The Battle For The Button Mashers

The seventh iteration of the great console wars is in full swing - it's an exciting time for business geeks like me. Last time around Sony's PS2 cleaned up handedly with about a 66% market share, newcomer Microsoft and their Xbox took around 15%, and the old stalwart Nintendo limped in at 12%. Oh yea, and Sega's Dreamcast (*snicker*) rounded the group out at 6% - they have since withdrawn from the console business.

This time around the unwashed masses are predicting the fall of goliath (note: please use this site as a voting mechanism, not a sales verifier - the numbers are dubious), while the professionals are saying the PS3 will eek out another victory.

For myself, I'm going to hedge a bit and say it's too early to tell. Even in a normal market, console wars don't start to shake out for 2-3 years after the initial release, and this go-round is far from normal, it's deliciously interesting.

Sony has placed their bets hard on Blu-Ray technology, including a built in player in all of their systems. This play could work out brilliantly if Blu-Ray becomes the standard; why pay $1000 for a new Blu-Ray player when you can pay $600 and get one along with a new PS3. Of course, if Blu-Ray becomes the next Betamax, consumers might not be to keen on the idea of paying an extra $200 for a useless DVD drive.

Nintendo, the ever innovative playing card company, has learned a very valuable lesson with their handheld the DS - if you can get girls and elderly to play games, you are going to make a mint. They're leading in this suit again with the Wii, and I think it has the most promise out of any of the strategies. They're not going to be squabbling over who gets the biggest piece of pie, ala Sony and Microsoft - they're baking a whole new cake. I wasn't entirely convinced they could persuade traditional non-gamers to make the leap until about three weeks ago when my wife saw a commercial for Wii Sports. Her response? "That looks fun! We should get one." My wife does not like video games. It might have something to do with being unable to get her husband's attention for hours out of the day. If they can convince her to pick one up, they can convince anybody.

As for Microsoft, they've combined two major competitive advantages into a very compelling reason to buy - early mover's advantage and an absolutely stellar online multiplayer system. Thanks to a year's worth of unchallenged sales, they have been able to seed the market with somewhere between 7-10 million machines - three times as many as their competitors combined. Couple this with Xbox live, an intuitive yet powerful tool to connect gamers and friends with each other, and you have a very convincing argument that many early adopters will be using to convince their friends to buy 360s.

Welcome to the next generation. It's gonna be a fun ride.