The recent release of the XBox was expected to shake up the console world. Instead, it is threatening to turn it inside out. In a recent interview for the Financial Times, Kunitake Ando, president and CEO of Sony, claimed that the new features introduced by the XBox to the console world, such as the hard drive and Ethernet adapter, will force SONY to rethink the time schedule for the release of the PS3.
"The biggest threat to the PlayStation 2 is that the Xbox changes the industry's life cycle," said Ando, who hinted that the life cycle of the PS2 will now be reduced to 3 years.
According to Ando, Microsoft is now considered by SONY to be the main competitor instead of the old rival Nintendo. "Nintendo's Game Cube has been a disappointment in Japan, they have sold only a third of what they had hoped," he said. "The PlayStation 2 is viewed by gamers as the games console to own."
Another indication of the importance with which SONY are facing the XBox's release is their decision to abandon their effort to create a hand held product to rival Nintendo's Game Boy Advance, in order to focus on the console market.
All these rather negative comments are in sharp contrast to market analyst views. In a recent report published by the International Development Group, it is predicted that the by 2004 there will be 34 million PlayStation 2 units in North America, from the estimated 7.2 million units currently installed in homes. IDG also predict that Microsoft's XBox will reach an installed base of about 20 million units in North America by 2004, while the Nintendo Game Cube will reach 18 million units for the same period.
Research for the PlayStation 3 has already begun with Toshiba and IBM pitching in for a $500 million, five year development plan. Production is scheduled to begin in 2004 and the chip promises to offer a completely new PlayStation.
To find out how Nintendo are reacting to the XBox's release follow the link below and to the right...
The advantage Nintendo had, of an earlier release than the XBox, fell victim to the production delays and now the company is faced with the possibility of an already saturated Christmas console market.
Nintendo is however, trying to rally support for their Game Cube console by focusing on their long history and strong tradition in the market. Over the years Nintendo has gathered some of the strongest game franchises in the industry, the rights to Pokemon and to both Mario Brothers are just an example of the titles Game Cube customers are sure to receive. This, the company hopes, will maintain a user loyalty factor which should help the company fight off the shadows which followed the poor sales record of the console in Japan.
Game Cube will also be $100 cheaper than the XBox, which is just as well since Nintendo is trying to shift its strategy in order to focus on the younger gamer. According to Gartner analyst P.J. McNealy, "They're going after the kiddie market, which is really different than what the Xbox is after". "Nintendo markets to kids and does quite well at that," McNealy said, "but it's the parents who shell out the money. They see it's $100 less, and that's just going to help reinforce their decision."
It seems obvious that Nintendo have decided to change their strategy in order to avoid the fierce competition of the big boys i.e. SONY and Microsoft. One thing is certain, if anyone can pull it off, they can. Rumours that they plan to start production of plastic mobile phones and toddler laptops are being fiercely denied.
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