If you've ever used something called "the Internet" to discuss the topic of "video games," then you've probably encountered "opinionated" people arguing about different game consoles, and how those different consoles are faring against each other. We decided we'd "cut to the chase" (and use a lot of "quotation marks" in the process). Yes, Microsoft's console launch is very exciting. Yes, the computer-industry giant has already accomplished many victories both large and small--but it has many more challenges to face. We've decided we'd make it simple, because at the end of the day, the success of the Xbox 360 is going to depend on three key points we're outlining here.
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Third-Party Support
If it can be said that the PlayStation 2 "won" the console race of its generation--and this has often been said due to sales records alone--then much of the credit can be given to Sony's enormous library of third-party games. After all, many of the best games coming to Sony's hardware weren't even from Sony. These games were from companies like SquareSoft (Final Fantasy series), Konami (Metal Gear Solid series), and Capcom (Resident Evil series), leaving the internal studios free to take their time while a plethora of other companies developed great games for the system. The GameCube's strongest lineup came from almost exclusively first-party games based on Nintendo's classic franchises, (Nintendo VP George Harrison speaks on what the GameCube was missing) so there were, understandably, not enough of them. The Xbox, on the other hand, certainly picked up some steam later in its lifetime, but there was a conspicuous lack of support, especially from strong Japanese third-party developers.
Microsoft has said this time around that it has every intention of targeting Japanese audiences and that third-party support is a priority, as stated in our recent video interview with J Allard, but this had better be near the top of the list if the 360 is going to take on Sony's lineup. With early reports coming back from more than one developer claiming that the 360 is significantly easier to develop for than the PlayStation 3 (most recently from John Carmack in his Quakecon 2005 keynote), all signs are pointing to what seems to be more support for this Microsoft system than the last one. But that isn't all. There are already Final Fantasy and Resident Evil games planned for the 360, two franchises that have been integral to Sony's success. Of course, simply getting alternate versions of games that are also on the PS3 (or PS2 for that matter) won't be enough for Microsoft. It's going to have to sign on exclusive games from third parties, forging its own Tekkens, Devil May Crys, and Metal Gear Solids. Microsoft certainly has the bank account and the gumption to get this under way, but it's unclear whether companies that have already built such deep relationships with Sony will pursue greener pastures this generation. For the 360's sake, Microsoft had better hope so.
Outlook: Positive - During its last console hardware generation, Microsoft began building the foundations of a strong first-party stable by acquiring Bungie and Rare, and it forged relationships with the likes of Bethesda (creator of the Elder Scrolls role-playing games), BioWare (creator of Star Wars: Knights of the Old Republic), Ubisoft (publisher of the Rainbow Six and Ghost Recon games), Tecmo (creator of Ninja Gaiden), and Epic (creator of the Unreal Championship series). For the 360, the company has gone on to sign on Japanese studios SquareEnix for Final Fantasy XI, Capcom for Resident Evil 5, Koei with Dynasty Warriors 5, and Namco with Ridge Racer 6. But the company still has some holdouts, such as Konami (creator of the Metal Gear series) and that pesky Rockstar exclusivity contract, so Microsoft has its work cut out for it.
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Enhanced Online
While there may have been doubts about the Xbox during its first year as a system, there can be no doubt about the quality of Xbox Live, the most comprehensive and successful online console gaming package to date. The online options offered for the PlayStation 2 and the GameCube were sloppy and inconsistent in comparison. As Microsoft enlisted more game publishers to expand Xbox Live, online Xbox games began to provide unique console-specific gameplay experiences, Xbox Live Aware functionality, and the ability to download new content and to patch existing games. With each addition to the Live library, the service set itself even farther ahead of the pack, drumming up interesting ways to bring new game content to subscribers, such as content upgrades for games like Halo 2 and Ninja Gaiden.
The revamped Xbox Live service on the 360 promises to advance Microsoft's considerable lead in the online space. For instance, the new service will introduce competitive elements in single-player games by integrating high scores into leaderboards so that players can compete against one another even when they're not playing head-to-head games. To complement the service's competitive aspects, the newest version of Xbox Live will offer a way for players to purchase unique customization options and additional games from Xbox Live Arcade. All things considered, this is a service that has grown in just about every direction. Yet for some reason, Sony still insists on keeping its hands off online play for the PlayStation 3, leaving Microsoft ample opportunity to sweep the online console market a second time. Even though it has always been, and will continue to be, a broadband-only service, Xbox Live has worked well enough for Microsoft in the past and will only improve as consumer-level broadband becomes more common in the future. Though the Xbox Live service still might not appeal to all gamers given its broadband requirements, it need only continue to improve on what it's already doing to be successful: creating compelling console gaming experiences and offering enough downloadable content to justify the service.
Outlook: Very Positive - The Xbox Live service already enjoys a subscriber base of more than 2 million users, and considering the service's online matchmaking options, real-time voice chat, and community features, it's easy to see why. Games like Halo 2 still enjoy a robust multiplayer community, while games like Pariah and Far Cry Instincts have even offered editing tools to users to create their own content. Microsoft has built up a network of loyal Live customers, many of whom have become accustomed to using the service to receive online updates. If Microsoft can execute on its plans, it has a very strong chance of cornering the online console gaming market all over again with the Xbox 360.
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Install Base
The best way for any console system to beat out the competition is to make sure everyone out there has one. Through a combination of excellent third-party support, more-attractive pricing, and stronger branding, Sony has had the upper hand up until this point, but if Microsoft wants to beat its toughest competitor, the 360 is going to have to make its way into more homes. In some ways, being the first system on the market is a step in the right direction, as it was one of the major factors in the PS2's success. However, some will argue that the 360 is launching too soon, possibly even cutting into the lifetime of the original Xbox, which remains a very relevant console even now.
While Microsoft obviously wants to sell more systems than Sony, some of the early signs from the 360 seem to be sending mixed messages. To begin with, the price of the console seems extremely daunting for all but the most serious gaming enthusiasts. If the past means anything, systems over the $300 price point have significant sales hurdles to get over. If Microsoft takes the importance of having a strong install base seriously, then it's going to have to drop in price by the time the PS3 or Revolution is released.
Microsoft also seems to want to use the 360 to expand its gaming audience...within the family. Presumably with the implementation of Xbox Live Arcade, and the more-streamlined system and peripherals, additional family members might fight for time on the console to play a high-definition version of Bejeweled. Attempting to embrace casual games isn't a bad idea, but this alone won't get more 360s into more homes, since casual games are already available in many different formats for significantly less money. Microsoft appears to want to make the 360 the center of all household media, yet the company also seems to want the 360 to be a "hip" and "edgy" console recommended by hipsters and supermodels. Can it do both at the same time? Microsoft had better hope so--and it will need to do more to court a larger user base than just including support for Pac-Man. In the short run, it remains unclear whether its launch lineup will be strong enough to support the 360 through the holidays, especially considering the delay of the highly anticipated role-playing game The Elder Scrolls IV: Oblivion and how there will be no sign at all of the most anticipated game for the console, Halo 3.
Will Japan be a key factor in the Xbox 360's future? That's going to depend on whether Microsoft can successfully woo the Japanese audience with the new console, as it tried and failed to do with the Xbox. Japan continues to be a large and significant consumer market for video games, and the company is already making brave attempts to get attention in Japan, though seemingly without much success as yet. In Japan, perhaps more than anywhere else, Sony has a huge lead over Microsoft in the home console market--Microsoft will need to garner that Japanese third-party support to really get the Japanese market on board.
Outlook: Unclear - With its early launch, Microsoft has a very important opportunity to capture the market by launching the first next-generation console, but it's not certain whether its launch game lineup will be strong enough to carry it into 2006. In addition, the company faces considerable hurdles with its positioning in the important consumer market of Japan--and the system's high price tag will clearly be a challenge in all territories. We'll have to wait and see on this one.
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