Tuesday, April 24, 2007

Will Apple supplant Sony, MS and Nintendo to become the dominant video game console maker in 2015?

With the well documented problems facing Sony in attempting to retain it's market dominance in the video game console space, I got to thinking about past trends in the gaming industry and where we might find ourselves in the not so distant future.

The console industry has always been very cyclical.

If you go back 30 years (has it really been that long?) to 1978, Atari was the dominant game console manufacturer, having replaced Pong as the console of choice for consumers with their Atari 2600. After two generations of hardware, they were defunct as a viable console maker and in 1983 the industry as a whole imploded as a result of willy nilly licensing and a string of monumentally bad titles. E.T. The Extra Terrestrial takes most of the blame for this, but in reality that title was just the proverbial straw that broke the camel's back.

In 1985 the industry was resuscitated when Nintendo hit it big with the Nintendo Entertainment System and soon "Nintendo" became as synonymous with Video games as "Coke" is for soda pop. At one point, one in three American homes owned a NES. For over a decade Nintendo ruled the console world through two generations of systems with some mostly light competition from Sega's Genesis.

Sony first entered the console market space in 1988 when they partnered with Nintendo to create a new NES that would feature both NES cartridge functionality and CD-ROM multimedia technology, but after a series of questionable moves by both companies well documented here, the hybird NES was dropped, Sony's now forgotten Play Station (space intentional) was never released and the two companies became eventual rivals instead of partners.

Steve Race, Sony Computer Entertainment Of America's (SCEA) then CEO, stated, "Since the deal with Nintendo didn't come to fruition we decided to put games on a back burner and wait for the next category. Generally, the gaming industry has a seven-year product life-cycle, so we bided our time until we could get in on the next cycle."

In 1994 Sony did release the first "Playstation" in Japan and by the end of 1995 Nintendo had fallen prey to changing market conditions, and some say to it's own hubris, in being usurped by relative newcomer Sony as the king of console gaming.

In 2001 Microsoft released the first Xbox and although Sony overwhelmingly dominated that generation of hardware sales with it's own Playstation 2 which came out a year earlier, Microsoft impressed many gamers and game developers with their hardware and commitment to quality games and the universally praised Xbox Live. Microsoft sold only a fraction of the consoles Sony did, but they made invaluable in-roads and had cemented a place in the console game industry.

Then in 2004 Microsoft dropped a bomb on their competitors when they announced the Xbox 360, catching both Sony and Nintendo completely off guard. With a planned November 2005 Launch in North America and worldwide by the end of December, Microsoft virtually assured themselves of at least a one year headstart on either of their competitors possible Next-Gen offerings.

Which brings us to the present. Despite some hardware issues, Microsoft has done an excellent job selling Xbox 360's around the world, except in Japan where it continues to stagnate. Worldwide, more than 10 Million 360's have been sold. Nintendo's Wii is currently selling out everywhere it is released, and our last Gen leader, Sony is struggling mightily to sell PS3's, which come with a pricetag a full $200 higher than the Xbox 360 Premium system.

So, if things actually remain on course for Microsoft and they parlay their success with the 360 into a true market dominator with an Xbox 720 in the next "Next Generation" due sometime around 2010-2011, who will enter the fray then to dethrone them? History says it will happen. So far NO console manufacturer has managed to dominate beyond two generations.

Apple has made it clear they have an interest in gaming with the recent release of games for the Ipod Video. Rumors have floated around for the better part of two years about a possible Apple Handheld gaming console, and now with their Apple TV hardware, they have entered the digital delivery space previously dominated by Microsoft's Xbox Live Marketplace.

Are these moves the portent to more grandiose Apple gaming plans down the road? In 2015 will we all be playing Apple Igame consoles? Is Sega a sleeping giant waiting for the right time to be awakened? Will someone else emerge from the ether and surprise us all? Or will Sony, Nintendo and Microsoft be the only players in this game for another 10 years?

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