Around the turn of the millennium,
) was the 800-pound gorilla of the video game world.
Its PlayStation and PlayStation 2 consoles were the dominant forces
in the industry, beating the likes of
Nintendo Co., Ltd
(OTCMKTS:NTDOY) and Sega into submission. In the best of times,
Sony's gaming business accounted for over 60% of its operating
profit. These days, the company's biggest profit center is actually
its life insurance segment.
However, during Sony's heyday, Nintendo and
) were busy hatching plans to topple the big giant, and that's
exactly what happened during the current gaming console cycle.
Though it was outsold by the PS2 by more than a six-to-one margin,
Microsoft had built a small following of gamers with the original
Xbox, courtesy of its Xbox Live online multiplayer gaming
experience as well as the
This laid the framework for the success of 2005's Xbox 360, which,
through a lower price and earlier launch date, managed to actually
outsell the PlayStation 3.
While Microsoft ate away at Sony's market share among hardcore
gamers, Nintendo attacked from the other side with the highly
innovative Wii. Its motion control system -- friendly to everyone
from toddlers to Grandma -- captivated the masses.
Fast forward to 2013, and the industry has seen yet another major
shakeout -- smartphones and tablets from the likes of
) have captured a huge number of the casual gamers that once played
the Wii and
Activision Blizzard, Inc.
Plus, gadgets like the iPhone and iPad have virtually destroyed the
traditional handheld gaming market that was once dominated by
Nintendo and Sony. (See:
Nintendo Joins the Long List of Apple Victims
Heck, at this point, Nintendo's practically off the map. (See:
Weak Wii U Sales Are Dragging Nintendo Down
Again, Microsoft was able to disrupt Sony through a significantly
lower price and earlier launch date, and with other factors like a
superior launch lineup, an easier software programming environment,
and a more evolved online gaming experience.
The two versions of the original Xbox 360 were priced at $299/$399,
while the PS3, due to its expensive Blu-ray drive, was much more
expensive at $499/$599.
And now, we're seeing details indicating that Sony and Microsoft
have flip-flopped strategies.
Microsoft is taking the high-end of the market with the Xbox One
console. It will launch in November at $499, and will include a
piece of hardware that will increase its cost of goods sold -- the
new version of its Kinect motion control system.
Sony PS4 will come in 20% lower at $399, with its Eye system priced
as a $59 add-on.
Now, the cost of entry may not necessarily matter much at launch.
Hardcore gamers -- the type of people who are willing to pay up for
new consoles -- can be very loyal to their chosen platform's
exclusive franchises. That would be stuff like
on the Xbox side and
So simply assuming that the PS4 will destroy the Xbox One at launch
based upon a $100 price differential is far too simplistic.
However, that $100 price difference, combined with some
customer-unfriendly Microsoft policies, may have a long-term impact
on those gamers without serious loyalties -- as well as Xbox fans
considering a switch to the other side.
First, the Xbox One must be connected to the Internet, and the user
must "check in" every 24 hours, which has an odd Big Brother feel
Microsoft has had the capability to remotely suspend or ban
console tampering and fraudulent online activities, so it's obvious
that it's going to be monitoring what goes on in these consoles.
I have no problem with Microsoft banning users or even bricking
consoles under certain conditions, but does it really have to go
all NSA on us?
And what if people just want to play some Madden and never connect
their consoles to the Web? Why force people into this, if not for
the need to monitor and collect data on any number of activities?
) instituted a similar policy with its Creative Cloud suite of
products, which requires occasional online check-ins in order to
Additionally, Microsoft's policy on used games is downright
its own words:
In our role as a game publisher, Microsoft Studios will enable
you to give your games to friends or trade in your Xbox One games
at participating retailers. Third-party publishers may opt in or
out of supporting game resale and may set up business terms or
transfer fees with retailers. Microsoft does not receive any
compensation as part of this. In addition, third-party publishers
can enable you to give games to friends. Loaning or renting games
won't be available at launch, but we are exploring the
possibilities with our partners.
Given the wishy-washy language, we have no idea whether buying
and selling used games is possible, and if so, how much it will
cost. Why should we need permission to give legitimately bought
copies of games away? I can understand enabling an individual copy
of a game to work on only one console at a time, but this type of
intervention seems over the top. Worst of all, the rules are likely
to differ from publisher to publisher!
On Sony's side, it's taking what some are calling a populist
approach, with no restrictions on disc-based games, and no
So who's going to win in the long term? The more corporate,
1%-friendly Xbox One, or the PlayStation 4, which is keeping power
and choice in the hands of the people?
I was an Xbox fan from way back, but I have to say it.