PS3 + Wii + Xbox 360 = Fight!!

So, here we are.. 2007. The video game industry now has three big next-gen consoles out on the market and gamers all over are thrust with one big problem.

Which system is best for me?

Arguments will go on indefinitely as to which next-gen system will win the most sales and the most developers. (Wii, you are barely next-gen, no DVD?)

Obviously, Nintendo is leading the pack in terms of sheer excitement and new system sales. Microsoft is doing well with their sophomoric console. Which leaves us with the over-powered, slightly costly Sony PS3. Flamers jump in and flame-fest all you want later.

The prevailing thought seems to be, and recent interviews with top execs in various video game studios confirm this, that it's best to make the game that appeals to the most people and you'll make tons of money, which lets you develop more games, and so on.

But isn't this the outmoded thinking of business pre-information age?

Let me illustrate:
Then...
Hey! I've got a new product! It's called Shoez!
Everyone can use it. Shoez wrap around your feet! It keeps your feet comfy and warm!
Buy Shoez today. Walk softer, warmer!

Now...
Hey! I've got a new product! It's called Style!
It's a shoe that is comfortable, stylish and fits just you.
Breathe. Live. Express.

So, what's going on here? Both examples are selling a shoe, right? But one shoe is trying to please everyone and the other is reaching for a certain market. One shoe company is happy to make whatever it can selling itself as a generic item. The other shoe is making itself interesting to you and your life. That shoe is trying to become part of the way you live everyday, not just cover your feet.
I believe the the game industry is facing the very same problem thanks to that all pleasing, leave no one out machine called the PC. On the PC, you could make games for everyone. Old, young, male, female, hard-core, casual, whatever! It tried to please everyone thanks to it's similarly focused OS, but even in the PC hardware business, different is also very popular.
Just look at Alienware computers.

Alienware sells stylish computers that do what other computers can do if you're willing to spend the money. The same can be said of Nike shoes. They strive to sell shoes that become an accessory to your life, not just your feet.

Apple computers does the same with a tiny MP3 called the iPod nano - you choose the color. The new business model of the information age isn't sell a generic product to everyone. It's make a unique product that everyone will want in their lives.

Which brings us back to video games~
Now EA makes a lot of games and most of them are yearly sports releases, but shame on them for not getting that a baseball fan isn't the same a football fan or a basketball fan. Each customer base has it's favorite and some customers like them all. But how can a company with the experience and know how of EA look at Sony's PS3 and say it may not be profitable to make games for it?
A divergent video game market is easier to analyze. If the game systems are so different that it divides gamers into large groups, which games does each group prefer to buy? The video game console companies made it easier on developers! A Nintendo Wii fan may not like Xbox 360 and a Xbox 360 fan may not like the PS3. Simple. Developers may need to start figuring out which console is going to help them survive. Adaptation not expansion.

Sony is making the most powerful, versatile system. Microsoft is making the strongest online platform. Nintendo is making the most intuitive controller/console.

Which brings us back to the video game industry~
In 2006, Microsoft obviously sold more consoles than Nintendo or Sony. Nintendo sold the second largest amount and Sony was last. But wait? Microsoft wins again?? Or is 2007 going to be the year of the Wii? Or what?

The whole debate over Sony's demise, the coming revival of Nintendo's console business (oh yeah, N64 and Gamecube, yikes!!) or the newcomer with the great online strategy is largely a moot argument. Each system generally appeals to a different audience and each system appeals to a different pocket-book.
Installed base is a valid concept for business, but it may not be paint the whole picture. Will Sony learn from Microsoft's online business? Will future Wii owners buy a Xbox 360 to get in on the ability to play movies, download entertainment and play next-gen games? Will Microsoft use it's early lead to dominate the game frontier as it did with the operating system business? Only time will tell.

I personally am betting that the company that has made the biggest strides in the video game industry over the last 10 years, Sony, will continue to do what they do best and that's make strong sales, by securing hardware performance and wide developer support, just like the PC has done and continues to do. I think the age of exclusive franchise game licensing is over. Some say that may play into Microsoft's hands, I believe it will only help Sony. If all else fails, stick with the industry leader. Just look at the Playstation 2's meteoric sales totals.

Microsoft has a strong online strategy with Xbox LIVE, but many gamers are still not playing or paying for games online.
As for Nintendo, my lazy hands are still waiting for their real next-gen console which I estimate will be on the market within 3 years.

If Microsoft doesn't differentiate itself enough from Sony's do all PC competitor and better support original Xbox games, it may still be Dreamcasted. Leaving new gamers looking to a more powerful, eventually cheaper and better supported little gaming console called the PS3 or the real Nintendo Revolution.

Game on.