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Next gen consoles: 3rd party economics Fight!

Ulf|3304d ago |Blog Post|10|

It is indisputable that the current console generation has been dominated, at least in terms of hardware numbers, by the Nintendo Wii. Industry analysts have gone over the "why" of the rise of the Wii many times over, but to re-iterate here, for clarity:

* The Nintendo Wii has been the lowest price console, by a significant margin, for the entire generation, and appeals directly to parents looking to buy their child(ren) a game console for this economic reason.

* Both Nintendo and 3rd party games publishers have chosen to market Wii software toward the "everyone"/"blu e ocean" demographic -- choosing to make, effectively, casual home games that appeal to parents, and licensed titles that appeal to kids through indirect marketing appeal.

* The Wii itself is designed with the casual consumer in mind, beyond affordability and software targetting: namely the controller, which resembles a commonplace TV remote control, and utilizes a simple point-and-click interface.

The Wii entered the market as its primary would-be economic competition -- the PS2 -- was finally being overshadowed by the , then new, Microsoft XBox 360 -- the PS2 actually outsold the 360 in the 360's first year of availability, worldwide, and by no small margin, either (12M PS2s, to 5M 360s). Most of these purchases were likely made by families -- late adopters, and curiously this number is surprisingly close to the number of Wii consoles sold the very next year. Both the 360 and the Sony PlayStation 3 were wildly expensive, relative to the new Wii, giving the Wii a titanic draw to its target audience. It was "new", but inexpensive. It was appealing to people who had never owned a console. It flew off the shelves.


Fast forward to this generation, and take a look at the emerging console rumors. Lets say the most repeated rumors are "true", for each console, just for the sake of argument (and because hardware rumors have a tendency to come at least partially true).

Holiday 2012:

Wii U:
4 core PowerPC7 @ 2.0 GHz
1.5GB of unified RAM
Radeon 6670 approximate GPU
Price: ~$349
appeal: enthusiasts

XBox 360:
3 core PowerPC6 @ 3.2 GHz
0.5GB unified RAM
Radeon X1900 approximate GPU
Price: $249, with reasonable features, $299 with Kinect
appeal: families

PlayStation 3:
1+7 core CellBBE @ 3.2 GHz
0.5GB partitioned RAM
Geforce 7950 GT equivalent GPU
Price: $249, with reasonable features, $299 with Move
appeal: families, late Blu-Ray adopters

Nintendo's approach is different this time around. They have a year (or so) headstart on the competition, and are going for the *enthusiast* crowd, rather than their traditional Blue Ocean, because their pricing would be aggressive at even $349.99, with their new controller included in the package.

The big issue that remains is one that most industry analysts ignore, because they don't understand multi-platform development.

The "PS4" and "X720" have been rumored to have ~4GB of RAM, which seems reasonable, given a holiday 2013 release date. These consoles will also likely have decent (not fantastic) GPUs and CPUs, and will very likely cost in the $400-$500 range upon release. The trouble with this is that this situation will replicate the current cross-platform development issue, as it stands for 3rd parties. Namely that, in the present day, one of the biggest reasons Wii ports aren't done is that the Wii has a weak CPU/GPU and less than 1/5th the memory of its competitors.

Reducing the assets and memory/CPU/GPU usage of a game to fit is hard -- even a majority of the expense of doing a port. The PSP and DS have a similar issue, and this explains why only licensed titles typically make the transition from one to the other -- there just isn't enough revenue to justify the extra expense of doing a port between radically different systems.

Nintendo has made the heinous error of, again, creating the "oddball" console -- the ONE console which costs 3rd parties extra money to port a game to. On top of that, by holidays 2013, the Wii U will no longer fit the "enthusiast" bill, and will be forced into the Wii's position of trying to appeal to the blue ocean... except this time around, it will have burned an entire year positioning itself as the "enthusiast" console, only to be replaced by machines with more than 2x the RAM, and probably 2x the CPU/GPU horsepower at the end of that year.

Unless Nintendo sells an incredible number of Wii U consoles from holidays 2012 through the end of 2013, 3rd parties will simply not want to downport their games to the oddball. Doing so makes the assets, and performance targets, for all games match the criteria of the weakest machine, because making extra assets for some consoles costs too much. Any competitor who chooses the PS4/X720 as a minimum spec target pair will be able to produce a far superior game, without the limitations of the Wii U. Call of Duty cannot afford to be replaced by Medal of Honor, etc. -- choosing to be the "crappy crossplat with the Wii U" shooter could lead to a franchise's downfall at the hands of its competition.

Thoughts, opinions?

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WeskerChildReborned3303d ago

I don't think the PS4 or 720 will cost more than $400 cause anything more like $500 - $600, i could just buy a gaming PC and use that. I think the highest price the 720 and PS4 will be is about $350 - $400.

Bladesfist3303d ago

Yes but most people do not have the technical knowledge to buy a PC unfortunately. The price to what you can do ratio is off the roof atm.

WeskerChildReborned3303d ago

Yea i don't know what the consoles will come out too but i do know that anything below $400 is an attracting price for me.

trancefreak3298d ago

I wonder if this time MS and Sony go with different skus again. One fully loaded for a steep price and a 2nd for entry level so you can upgrade later.

I think Sony and MS both know which prices seem to work from the last gen so It Shouldn't be as quite expensive but not to far off.

Even if they are priced high in the beginning we know they wont be in stock and if someone is desperate they will pay up to 3 times the amount on eBay. Supply and demand.

jessupj3303d ago

I completely agree with you Ulf.

I've been trying to say the same thing for a while, but you've worded it a lot better.

The difference between the wii and the HD consoles this gen was significant enough for virtually all 3rd party developers to not port their games.

My biggest fear is if said 'difference' isn't significant enough next gen. Because if the wii u is still very much underpowered but still close enough, we're going to see a lot of developers catering to the lowest common dinominator and release horrible ports on the PS4 and 720.

I will not be a happy camper if that happens.

taquito3302d ago

if ps4 and 720 are not at least $500 they will be severely underpowered

even at $600 a pop they will be significantly less powerful than a two year old gaming pc

Ulf3301d ago (Edited 3301d ago )

Remember that consoles are sold for basically 0 profit, unlike PCs. A $500 console would have the components of a PC that ran around $750 at retail prices, more than likely.

Also, the lightweight OSes, and lack of all the background processes, on consoles makes memory much less of a concern. 4GB of console CPU+GPU memory equates to more like 8GB of combined memory in a PC. On a 8GB PC, you just can't count on having 4GB available for your game, without risk of having it paged out from time to time, or being horribly fragmented by other process' heap allocations. On a console, you can have a guarantee, and that makes a big difference. The motherboards, likewise, don't need as much crazy support as a PC board (ports, expansion slots, extra memory slots, extra drive controllers, etc.), and are likely much cheaper, while not suffering from the performance flaws of the cheap PC boards.

In the end, you can build a decent gaming rig for $700-$750, and honestly, anything better/hotter would likely not survive most people's livingrooms or terrible console placement. ..and it'll be even easier to build a good rig, on the same budget, this time next year.

taquito3301d ago (Edited 3301d ago )

while i agree with much of what you are saying, the lightweight os idea you can throw out the window, look at ps3's web browser. it is downright terrible, the console guys will have full blown web browsers on next gen machines, also, back end processes like netflix, facebook, youtube, ect all soaking up ram, not to mention some kind of streaming service, gaiki, onlive,'s a wildcard ive been thinking about, what is ps4 or 720 nab a deal with steam???? hmmmmm....tasty cakes :)

people need to remember, consoles are always playing catchup, there will be a nice, fully bloated os on ps4/720

that is a good thing though, id rather use my iphone to browse the web than the ps3, but i look forward to being able to have only one machine on at a time, as whenever i used to game on my ps3/360 (i never do anymore, dark souls was the last console game i wanted, and dammit if it isnt coming to pc) i always had either my laptop or desktop on for work, friends, steam, chat, webcam chat ect......

3300d ago
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