Interesting People mailing list archives
Game On
From: Dave Farber <dave () farber net>
Date: Thu, 26 Dec 2002 21:45:35 -0500
------ Forwarded Message From: Dewayne Hendricks <dewayne () warpspeed com> Game On By Alex Romanelli -- 12/26/2002 11:30:00 AM Electronic News <http://www.e-insite.net/electronicnews/index.asp?layout=article&doc_id=1101 49&spacedesc=news> This Christmas, Santa's sack will not be weighed down by any one particular consumer electronics product. The recession has hit the market fairly badly, not just in terms of economics, but in terms of innovative products coming to market. And this is likely to continue in 2003. For the first time in recent memory, the consumer market lacks a killer app. Analysts have pointed to several consumer segments making small, but interesting, progress in 2003. This week, Electronic News examines what's in store for the consumer market in 2003. Games Consoles In addition to a DVD player, the other must-have box in one's living room is a games console. Despite no new consoles from the three big players -- Sony, Microsoft and Nintendo -- analysts expect 2003 to be a crucial year for video gaming. All three companies are betting big on online gaming becoming the next phase of the industry's future. 2003 could be make or break for Microsoft Corp. in the video gaming market, having only entered the space late in 2001 with the Xbox console. "If online gaming does not take off in the next two or three years I strongly believe Microsoft will pull out of the video game market, because they are losing so much money already," said Jay Srivatsa, analyst with iSuppli Corp. "You can't go head to head with Sony on a level playing field without changing the game, no pun intended. They have to do something very different and online gaming is their ticket to success." According to Brian O'Rourke of In-Stat/MDR, Microsoft's approach differs from Sony's. (In-Stat/MDR is owned by Reed Business Information, the parent company of Electronic News.) In addition to designing the Xbox specifically as an online gaming console, Microsoft has built its own online gaming infrastructure, running servers and taking responsibility for billing, security and matching up players. Sony and Nintendo instead are a more hands off, making game developers responsible for the networking infrastructure. Microsoft is spending hundreds of millions if not billions of dollars on Xbox Live over the next three to five years, he said. "There's no guarantee of success here," O'Rourke said. "But Microsoft can afford to lose hundreds of millions of dollars or billions if they are convinced something is right. If they are wrong it's not going to drive them out of business, but if Xbox Live really flops they potentially could have to re-evaluate their commitment to console gaming overall, because they are not going to catch Sony any time soon, if at all." Online gaming is dependent on broadband adoption, as dial-up Internet access is just too slow for large graphics files. "It is not going to become totally mainstream but I think we're going to see traction next year because broadband penetration is increasing," Srivatsa said. "It's also going to come down to content. You have to have the right games. That's one of the reasons Xbox is not selling well in Japan. It's barely making a dent in Japan because they don't have the content." One potential market strategy is for Microsoft to subsidize the price of their games in order to drive online gaming. "But at the end of the day their games have to be just as good as Playstation 2," Srivatsa said. "Meaning number of titles, content, interest level." ------------------------------------- You are subscribed as interesting-people () lists elistx com To unsubscribe or update your address, click http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
Current thread:
- Game On Dave Farber (Dec 26)