealing particularly with "WAR,
focusing on the armies and battles while de-emphasizing the
tedious aspects of base and resource management." Which
should already win this title some followers at the Defense
Dept.
Sticking a finger in the notion that first-person shooters
are entirely migrating to console-based platforms, CryTek
is likely to demonstrate its even-more-perfected rendering
engine, in a demo of its upcoming sequel to Far Cry, entitled
Crysis. This is the game that should prove the viability of
Microsoft's DirectX 10 rendering library, due to become one
of the foundation components of its upcoming Windows Vista
<http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page2.html#>operating
system. The difference between DirectX 10 worlds and DirectX
9 worlds (for Windows XP), gamers are led to believe, will
be clearly visible.
But if the first-person shooter crowd is all gathering together
around consoles, and if shooter games are more adapted to
the retail model than the online sales model (How long can
a gamer go on subscribing to the right to keep shooting down
the same thing?), then could Crysis be less well received
among publishers and retailers than it's likely to be among
fans? This could be a bright comet of a game that burns out
fairly quickly, as franchise role-playing and strategy titles
such as Midway's Unreal Tournament 2007 appear well positioned
to command and conquer - to borrow a phrase - the resurrected
realm of PC gaming.
And there's one more little thing: While fans of the Star
Trek movies will happily remind you that it's generally the
even-numbered films that are the best, and the odd-numbered
ones that are as cursed as a red-shirted security officer
in a dark cave, they'll also tell you that there has never
really been a completely perfect Star Trek game, for any genre,
in the last quarter-century. So the question on at least some
people's minds at E3 (they'll be the ones in Starfleet uniforms)
is whether Perpetual's Star Trek Online - which is likely
to be previewed on Tuesday - will break this curse. Set 20
years after the last "Next Generation" movie, with
slightly updated ships, set decoration, and uniforms designed
under the direction of no less than Trek veteran artist Andrew
Probert, the screen shots of this MMORPG look perhaps even
more stunning than some of the odd-numbered films (Trek V
comes to mind). But with the promise of away-team exploration
of multiple worlds, and true 3D combat among fleets of starships,
manned by multiple live players simultaneously, the question
transcends whether this game will feel like a Trek movie,
and becomes whether it places the gamer in anything resembling
his understanding of the Trek universe.
The emergence of ad-supported online gaming
With PS3 stealing the spotlight on Monday, and <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page3.html#>Microsoft's
Xbox 360 and Nintendo's Wii (formerly "Revolution")
following up with subsequent world premieres on Tuesday, you'd
think E3 was all about consoles. But recent multi-million-dollar
investments, such as <http://www.tgdaily.com/2006/04/25/xfire_to_be_acquired_by_viacom/>Viacom's
$102 million buyout of in-game messaging firm Xfire, and Microsoft's
astonishing buyout just earlier this week of in-game advertising
firm Massive Inc., estimated at <http://www.tgdaily.com/2006/05/05/microsoft_gets_massive_in_video-game-ad_deal/>as
much as $400 million, suggest another set of dynamics is at
work: The <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page3.html#>PC
gaming market is in transition, as major media and software
companies are placing huge bets on gamers' receptiveness to
commercial messages during high-adrenaline online tournaments.
Their investments could change the entire <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page3.html#>business
model of PC gaming to something almost unrecognizable by just
the end of this year.
Conceivably, as expert gaming analyst Michael Cai of Parks
Associates tells TG Daily, a new, ad-subsidized PC <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page3.html#>online
gaming market could shift the focus of game development itself,
perhaps away from the "core" segment of tournament
games and first-person shooters, and toward two emerging segments,
both on opposite extremes: 1) massively multi-player games
(MMORPGs) that depend on the Internet connection which serves
as advertising's principal pipeline; and 2) casual games,
which take a moment or two of the player's break time, and
could very well be the new home for "breaks" of
a different sort.
"The online market is very dynamic and lively,"
Cai believes, "and there are a lot of new business models
emerging, generating new revenues." Because next-generation
consoles will rely on their Internet connections for consumer
services, they won't be left out of the loop. Thanks to <http://www.tgdaily.com/2006/05/06/e32006_preview_console_pc_showdown/page3.html#>World
of Warcraft, Cai said, MMORPGs have broken out into a huge
potential market - which we could see others capitalize on,
especially if Namco makes a splash with its much-anticipated
Warhammer: Mark of Chaos next week.
But the problem with gothic fighting games, we believe, is
the context they create: In mythical worlds, it's a little
hard to plant a billboard for Sprite or Nike. That's why "sim
worlds" of the kind featured in the online role-playing
game <http://secondlife.com/>Second Life are generating
quite a bit of buzz. In a world that looks more current-day,
where the characters do more current-day things, it's just
as easy - if not easier - to bombard virtual people with commercial
advertising as it is real people. With hundreds of millions
in subsidies at stake, it may soon become a possibility that,
even if Warhammer attains tremendous popularity, the games
that get front-burner treatment in coming years could look
less gothic and more like a sitcom.
On the other hand, Viacom's investment in Xfire suggests an
alternative: The Xfire instant messaging platform gives gamers
a way to connect with and send live messages to one another,
without breaking the context of the game they're playing.
If Viacom - which originally got its big boost as an outdoor
advertising company - takes advantage of this, it could drive
growth in advertising vehicles that don't steer the direction
of game development. On the other hand, they don't necessarily
subsidize game development either, which may make reliance
upon Xfire a less attractive option in the future for some
game publishers.
Michael Cai breaks down the math for us: Just last year alone,
advertisers spent over $60 billion on TV advertising. With
108 million households, that's a total investment of $45 -
50 per month. That's not much from each advertiser's perspective,
but if you did away with ads, that's how much money consumers
would need to spend to compensate.
"For video games, especially on the PC platform, there
are more than 50 million US Internet households who have active
Internet gamers. Only about 1 to 2 million of them are paying
for casual online games." Recent buyout announcements
that first put in-game advertising in the public spotlight,
Cai believes, may be focusing too much on what ads may provide
to the core gamer segments, while it's casual gaming that
could provide the more fertile proving ground. "I
understand Wild Tangent is doing something in the casual space
in terms of in-game advertising," said Cai, "but
I think more companies need to step up as they figure out
the in-game advertising technology and business model for
the casual games as well. That will provide more incentive
for publishers and developers to give out better games for
the casual market."
E3 2006 continuing coverage throughout the week.
®
