Console wars: Identity Crisis

The multimedia system vs gaming system argument is a popular one here at Flame War ADVANCE. While I personally believe that a dedicated device is always a better proposition than a multi-purpose device, I have plenty of friends who would rather buy a single system that satisfies all their mutimedia needs. And who can blame them?

The thought of a single, well-integrated multimedia device that fulfils the needs of any technophile or multimedia whore (pardon the term) is certainly appealing, but the question is, does such a device exist? The PS3 certainly has the potential in terms of what a powerhouse it is, and the 360 has Xbox Live. Both are invaluable assets and both could very well ensure the success of both machines. However, there are certainly plenty of flaws in relying on Live and Blu-Ray.

Will Blu-ray win the format war? Will users ever accept Xbox Live as a mainstream source for media, what with the increasing popularity of torrents? More importantly, will either Sony or Microsoft be able to keep costs down while pursuing their goal of winning the media war overall? Past experiences would indicate they can't. And to be honest, like so many others, that's really all I give a damn about. Problem is, do they know that?

Roger Ehrenburg over at Information Arbitrage points out the challenges Sony and Microsoft face in this regard in the most concise way possible. Two points.

Both consoles are currently in the midst of an identity crisis, having their legions of loyal fans but having a hard time breaking into the mainstream. A high price point. Consoles loaded with features that reflects a far grander strategy than simply gaming. In short, a high-risk strategy that is heavily dependent upon changing market perceptions about a gaming console's use and the features and functionality desired by the broader market.

But even more importantly, the issue to me is that Microsoft and Sony have to convince the recreational gamer of at least one of two things in order to buy their products:

1. The features and functionality over and above those of the Wii are worth paying for
2. The console should be viewed not simply as a gaming tool but as a multimedia vehicle in the living room

I'm inclined to agree. Honestly, I think the PS3 is going to do it before the 360 is, simply because Sony has won the console wars twice already because of going with the right media format at the right time. Blu-Ray is way ahead of its time, but in my eyes, that only gives Sony more time to prepare for when it becomes widely accepted. And why shouldn't it? Space requirements are going up, costs will start to come down. When HD-DVDs no longer suffice, BD-ROMs will be waiting to take over from them.

Anyhow, extremely interesting post by Roger. It focuses more on capturing the mainstream market like Nintendo has managed to do and acquiring a loyal base of customers and fans who do your PR for you, but the media aspect is extremely relevant in this regard as well. He also does an excellent job of pointing out several major flaws in the strategy Microsoft is employing to remain competitive in the gaming industry. Be sure to give it a read!