Microsoft's two top competitors in the video-game console business are pursuing very different strategies in competing with the company's...
LOS ANGELES —
Microsoft’s two top competitors in the video-game console business are pursuing very different strategies in competing with the company’s position of strength: online game and content networks.
Microsoft is the hands-down online leader with Xbox Live, which has more than 12 million members and has generated more than $1 billion in revenue for the company since 2005.
At the E3 Media and Business Summit here Tuesday, Sony introduced a new video-download store as part of its PlayStation Network and previewed major new online game initiatives. The company also announced a PlayStation 3 console, due in September, with twice the storage of its existing $400 model.
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Nintendo, on the other hand, made little mention of the online capabilities of its Wii console during a separate conference Tuesday. The company, which has U.S. headquarters in Redmond, instead focused on improvements to its innovative motion-sensing controllers and new games that take advantage of them.
The one exception was a new WiiSpeak microphone from Nintendo for $30 that allows online chatting.
Some industry observers see the online components of game consoles — which are really evolving into multipurpose entertainment and communications centers — becoming more important.
“My personal belief is that we’re going to see things continue to go up into the cloud, where the software is downloadable and there’s less physical product going forward,” said Hal Halpin, president of the Entertainment Consumers Association.
Game consoles are commonly referred to as the “Trojan horse” through which companies gain entry into living rooms to distribute their products and content. Halpin said the consoles are on their way to augmenting or replacing more of the online communications and content functions performed today with PCs.
Jack Tretton, president and chief executive of Sony Computer Entertainment America, said when Sony started work on the PlayStation 2 in 1995, “there was a real fear that individual experiences enabled by technology would lead to great isolation.”
That has proved not to be the case, he said, noting that digital technology has led to greater social connections.
“That’s especially true as we live more and more of our lives on the Internet. And for many next-generation consumers, being connected is all they’ve ever known,” Tretton said.
The PlayStation Network has been a weak point for Sony, analysts said. But the company took major strides Tuesday to improve it.
The biggest move is a long-anticipated video store that offers downloadable television shows and movies, to rent or buy, from MGM, Paramount and Warner Bros. Videos will be transferable to the PlayStation Portable, as well.
The move follows Microsoft’s partnerships with Netflix and NBC Universal to vastly expand video content available on Xbox Live.
In September, Sony said will it double the hard-drive storage of its 40-gigabyte PlayStation 3, keeping the $400 price. It will discontinue the 40-gigabyte model and an existing 80-gig model with additional features that sells for $500.
On Sunday, Microsoft announced plans for a 60-gigabyte Xbox 360 for $350.
Nintendo, meanwhile, is building on its successful strategy of natural user interface controls.
The company showed off an add-on to the Wii Remote that promises even greater sensitivity to gestures players use to control games. In one title due out next spring, “Wii Sports Resort,” a player can toss a Frisbee to a dog with a subtle flick of the wrist.
Another game coming later this year, “Wii Music,” allows players to use the Wii Remote as a high-tech air guitar of sorts. More than 60 instruments, including violin and taiko drums, can be “played.”
Nintendo brought U.S. snowboarding phenom Shaun White on stage to demonstrate a snowboarding game from Ubisoft built from the ground up to use the Wii Balance Board, another innovative peripheral device that senses a player’s weight shifts.
One knock on Nintendo has been that games from third-party publishers are overshadowed by Nintendo titles. Nintendo of America President Reggie Fils-Aime sought to counter that perception. Nineteen third-party Wii titles have surpassed U.S. sales of 400,000 units, he said.
Nintendo executives emphasized the master narrative of the games industry at present: Their products are finding favor beyond the typical hard-core audience. For example, women purchased or received 48 percent of the Nintendo DS portables sold in 2007.
Nintendo has sold more than 20 million DS devices in the U.S. through May. Globally, Fils-Aime expects nearly 100 million DS devices in the marketplace by March 2009.
“Make no mistake, the appeal of DS extends to the core as well,” said Cammie Dunaway, Nintendo of America’s sales and marketing head, before announcing one of the bigger surprises of the day:
A custom version of the immensely popular and unabashedly hard-core game “Grand Theft Auto” is coming to the DS this winter
Benjamin J. Romano: 206-464-2149 or email@example.com