E3 '07: Analysts size up big three

A handful of industry watchers share their reactions to the news from Nintendo, Sony, and Microsoft.

SANTA MONICA, Calif.--The E3 Media and Business Summit kicked off with press conferences from Microsoft, Nintendo, and Sony each dropping its own salvo of bombs (be they poorly told jokes or big announcements).

Microsoft showed off a slew of games, including Viva Piņata: Party Animals and an Xbox 360 edition of the trivia game Scene It. The company also dated Project Gotham Racing 4 and Mass Effect, and gave new looks at Call of Duty 4 and Resident Evil 5.

For Nintendo's part, the company basked in recent financial successes with a wealth of stats and showed off three new peripherals: the gunlike Zapper, a steering wheel meant for the new Mario Kart Wii, and the Wii Balance Board, which comes with the conference's main event game, Wii Fit.

At Sony's show, the electronics giant showed off a revamped PlayStation Portable, announced a deal with NCsoft for exclusive PlayStation 3 massively multiplayer online games, announced that Unreal Tournament III would be PS3-only for this year, and showed off Killzone 2.

With the show now in full swing, GameSpot stole a few moments from a handful of industry analysts to get their gut reactions to what was (and wasn't) announced during the conferences.

Wedbush Morgan Securities' Michael Pachter said before the show that he expected an Xbox 360 price cut by the end of the Microsoft conference as an answer to Sony's $100 PS3 price cut from earlier in the week. With no such cut materializing, Pachter admitted he was wrong, and said that Microsoft is in a tough position right now because of the recently announced warranty extension for the system. He said a price cut now might send the wrong signal to consumers about the quality of the hardware, and they could save the price cut until they can reassure consumers that whatever was wrong with the system has been fixed.

Nollenberger Capital Markets' Todd Greenwald said the lack of a 360 price cut was probably the right move. "A price cut in July or August probably doesn't do much," Greenwald noted, "especially when there still isn't a compelling reason to buy a PS3 (despite the big $100 price cut)."

As for Sony, Greenwald gave the PSP redesign a yawn. And while he called the company's conference "underwhelming," he said it appeared as though they were lining up a strong slate of games for next year.

Greenwald seemed most impressed by Nintendo, saying the Wii maker can basically call its own shots for now. "I think the Zapper looks great, really great," Greenwald said. "Wii Fit should expand the market even further for Nintendo, and maybe some nimble publishers like Ubisoft and Majesco can benefit from it. I don't think it will be as big as Brain Age or Wii Sports, though."

The Yankee Group's Michael Goodman thought Wii Fit was "really cool," but doesn't expect it to meet the same success as other Nintendo breakout hits like Brain Age and Wii Sports.

"The reality is that the Wii is not expanding the market as much as Nintendo wants us to believe," Goodman said. "According to a publisher I have spoken to, less than 10 percent of Wii buyers did not previously own a console. So basically, Wii growth is coming at the expense of other console manufacturers--mainly Sony--not by expanding the market. It is only once a Wii enters a household that others start using it. Wii Fit will require those 'non-gamers' to go out and buy the board and software, which I'm skeptical of."

Lazard Capital Markets' Colin Sebastian was perhaps a little more optimistic about Wii Fit, saying it "looks good and will appeal to the casual audience that Nintendo is tapping into." He still expects a price cut on the Xbox 360 to arrive later this summer, and overall he said the conferences went pretty much as he expected, "which probably favors Nintendo."

526 Comments

  • YukoAsho

    Posted Jul 27, 2007 9:08 pm PT

    quincy0191 - There's more to the "console war" than hardware. Month after month, we've seen that games outside of the traditional Nintendo franchises just don't sell for the Wii. Even in what is supposedly a "banner month" for Wii in June, the only things outside the big three that have sold are Wii Remote + Wii Play (I think we both understand it's not selling on its' own merits), Resident Evil 4 (a title aimed squarely at core gamers that has been released THREE TIMES before), and all the way at 19, Big Brain Academy. Victor Ireland once said this of the Dreamcast, and I'm going to say it about the Wii: "Who cares if there are 55 million if they're all in closets?"

  • Emperor_Ming

    Posted Jul 26, 2007 2:46 pm PT

    The problem with Nintendo is they cut costs at every corner to produce a console just for games, that is nothing more then a gamecube with a gimmick controller that Sony stole the thunder of (I admit, unfairly, but thats big business) In three or four years, the Wii will not sell any longer, regardless of how cheap, because frankly, 640 resolution games arent going to cut it against the 360's supposedly 7 year cycle, and the Ps3's supposedly plus ten year cycle.

    Also, these analysts are full of crap. PS3 price cut in summertime influenced a 135% sales surge, thats a huge surge when even a 20% sales increase would have been healthy.

    And Microsoft has basicly lost, they lost all their cummalative costs (1.8 BILLION United states benjamins) Have gimped hardware that even they admitted have no idea what the specific problem is, and lost a bunch of third parties to PS3 (Haze by Ubisoft, UT3)

    Sony's strategy if they can keep it up might be slow, but its been very effective thus far in a console war. Stay quiet and outlast the competition.

  • quincy0191

    Posted Jul 23, 2007 1:46 pm PT

    I can't see Nintendo losing this war. They already make money on every console, games are cheaper and easier to develop, as well as offer more possibilities (The Wii controller has enough buttons to support a simple port of a PS3 or 360 game), and SCE lost $2 billion developing the PS3, while MS's warranty extension caused their gaming division to lose $1.89 billion, and though MS's gaming division is making money without the cost of the warranties factored in, SCE is not. Both are posting huge losses overall, while Nintendo is doing so well their shares rose above Sony's a little while back, despite the fact that Sony has six times Nintendo's revenue. Sure, it's a marathon, but the tortoise and the hare is bull. Nintendo is not showing any signs of needing to rest.

  • AgentA-Mi6

    Posted Jul 23, 2007 1:09 pm PT

    Sony will win

  • MysticDynamite

    Posted Jul 23, 2007 8:47 am PT

    Even if Blu-Ray emerges as the dominant laser format, people are still going to buy the much cheaper but still efficient DVD.

  • celticpyro

    Posted Jul 23, 2007 8:25 am PT

    I Disagree Plumjoose, The Ps3 and 360 (the 2 current Superpowers in this war) will eventually settle their differences and merge. making the ultimate system... The Playstation360!!!.

    Itl happen, youl see .......

  • plumjoose

    Posted Jul 23, 2007 6:05 am PT

    Ok, the truth is simple. This is MY sizing up the big three. XBOX 360 has the best games, PS3 has the best hardware, and the Wii.. well... is the most innovative. Oh, I'm selling my Wii. The games.. well.. suck. The PS3 is going to win in the long haul. Sony is quality, and the games coming out are insane. And BluRay format has potential to make much bigger, and mroe detailed games than XBOX360's DVD format (an aged format). Ps3 wins BARELY by the end of this generation, with the wii and 360 tied behind it.

  • Worsley_ngw

    Posted Jul 22, 2007 11:56 pm PT

    I think that that they don't know what they are talking about right now because it is still to early in the game.

  • bradg82

    Posted Jul 21, 2007 5:20 pm PT

    I think it is funny that so many people are writing nonsense like "What do analysts know LOL. They aren't hardcore gamers LOL!" Analysts don't care about what YOU think. They care about what will make money and sell the most. I agree with them that the Wii will not only continue to outsell the other consoles, but will widen the gap in the coming months and years. The average person will never spend more than $300 on a game system. Seeing as how Microsoft and Sony are already losing money on their hardware sales, I think it will be a long time before they can lower prices to become competitive with Nintendo. On top of this, I read an article stating that it costs half to develop a Wii game as it does a PS3 game. Once the Wii gets a big enough hardware lead, third parties will switch allegiance to the Wii because it is cheaper and easier to make games for a system that has a larger user base. Microsoft is doing about how you would expect, selling decently. However, if their XBOX losses continue, I wouldn't be surprised if this is the last XBOX...MS doesn't like losses. Sony really blew it by making such an expensive console. Like it or not, Nintendo has this generation in the bag.

  • clawboy

    Posted Jul 21, 2007 1:14 pm PT

    I"m glad I own a ps3. This isn't the 100yr dash it's a marathon that Sony will win after it's all said and done. Why spend $400 on a xbox 360 that's going to overheat and die. You mail it in and microthief sends you a used xbox 360 that dies. Do you see where this is going. BREAK THE CYCLE AND STOP THE INSANITY!

  • ch-ch-chaoguy

    Posted Jul 20, 2007 11:25 am PT

    PS3 is still quite a rip off , i shall spend my hard earned 500$ elswhere...and for the bashers of nintendo I really didn't see much coming of sony this year, frankly I think nintendo did have the bragging rights this year with how much they've sold... and about the balance board, if you would have used your imagination you maybe wouldve seen that it can be used for other games as well!

  • massey123

    Posted Jul 20, 2007 3:41 am PT

    ye i agree with quincy there is just no point in having a ps3 unless ure rich and just using it as a paperweight

  • quincy0191

    Posted Jul 19, 2007 3:51 pm PT

    Oh, I'm not saying that Microsoft (I assume that's what you meant) is doing any better. There's that article detailing their $1.89 billion loss in the gaming division. But Gears of War is far better than Resistance, Sony's only newish game, and Xbox has stuff like Viva Pinata too. My point was that the PS3 wasn't lacking hard drive space, so why should Sony increase the drive space without addressing the issue of good software (of which there is an issue), and compounding the problem of price. What's the cheapest and hottest selling system? Wii (Go Nintendo!) Second cheapest and second best selling? 360. Most expensive and worst selling? PS3. The software issue and surprisingly hard drive sizes correlate as well.

  • Laxe84

    Posted Jul 19, 2007 2:48 am PT

    I'm sorry quincy0191 but how has M§ done much better with their "innovative games" and original games? Not making sequels? Does a certain Halo 3 sound vaguely familiar? Can I emphasise the "3"? I'm sorry but these reasons for bashing Killzone 2 and Sony's E3 can't really be used unless you see through the same lenses regarding Sony's competitors. Only then will you see that Sony are did just as well (if not better but that's my opinion) as the other two companies in E3.

  • quincy0191

    Posted Jul 18, 2007 4:08 pm PT

    Sony has managed to screw itself a little harder with this price cut thing. Sure, an extra 20 GB is great, but the problems plaguing sales were NOT storage space, they were games and price. And though making UTIII Sony exclusive was a great move, it and Killzone 2 are not going to propel this console to the front. Sony has shown no new, innovative games; making sequels is not the way to sell consoles, and forcing people to shell out $600 without giving them the $500 option will just depress already nonexistent console sales. 1m sold in eight months? Woooo.....

  • mazniq

    Posted Jul 18, 2007 8:51 am PT

    Better than usual, indeed.

  • keinuveye

    Posted Jul 18, 2007 7:26 am PT

    I am in the camp that they were all pretty unimpressive. I was slightly surprised by Sony who seemed to be doing better than usual.

  • thomas10soa

    Posted Jul 17, 2007 12:45 pm PT

    360

  • mixup1258

    Posted Jul 17, 2007 7:35 am PT

    Nice TTDog u shot them down for awile* hopefully* and im tallking about all the fanboys

  • rolla020980

    Posted Jul 17, 2007 6:57 am PT

    E3 blew, we all know this. The biggest news is a zapper??? Come On! I think the Wii will continue to be popular with casual gamers, and the 360 with the more adult type of gamer (yeah, Wii owners are always asking for more adult titles, and the good ones will never come). BTW, The Darkness Rules!!!

  • TTDog

    Posted Jul 17, 2007 2:04 am PT

    Just find it amusing that Sony fanboys attack the 360 for having nothing but shooters, yet are practically wetting themselves over the "slightly above average" Killzone 2 demo, and because Haze and UT3 will be "Timed" exclusives... and all three of them are.... shooters.

    I'd try and explain the word "Hypocrite" but you may as well try to teach a chimp how to play the trombone.

  • NailX

    Posted Jul 16, 2007 11:20 pm PT

    I don't think the 80GB model of the ps3 will stay at $600. I think after the 60's are gone they will drop the bundle feature and sell the 80 model at the same price that the 60's are at now.

  • Jerian

    Posted Jul 16, 2007 9:10 pm PT

    These in between console years are hard to wow us but Halo3 and GTA4 will keep sales up for a while. BTW Microsoft is not cutting price because Sonys is not permanent. THey are just phasing out 60gb version then back to 600. I dont think either Sony or Microsoft will cut until they have released Halo3 & MGS4, they know there are gamers like me who will prob shell out to play those 2.

  • XAF1

    Posted Jul 16, 2007 5:30 pm PT

    Nintendo is in a good position because the system is inexpensive and it has a little bit of everything for those who are not deep gamers as well as those who just enjoy gaming period. Nintendo has tapped into a group that neither MS or Sony have majorly reached---non gamers. There are older adults who are afraid of computers who are playing Wii games. Most individuals I know have at least 2 Nintendo Wii's in the house or will soon---as they are planning to buy more. Myself I own the Wii and the 360. At some point I will pick up a PS3 just not anytime soon---maybe next year. This E3 was not very enlightening to me. It was rather dull. I hope X07 and Tokyo Game show goes better. I'm eager to see what surprises Tecmo, Capcom, etc. are working on in Japan as well as what Europe has to offer this year for each console.

  • VanGriffin

    Posted Jul 16, 2007 3:58 pm PT

    The Tokyo should be much better. I couldn't give a hoot over the X360, and neither does Tokyo. And Greenwald in in the wrong job.

  • southy787

    Posted Jul 16, 2007 12:16 pm PT

    E3 2007 pretty much taught us nothing that we didn't already know. Whilst there were some important highlights, it was a major let-down.

  • Mkherkzen

    Posted Jul 16, 2007 11:54 am PT

    I think that the big three was just saving their strength for Games Convention and/or Tokio Game Show. Otherwise...it was a failure for all three of them

  • fetusfart18

    Posted Jul 16, 2007 10:25 am PT

    Despite my grandmother buying a Wii after playing Wii Sports, I still think Nintendo had the least impressive showing. Sony had the best, in my opinion, simply because there announcements were a big step up from where they've been this generation, plus the big announcements, (PC mods usable in PS3 UT3, the NCsoft deal, etc. While Microsoft really just showed a bunch of games we've known were coming for over a year, with the exception of the Viva Pinata party game.

    Yeah, so there's my two cents.

  • Paul_TheGreat

    Posted Jul 16, 2007 10:13 am PT

    Sony had the better E3.

  • GonzoGuy

    Posted Jul 16, 2007 9:44 am PT

    As a Wii owner, I wasn't very impressed and not surprised at all. I expected a new peripheral from them and I'm just happy one of them isn't just something to hold your wiimote.

    I was hoping to see them grow some balls and declare that they will be allowing 3rd party publishers to create AO games for their system. The games we saw were interesting but we've known they were coming since launch.

    I am looking forward to playing Trauma Center 2 player and Mario Galaxy but not much else really. I was just hoping that, considering the press lately, they would do a little more to appeal to adult gamers.

  • whitey3221

    Posted Jul 15, 2007 11:56 pm PT

    I have to agree with the analysts I was vastly underwhelmed by Sony except for UT3 exclusivity. I didn't think that Nintendo did that great, but microsoft really sold their products quite well. I also agree that there will be a 360 price cut before halo is released simply because you can't sell your greatest franchise without attempting to sell as many consoles before releasing it.

  • TacoJelly

    Posted Jul 15, 2007 10:31 pm PT

    People buy exercise equipment all the time, and even if a child or husband in the household has been the majority user of the Wii, Wii fit might motivate others to start buying software for it. With the Brain Age, people had to own a DS to actually buy the game, which is a 150 doller purchase (game and DS). I see Wii Fit being a huge success with many news programs and talk shows (good morning america and oprah) doing a lot of promotion for them.

  • veni-vidi-vici

    Posted Jul 15, 2007 9:17 pm PT

    interesting opinions.

  • juno_22

    Posted Jul 15, 2007 7:35 pm PT

    ya well it my be a piece of plastic but that piece of plastic is going to be super fun. they announced Mario kart as well. and the wii is selling so well because of products like wii fit that appeal to people that dont game as often as, say you and me. i think sony had a fair deal to show, but out of the 2 according to sales pretty much everywhere but Australia, the wii wins bottom line the wii is better according to popular demand. the 360 was lame even though i believe the 360 is better then PS3 for various reasons.

  • shawnomac

    Posted Jul 15, 2007 5:00 pm PT

    Todd Greenwald is a moron.

    He was unimpressed with the showing that the 360 and the ps3 had eventhough they had the most to show.
    On the other hand he was very exited about the zapper which is a freakin piece of plastic.
    Nintendo had nothing segnificant to show other than stats of how much they have sold. Nothing new other than Wii fit which makes me YAWN.

  • jetsethi

    Posted Jul 15, 2007 12:49 pm PT

    Nintendo did it again. They chose to go their own route, like before, resulting in success (DS and Wii) and just like before, there are bashers and people giving them flac. These are also the same people who end up eating their words because of the short-sightedness.
    (I got alot of crap from Sony fanboys when i bought my DS just after launch. You can bet that it doesn't happen anymore!) Nintendo has done it again!

  • icytower38 Site moderator

    Posted Jul 15, 2007 10:28 am PT

    Interesting read, and comments.

  • pb1285n

    Posted Jul 15, 2007 10:19 am PT

    The Wii had the best conference, what did they really do?

    Talk about how wonderful they are
    Show us some gimmicky peripherals (Hula hooping is not fun unless it's done by your virtual self!)
    Line up its next slew of rehashed classics

    Nintendo seriously is a one trick pony. The balance board was done once before on the NES but it was called the power pad at the time. They say they are engaging a new breed of consumer but really all they are doing is isolating people to their homes. If you want to play soccer, join a soccer team don't play Wii Fitness alone in your house. Mario is great and all but when your entire line up consists of Mario games you know you have a serious problem. ---

    Oh and finally a console improves upon itself in its redesign without taking anything away.

  • alcheng

    Posted Jul 15, 2007 3:15 am PT

    The way of "showing a bunch of games" (which Microsoft and Sony are doing) is getting pretty redundant. I like Nintendo's press conference mainly because they are doing something completely different which is effective, particularly related to their goal of expanding the audience. Very informative to a casual gamer. I'm also somewhat upset when looking at the comments on Gamespot, especially those posted by hardcore gamers, that they are being naive only because they want to see a bunch of games. Plus, I've also seen people posting Nintendo's Press conference is unimpressive, I myself can prove 'em wrong.

  • Dreski83

    Posted Jul 15, 2007 12:20 am PT

    microsoft doesn't really need a price cut for what they deliver right. system faults can hurt, but with tons of must have games nearing release, I'd have to say that would be a much better time to do anything dramatic.

    nintendo is okay in my book. as long as they stick to what they know and continue to please their fanbase, that support alone can keep them coasting. in the mean time, why not attract different audiences, heck of a way to kill time until their big titles drop.

    sony... hmmm... not too sure what to say about them. no bias, just kind of speechless. as a company they are totally focused on "becoming" the great monster they were once known as. sadly, until that time comes they come off as some lame car saleman who is tryin to sell you on a broken kick @ss jaguar with no wheels...

    all in all, this is a mighty nice year to be a gamer. can i get a AMEN!!

  • voice83

    Posted Jul 14, 2007 11:57 pm PT

    right now i'm having more fun with my 360 than with my wii. however, it seems to me that nintendo is the future. they may not have that many consoles in non-console homes yet, but this is just the beginning. this thing is gonna spread by word of mouth, and it'll be huge. the older i get, the less appealing i would see myself if i were a 'hardcore gamer'. i dont know if i ever was. that's not to say that i dont enjoy the good games. but hell, i like to balance my life by being somewhat of an adult. x-box fits into that in it's own way, cause it's classic gaming in the next-gen form. as for sony, i'm quite disenchanted with them. not living with mommy or daddy anymore, i cant afford to spend that kinda money on a console that, despite their false optimism, seems to be losing third-party support.

  • Great_Ragnarok

    Posted Jul 14, 2007 10:19 pm PT

    Donathos no one is saying their strategy is bad. Its that x360 and ps3 appeal to more hard core or generic customers. and the only game that looks interesting to me is super mario galaxy. While the rest seem just another game in the series.they maybe fun but hardly ground braking.
    btw nintendo has not revolutionized the games they've merely made an interface that maybe more friendly to other people.
    games do not suddenly become revolutionary simply because the inputs have changed.If I remember correctly games are about out puts. and following that I think echo chrome was heaps more revolutionary than most wii games.

  • BrideInDream

    Posted Jul 14, 2007 7:45 pm PT

    a yawn for the new redesign psp ? wth..

  • LastSamurai14 posted Jul 14, 2007 4:36 pm PT (does not meet display criteria. login to show)

    LastSamurai14

    Posted Jul 14, 2007 4:36 pm PT (hide)

    OMG, are they kidding? Sony easily had the best conference, then microsoft, then nintendo.

  • HAMMER261266

    Posted Jul 14, 2007 11:31 am PT

    The rumor is that Sony might have another $100 price cut later this fall. Microsoft is probably waiting to see if Sony does cut it's price again before making a decision. If Sony doesn't cut it's price, I don't think Microsoft needs to either.

  • barius197

    Posted Jul 14, 2007 11:17 am PT

    "Nollenberger Capital Markets' Todd Greenwald said the lack of a 360 price cut was probably the right move. 'A price cut in July or August probably doesn't do much,' Greenwald noted, 'especially when there still isn't a compelling reason to buy a PS3 (despite the big $100 price cut).'"

    Is it really that hard to see that the best time for a price cut would be several months after Halo 3. This is a game that will move systems. If they allow it to move and extra hundred thousand systems and hold off on a price drop, Microsoft will collect more than 10 million extra dollars.

    Look for a price drop towards the end of November to move systems during the holiday season. The PS3 should have most of it's 60 GB systems sold off by then and it should put Microsoft in the position to sell at a clearly lower price point. (Do away with the Core system, increase the hard drive to 60 GB or 80 GB and set the price at $349.)

  • donathos

    Posted Jul 14, 2007 10:35 am PT

    In my household we own a copy of Cooking Mama. My fiancee wanted it, which is why we have it. She's now interested in what's coming up on the Wii -- she recently bought Big Brain Academy for us.

    Attention all 14 year old PS3 fanboys: *this* is what is meant by "expanding the market." It means that, one day, when you put down Halo and take a girl out, you'll be able to mention the world of video games without sounding like a cellar-dwelling geek.

    Nintendo is making games that appeal to audiences other than the typical young male. Tell me again why this is bad for video games?

    (Oh, and if Nintendo releasing a Legend of Zelda title, Super Mario title, Smash Brothers title, Metroid title, and Mario Kart title -- all within about a year's time, and all likely to be considered 'classics' -- isn't appealing to the "hardcore gamer," then I guess I don't know what is.)

  • msudude211

    Posted Jul 14, 2007 9:10 am PT

    How does it favor Nintendo?

  • syxpack

    Posted Jul 14, 2007 6:52 am PT

    What a job, to guess.

    And when you are wrong, you either guess again or defend yourself, both making you look dumber.

    I can't count how many people especially ladies are picking up the Wii - first time users of consoles. If only gamers were picking up the Wii, there would be supply.

  • luigimario_64

    Posted Jul 14, 2007 5:27 am PT

    MasterAsh42 is right.
    And if non-gamers are shown the Wii by former non-gamers of a household with a gamer, perhaps they will then become part of the market too.

    And for these people complaining about games... Nintendo showed off plenty. Just not during their major press conference.

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