14 DAY TRIAL // Nobody has been fortunate enough yet to get his/her hands on a new generation console, from neither Microsoft nor Sony, but talks regarding the outcome of the battle for our day-to-day entertainment have intensified over the last weeks.
The first war cry was "howled" by Microsoft, which has decided not to follow the tradition of launching the Xbox 360 console at E3 Expo. Instead, the company has organized a special event, hosted by MTV, for the supporters of the next generation console developed in the laboratories from Redmond.
Caught somehow off guard, Sony held a press conference right before E3 Expo, where it announced the tech specs for Play Station 3, PS2's successor and Xbox 360' sworn enemy.
The first direct confrontation between the two heavy weight competitors of the gaming consoles took place at E3 Expo, where Play Station 3 received an E3 Critics Award.
Microsoft's strategy and Sony's indecisions
For Microsoft, Xbox is a far more ambitious bet than what it looks like. Microsoft is aware that the times when the Windows operating system and the Office suite were capable of ensuring explosive growths and its domination have reached an apogee and that it's time to start searching for other domains of activity.
Microsoft knows that entertainment is the next big thing and that is why it didn't hesitate to lose millions of dollars in order to push Xbox on second place, despite Play Station 2's supremacy.
Since the PCs have reached a certain plateau level, Microsoft is aware of the fact that it has to sound the horn of battle for the conquering of the living rooms.
That is why it has decided to promote Xbox 360 not only as a gaming console, but also as an entertainment hub for the whole family. Microsoft's aim is to transform Xbox 360 into an equipment as common as the TV set.
Microsoft's corporate policy doesn't know the concept of being second, and the reason why it has accepted this position is because Xbox was a new product on the market. Now, Microsoft has learned well this market and wants badly to take Sony's place. But unfortunately, Sony is determined to prevent this from happening, and in a way, it has already done that by announcing superior tech specs for its Play Station 3. (A comparison between the technical performances of the two unborn consoles can be found here )
It's interesting to notice that Microsoft has never ceased to announce all sorts of novelties after E3. In Sony's case, a shroud of silence has covered this subject, while the software giant seems to have adopted a new slogan "Not week without news on Xbox". What is the strategy with which Microsoft hopes to defeat Sony?
Being the first on the market. An advantage?
Bill Gates: "We have a Ferrari, they have a Ferrari?.but ours will leave first"
Microsoft believes that the most important advantage it has over Sony is the launching date. Although nobody has ever got their hands on a Xbox 360 prototype (at the majority of conferences and events, Microsoft presented games that worked on a test version of Xbox360), it's obvious that in Redmond, the team is putting a lot of effort into making the console available for the winter holidays.
An official launching date has not been announced, but everybody, including Microsoft, is expecting that sometimes between November 4 and 17, the Xbox 360 tsunami will be hitting the planet. In this way, Microsoft hopes to gain an edge over Sony, who will launch Play Station 3 somewhere in 2006.
By pushing things so that it's the first on the market, Microsoft is taking a great risk. First of all, if it doesn't adjust its launching date and it doesn't take into consideration the other offers, Xbox 360 has all the chances to become a failure.
It seems that Sony will announce for the same period of the year a significant price cut on the Play Station 2, which might be as high as $100, according to some retail sources. With this move, although being a few years old, Sony's console might become a tempting piece of equipment for gamers.
Moreover, the recently announced Toshiba-Microsoft alliance, has fueled rumors on a HD-DVD compatible Xbox 360. Although there is no confirmation on that, just an allusion made by Gates, the gamers might not rush into buying the first generation of Xbox 360 (hoping that there will be a second one).
A failed launching could spell catastrophe for Microsoft, which would be in this way at Sony's mercy. Last week, a report made by some financial analysts, which said that if Xbox 360 has a failed launching, then Sony could easily launch its console in 2007, has stirred a sensation. Obviously, it's hard to believe that Sony has actually taken this into consideration, Play Station 3's launching date having more to do with technical issues rather than subtle marketing studies. Delaying the console beyond 2006, would give Sony enough time to wait for the developing of games for the new console, but in the same time, might allow Xbox 360 to recover from the alleged difficult launching.
Price, the great unknown
The second element in Microsoft's strategy is related to Xbox 360's price. Although the tech specs are well known for both consoles, the price is still the subject of speculations.
If we are to believe the rumor that says that Wal Mart will sell the Xbox 360 for $299, then Microsoft is planning to win the big bucks from games, the price announced by the same source being of $59.99, which is well over the regular price for a game.
Analysts computed that the $299 price is below the production costs implied by Xbox 360, hence, the significant revenues will be generated from games. This might be in fact Microsoft's winning combo.
Microsoft knows from the past experiences (Windows and Office) that hardware is important only when you have software for it, and therefore the company is focusing on signing as many contracts as possible with game producers rather than adding more megs of RAM.
A series of important companies have already joined Xbox 360's team and Microsoft is estimating that by the end of 2007, there will be 180 titles for Xbox 360, which represents an impressive portfolio. From this point of view, Play Station 3 is definitely one step behind Xbox 360, after all, we are talking about gaming consoles.
From what has been discussed so far, Sony is not planning on starting a price battle with Microsoft, the company even thinking of asking more than what a gamer would be willing to pay for gaming console.
Waiting for November
Similarly to the other major conflict from the IT world, HD-DVD versus Blu-Ray, the result of the console war is far from being over.
Microsoft has a more favorable situation than Sony, because it will bring Xbox 360 sooner than the Japanese company, at a much more convenient price, with more titles, and last, but not least, it is much more motivated.
On the other hand, Play Station 3's silence is rather strange, because it's unlikely that the Japanese giant doesn't have some aces up its sleeve. What could they be? We will probably find out in November.