Market Overview

Is it Too Soon or Too Late for PlayStation 4, Xbox 720?

The unveiling will presumably occur at E3 (the Electronic Entertainment Expo), which is scheduled to take place on June 5-7 at the LA Convention Center in Los Angeles. MCV did not provide any further details. However, My Nintendo News picked up on an interesting tweet from one of the publication's writers, Ben Parfitt.

“Obviously we can't reveal our sources,” Parfitt tweeted. “But you have my personal word on this - the source is exemplary, 100% concrete, ultra high level.”

Without knowing Parfitt's history – or the sources behind the story – I will not question his credibility. But I will question the viability of a dual unveiling from Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT). As numerous publications have pointed out, if the news is true, it would be the first time in E3's 17-year history that three new game consoles went head-to-head at the same conference.

Why, after so many years, would all three of the major console manufacturers decide to compete together? The assumption is that Sony and Microsoft are afraid of Nintendo's (NTDOY) potential. Historically, the Mario maker has been dead last to arrive. The Super NES came out after the Sega Genesis, Nintendo 64 came out after the original PlayStation, GameCube arrived before PS2, and Wii shipped after Xbox 360. One way or other, someone always managed to beat Nintendo to market with the latest game machine.

This time, Nintendo is going to be the first to market. But it's important to remember the reasons why:

  1. Instead of spending several years perfecting a new graphics processor, Wii was designed to be an upgraded GameCube with motion technology. Thus, its hardware was easier and cheaper to manufacture, and proved to be profitable from day one.
  2. Wii is still profitable, but sales began to dwindle in 2010, signaling the need for a new machine.
  3. Wii was nearly five years old when the Wii U was unveiled. Historically, new Nintendo machines are not released more than six years apart.
  4. Fewer and fewer games are being developed for the original Wii, adding to the need for a new console.

By the time Wii U is released this Christmas, the original Wii will be six years old. Whether you bought the original Wii in 2006 or did not get one until last fall (or skipped the console entirely), there's no denying that it is time for Nintendo to move on to the next generation.

Similar arguments could be made for Sony and Microsoft. PlayStation 2 arrived five years after the original PlayStation, and PS3 arrived six years after PS2. Xbox 360 came out just four years after the original Xbox. Thus, it would seem that Sony is due for a new machine and that Microsoft is running a little late. So why wouldn't they unveil new consoles this year?

The reason is simple: they're not ready. It's not that either company needs more time. Rather, it's that they did not plan their time accordingly.

When PlayStation 3 arrived in 2005, Sony immediately began talking about its goal for a 10-year lifecycle. This shoddy strategy was spawned by the success of PlayStation 2, which provided Sony with somewhere around 10 years of profitability. Sony and Microsoft have repeatedly claimed that they lose money on each new game console they release. The hardware is initially too expensive, they insist. As a result, Sony looked forward to another 10 years of profitability with its latest game console – you know, once the console became a profitable device.

(Regardless of how expensive the hardware is to manufacture, Sony, Microsoft and Nintendo always profit from selling software, which is the real reason why they release game consoles in the first place.)

The problem with Sony's strategy is that the company did not consider what would happen if PlayStation 3 wasn't a groundbreaking success. Sony just assumed the console's success was guaranteed, mostly because it had such an easy time selling PS2. But it was a different time back then, and Sony was the first to market. PS2 also had the best developer support in the industry. To this day, it has more top-tier games than most consoles combined.

The same cannot be said for PlayStation 3. Don't get me wrong, I've enjoyed the console. But while PS2 was entirely different from the original Xbox, there was not nearly enough of a difference between Xbox 360 and PlayStation 3. The machines were much too similar in terms of graphic quality and game variety.

With higher prices, fewer differences, and the rise of Wii and Xbox 360, Sony had a much more difficult time selling its console this time around. Microsoft benefited from Sony's decline, no question. If PlayStation 3 had been as strong (and as cheap) as PS2, Microsoft would have been screwed. Granted, we could say the same for the original PlayStation; if Nintendo 64 hadn't been overwhelmed with delays and crappy games, Nintendo would have crushed Sony.

After all that, what are we left with? A very grim future for the game industry. Sony and Microsoft are not prepared to release new consoles this year. I am sure of it. We might get lucky and receive one new console from one of those two companies. But there is no way in the world that we will get both.

Thus, if we do see a new Sony and/or Microsoft machine at E3, they will be rush jobs that are hyped with tech demos (read: not actual games!) and other big promises, but no price or release date.

That, however, would be a normal console unveiling. Lately, the game industry seems to have lost its sense of normalcy. PS Vita should have been the most exciting thing to come out of E3 2011, but it was a disaster. It has flopped in Japan, and it will likely do the same in the United States. It's too expensive, it does not have any must-own games, and the battery life is (reportedly) terrible. Who in their right mind would buy it?

When the Nintendo 3DS was released with a high price and a lackluster game lineup, consumers reacted accordingly by not buying the device. This is what consumers are supposed to do in this scenario. Does Sony – whose fans are not as loyal as Nintendo's – really think that it will be treated any differently? More than likely, it will be treated far worse for releasing a sub-par machine.

As for Microsoft, I think it is slightly possible that the next Xbox will be unveiled this year, and slightly possible that it will be released in November. But if it is, don't expect any great games. While the original Xbox had a stellar lineup of games (most of which were overlooked by consumers, unfortunately), the Xbox 360 had one of the worst launches in console history. Every single person I spoke to bought it for the “future,” not because they wanted to play a particular game at launch. That is awful.

Unless Microsoft has gone back to its old strategy, it is very likely that the next Xbox – rumored to be called Xbox 720 – will launch with a fairly weak lineup. I would love to be proven wrong, but this is Microsoft we're talking about. I shouldn't get my hopes up.

And what about Nintendo? Boy did this company screw up.

Let me put things into perspective: if Wii U doesn't pick up steam at this year's E3, Nintendo might as well give up. While the company insists that it has learned its lesson, I have a believe-it-when-I-see-it approach to the company.

As a lifelong Nintendo fan, I have seen the company through its best and worst moments. When the company strives for greatness, we are given the most amazing and most groundbreaking games: Mario 64, The Ocarina of Time, Pikmin, Mario Galaxy, Wii Fit (not a game but still groundbreaking), etc. But whenever Nintendo takes the lead, the company gets cocky – and sloppy. That's why the Nintendo Wii (which arrived after two failed consoles) had an amazing launch and an incredible first year. That is also why the Nintendo 3DS (which arrived after Wii and the original DS, which were both huge) had a horrendous launch.

Wii U's unveiling was atrocious. Instead of blowing our minds like the company did when the original Wii was unveiled, Nintendo showed off a bunch of weak tech demos. The company has one more chance to wow us in June. As a Nintendo fan, I would love to believe that E3 2012 will prove to be the company's most breathtaking show yet. But that sounds an awful lot like wishful thinking, doesn't it? And while I have always been a dreamer, I really hate the concept of wishing.

So I will dream of a glorious E3. I will dream of an amazing Wii U lineup, an impressive PlayStation 4 debut, and a third Xbox that blows my mind. But I will not wish for any of these things. In my experience, dreams can come true. But wishes never do.

Follow me @LouisBedigian

Posted-In: Microsoft Nintendo Nintendo 3DS Nintendo DS Nintendo WiiNews Rumors Tech Best of Benzinga

 

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