Sony, Microsoft admit it's all about games

OMEN · 07-14-2007, 04:23 AM

Quote:

After years of arguing over whose video game machine has the best bells and whistles, Sony and Microsoft agree the battle boils down to which one has the best games.

"The (game) lineup is critical this holiday because it's the first time all three consoles will be in unconstrained supply at retail," Peter Moore, Microsoft's vice president of interactive entertainment, said.

About a year and a half after Microsoft introduced its Xbox 360 and eight months after Sony and Nintendo introduced their next-generation consoles, the PlayStation 3 and Wii, developers are only just starting to regularly roll out the franchise titles that can make a game system a must-have. Some games are exclusive to one machine, while others are cross platform.

Sony cut the price tag for its PS3 by 17 per cent on Monday, leaving it comparably priced to the Xbox 360.

Many expected Microsoft to follow suit with a price cut on the 360, but the company so far is holding firm on the console's pricing.

The new PS3 price tag of $US500 (NZ$644) is just $US20 more than the priciest Xbox, which has a 120-gigabyte hard drive. When Sony announced a year ago the PS3's $US600 price tag, gamers howled.

The cost and lack of must-have games put many consumers off the PS3 despite Sony's insistence that the price was fair, considering it has a supercomputer processor, a 60-gigabyte hard drive and a Blu-ray high-definition DVD player.

With one of the fastest price cuts in video game history, Sony admitted its bet on the extra features had not paid off.

Still, great games could make it a formidable antagonist for Microsoft.

"If all we had was a price move, then we should have held that until our E3 press conference," Jack Tretton, head of Sony Computer Entertainment America, said. "But really, we've gotten that out front, and while we think it's substantial, we think the real news is the games."

Yet while this holiday season will be the first with all three consoles fully rolled out, some supply problems remain. A senior Nintendo executive said on Wednesday that Wii consoles, as victims of their own success, could still be scarce at the end of the year.

Although Sony was the dominant player in the previous generation console battle, it has trailed Microsoft coming to market and in sales this time round.

Microsoft said it had shipped 11.6 million consoles worldwide by the end of June, missing its target of 12 million.

In the United States, Microsoft has sold about 5.6 million consoles, compared with 2.8 million for Nintendo Wii, and 1.4 million for the PS3, according to data from NPD, a market data firm.

Microsoft's highly anticipated games - "Halo 3," "Grand Theft Auto IV" from Take-Two Interactive and "Madden 08" football from Electronic Arts - are all due out this year for the 360.

Games cost as much as $US20 million to develop, and many publishers wait for machine sales to ramp up in order to insure they have a critical mass of buyers.

All the positioning over price, however, may be moot until the consoles fall to $US200 or so. That's the magic point at which past console sales have exploded beyond the hard-core gamers into the mass market.

"Where these boxes get interesting is, 80 per cent of all consoles sold are $US199 or cheaper. Consumers aren't going get interested until they get to $US199," Wedbush Morgan analyst Michael Pachter said.

Microsoft's Moore said that this generation of consoles could have the longest lifecycle ever as price cuts bring in more and more customers.

"The indications we're seeing right now with the strength of sales of the PS2 shows the classic long tail of consumers coming in at the right price point," Moore said.

"Just to throw a price out there - $US149 - many years from now seems like a great price point to sell millions of units to consumers coming in."

Reuters

Sony, Microsoft admit it's all about games

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