Nintendo's GameCube may top PlayStation 2, Xbox
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Sony has a head start, Microsoft has millions for marketing, but an emerging view is that Nintendo may be in the best position to rule the video-game world during the next generation of games.
As the battle lines become clearer, a growing number of industry analysts and game developers say Nintendo's GameCube, a high-powered video-game console expected to be launched in the fall, has not only the technical sophistication but also the right strategy to overcome its more highly publicized rivals.
"Judging by overall developer confidence, there seems to be tremendous confidence in GameCube right now," said Richard Doherty, an influential analyst with Envisioneering, a consulting company. "I respect that."
The fight for supremacy in the next generation centers on GameCube, Sony's PlayStation 2 and Microsoft's Xbox. GameCube will play games stored on miniature digital video discs (DVDs), while PlayStation 2 plays full-size DVDs and movies. Xbox, also a DVD-playing device expected to be launched this year, features a built-in hard drive and a networking card.
Peter Main, senior vice president of Redmond-based Nintendo of America, admitted having "anxiety and trepidation" at advantages and past accomplishments that its competitors have. "But we are feeling very optimistic," he said.
Until now, Nintendo has remained relatively quiet about GameCube, while Microsoft and Sony have waged pitched battles over hardware specifications and processor power. There was even some question whether Nintendo would have its new hardware ready for market this year.
But now, with the closely watched 2001 Electronic Entertainment Exposition only one month away, analysts, game developers and other industry observers are starting to speak out, and it appears that GameCube might exceed expectations.
"Nintendo has done an incredibly good job of flying in under the radar," said Tom Russo, editor in chief of Next Generation magazine. "Microsoft and Sony have had their PR machines in full force, but I think Nintendo knew all along what needed to be done.
"They have spent their time quietly developing titles that will really capture the imagination of the gamer."
What makes the mounting appreciation for GameCube all the more surprising is that until a few weeks ago, many had doubts. Sony, the company that completely dominated the market during the last generation of games with its 32-bit PlayStation, entered this latest generation with a one-year head start over Microsoft and Nintendo.
Especially with debt-ridden Sega, manufacturer of the Dreamcast game console, out of the market, Sony looked unstoppable.
But Sony has not been able to really capitalize. Game sales are down in Japan, where PlayStation 2 was launched in March 2000. While Sony has sold more than 5 million PlayStation 2 consoles in Japan and shipped 10 million consoles worldwide, software sales have been weak.
Sony also has what's called low tie ratios, the amount of software to hardware. In Japan, marketing analysis indicates there are about six discs for every PlayStation 2 console. But two of those are DVD movies and two are software for the original PlayStation, leaving only two PlayStation 2 discs sold for each console.
When asked about the low ratio in October, Kaz Hirai, president and chief operating officer of Sony Computer Entertainment of America, said that Sony viewed the cost of hardware sales as an "investment" and that his company was in the market for the long haul.
Despite record-breaking hardware sales, it has taken Sony more than a year to have its first million-selling game title for PlayStation 2: "Onimusha: Warlords" from Capcom. By comparison, the Nintendo 64 and Sega's Saturn and Dreamcast all had million sellers within months and sometimes even days after release.
Among many in-the-know consumers, the games released for PlayStation 2 have fallen short of expectations.
"Sony's branding is what is carrying them right now," Russo said. "The products will come; but due to the complexity of the system, they are going to take some time."
Microsoft may also falter in Japan. Scheduled for a worldwide launch this fall, Xbox is getting a less-than-enthusiastic reception from many Japanese consumers, retailers and game publishers.
While there seems to be general agreement that Xbox is technologically superior to PlayStation 2, experts say games matter more than hardware.
"You will definitely get better graphics with Xbox," said Konami's Hideo Kojima, designer of the best-selling "Metal Gear Solid" games, though he added: "I don't think that Xbox is that much better than PlayStation 2. Other than little improvements in graphics, I don't expect much difference."
Meantime, many executives suggest the Microsoft name carries a lot of ill will in the Japanese market. Computer games have never been a particularly hot item in the Japanese market. Because Xbox bears the Microsoft name, many Japanese consumers consider it more of an extension of PC gaming rather than a legitimate game console.
To shore up the Japanese front, Microsoft has set up partnerships with Sega and Tecmo, two companies with highly successful lines of arcade and home console games.
Robbie Bach, a Microsoft senior vice president who's called chief Xbox executive, said his company is up to the challenge. "If you are asking me if Japan is going to be our most challenging market, the answer is yes," he said. "But people are trying to put up barriers that I do not believe actually exist."
Envisioneering's Doherty likened the task to planning a D-Day invasion. "You have to get all these different armies and all these different aircraft and the Navy and the Marines together at the same time," he said. "It's a huge mission with huge risks and potentially huge rewards. Everybody has to arrive at the same time for Microsoft to win this war."
One arena in which Nintendo may go only lightly challenged is the market for young consumers.
"We certainly have been proud of our more youthful component, and we have been stronger than the other guys in (the) 12-and-under (category)," said Nintendo's Main.
He said the company's consoles and Sony's PlayStations have "more similar than dissimilar" appeal in the 13-to-17 age group and "failed by a wide margin" among 18- to 22-year-olds. That latter category, Main noted, is important because it's a bellwether and trendsetter.
He added that among those over 24, Nintendo regains appeal either for nostalgic reasons or because those in the category play with their own children.
But the asset that gives Nintendo its biggest boost is its long history in making games. While Microsoft and Sony seem to have concentrated on designing powerful hardware, Nintendo has paid attention to end results.
"Nintendo does not just develop new hardware for the sake of new hardware," Russo said. "They always try to deliver a new gameplay experience with that hardware. When we do see GameCube at launch, it's going to be with a unique experience."
Steven L. Kent is a free-lance writer and longtime observer of video games.