Dean Takahashi has a post at his San Jose Mercury News blog questioning Bill Gates’ claim that Sony, not Nintendo, is Microsoft’s real competition for the Xbox 360. Takahashi says the Wii might be an example of a product that satisfies the average user enough that they’ll “stop paying for more and more features in their products and then decide to buy a cheaper product that is good enough.”
As to Gates’ proclamation, of course he’s bluffing. Sony is Microsoft’s more immediate concern, because the 360 and PlayStation 3 are fighting for the same target audience. Microsoft will only make back its multibillion-dollar console development costs if enough potential PS3 customers choose the 360 instead. Knocking off Sony would take care of that. But Nintendo’s success with the Wii and DS takes away another avenue for Microsoft to recoup its costs and take on Sony.
That is, one important way Microsoft could challenge Sony is not by going after potential PS3 buyers but by reaching out to a nongaming or more mainstream audience. A lot of people have multiple consoles, but for even more people video games are a zero-sum game: a Wii buyer means a lost potential Xbox 360 buyer. So all those new Wii and DS fans take away a major pool of potential 360 buyers. Microsoft could have foreseen that and tried since the beginning to attract a more mainstream audience the way Nintendo has. But instead the focus has been on things like Xbox Live, which appeals more to hardcore gamers than people who just want to play some fun, accessible games. Bringing back an old-school arcade spirit won’t attract casual gamers the way Wii Sports does.
As I wrote in this post (when Wii was still known as Revolution),
Xbox Live is pretty much an “If you build it, they will come” strategy. Microsoft isn’t going out trying to convince casual gamers to buy a 360 because of the simple games; the idea is that a father, girlfriend, uncle of a 360 buyer who doesn’t normally play games will see that there’s something for them, too, and they might try out the system when the real gamer is at school or at work. Nintendo, on the other hand, is trying to actively create a new audience. The Revolution is positioned in every way to do this — the low price, the controller, the very public statements about the “blue ocean” strategy — and the DS is laying the groundwork for it.
We’ll see over the next couple of years which approach is best, but I’m putting my money on Nintendo. As the comics world has seen, you can’t build an audience by simply proclaiming how great your medium is; offering the same thing or revamped versions of the thing that outsiders weren’t buying in the first place; and hoping people will somehow be attracted. You have to go out and convince them why they should be playing and show them there are games outside their vision of what video games are.
Microsoft and Sony are doing this to an extent. Katamari Damacy, Guitar Hero, and Shadow of the Colossus were attempts on the PlayStation 2 to offer something different. Table Tennis and Viva Pinata have done the same on the Xbox 360. But the companies haven’t built this message and approach into their overall vision for their systems. Nintendo has. Everything they say and do with the Wii and DS are attempts at selling their different approach and different offerings to a more mainstream audience. And it works because they have the interesting tech — the touch screen, the motion control — and the games to back up what would otherwise just be PR-speak.
So the “good enough” explanation for Nintendo being a threat to Microsoft doesn’t really work. Or at least it’s too simplistic. If the DS and Wii games were all shooters and racers with bad graphics and less-pretty ports of Xbox 360 games — if it was just the same old stuff in lesser form — and still people were buying the systems in droves, then you could make the case that people are satisfied with the lesser technology. But Nintendo is offering a fundamentally different experience and different games. Yes, an acceptance of lesser graphics is part of it. But Nintendogs, Phoenix Wright, Brain Age, Super Mario DS, Wii Sports, Trauma Center, Rayman Raving Rabbids, 2D Castlevania, Mario Kart DS and others have succeeded because they offer something different — whether gameplay, price, innovation, pure fun, accessibility — from what’s available on other systems. And you can be sure Bill Gates understands this.
— January 23, 2007