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Apple's console?


The NZA
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this is strictly hypothetical, but its being thrown around in recent months too much not to talk about it.

 

Apple's made a killing off of marketing, for one angle, in much the same way Nintendo's been accused of trying to emulate this gen. Techies complain about overpriced ipods in a market of other devices with more storage/features priced far more competitively, but apple - in the words of Fahey, from the article this comes from - has "gone beyond making products. Now they simply create things people want."

 

The market's not stable thus far with more than 3 systems - some could argue more than 2, most times - and a lot of people will dismiss this fairly quickly, but then after NEC and Panasonic tried to battle Nintendo in the day, wasnt Sony just as easily dismissed by many of us?

 

The prospect of another company jumping into the console market is laughable to most people, and for good reasons. It isn't a market you can just leap right into. You need connections, capital, and consumers hungry for any product you put on the market. Over at Cnet's The Digital Home, Don Reisinger suggests that only one such company exists - Apple.

 

"Apple has the infrastructure in place through iTunes to create a real value proposition for those that want to extend the capability of their console beyond gaming and has the cash — about $20 billion — to not only invest in the best components on the market, but in an online gaming experience that could rival Xbox Live. That cash could also be put to good use by acquiring major developers (did someone say Take-Two?) that could go from third-party powerhouse to Apple's first-party publisher."

 

I dont see Nintendo, MS or Sony bowing out next gen, which most analysts put to start around late 2010/2011, so no idea how or when this'd fit in, but again, strictly hypothetical: thoughts?

 

as for me: im all for the controller innovation nintendo went for this gen, but i cant back casual shovelware. Nintendo's first party titles are always strong, but the lack of 3rd party is hurting them, my opinion (we're not talking sales, mind you), coupled with hardware that guarantees theyre missing out on this gen's biggest games. Conversely, MS and Sony are often too expensive, while one's riddled with hardware issues & charging for online, and the other overpriced themselves and made hardware exceptionally difficult (still, for some, though less so) to program for. If any company were to try to sidestep these weakness - a cheaper, powerful system designed for easier programming, attempting to cater to both hard & softcore markets - id be interested in checking them out, personally. Still, even if they put their hand in the mix, no idea if that's how apple would even play it.

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It took 2 generations of poor performance (I'm talking strictly market performance here, fanboys) for Sega's decline to be complete, from being an industry leader with the Genesis, Sega was out of the console business after the Saturn and the Dreamcast. Atari went from the dominant brand in the second generation with the 2600, with their decline beginning in the third gen with the 7800, to essentially skipping the fourth gen and bowing out after the Jaguar in the fifth gen. So, Atari and Sega are the only to real examples of industry leading brands to bow out, and both took two failed generations to bow out. Who knows if Microsoft and Sony would attempt an second round after a failed generation like Sega and Atari did, it is a more costly game to fail that it was back in the day, it might not take 2 gens these days.

 

Though, if you think about it, I wonder what effect having three systems at a time has on the industry. If you look at music and home movies, there's only one format and hundreds of manufacturers at a time, with music going from vinyl to 8-track to audio cassette, to CD, to digital download, and movies have a trend of competition for early adopters with one format rising to dominate, going from VHS/Beta, to VHS/Laserdisc, to DVD/Divx, to Blu-Ray/HD-DVD. It would be a strange world if in each format generation we had had 2 or 3 major formats without one becoming the industry standard, yet in video games, it's been the norm since the 4th gen, though, with the PS1 outselling N64 3 to 1, and out selling Saturn 6 to 1, and the PS2 out selling the Dreamcast and Gamecube about 6-7 to 1 each, the 5th and 6th gen each had clear dominaters (though not nearly as clear as with home video formats), and the spread is not nearly as pronounced in the current 7th gen as it was in the 5th and 6th gens. In fact, only the 4th and 7th gens have had been truly defined by more than one system. Maybe two or more dominant systems is the exception, not the rule.

 

PS Apple did try to get into the console market in collaboration with Bandai in the fifth gen with the Pippin. So if nothing else, they are fully aware of how hard and expensive breaking into a dominant position can be.

Edited by Reverend Jax
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some fair points - throwing down wiki console history is all good & well, though, sir, but comparing a genesis market - much less atari's lack of real competition in the day, and they still almost ended it for everyone - arent entirely applicable though, are they?

 

Nintendoo is the only one that operates without selling their hardware at a loss, likely because before this gen they were much smaller. MS and Sony have both hemorrhaged millions, if not billions, in long term investments to see a profit from their respective consoles, which is precisely why sega had to drop out despite the dreamcast going from 70 to 100 million sales at a decent pace; youve not only got to have deep pockets to stay in the game (again, unless they market a miracle like the wii), your gaming division is the one that has to bleed/justify the loss to the head division. i dont know that apple's that committed to the idea...and i guess the Pippin counts as experience, but i had to follow your link to remember it existed. I mean, no doubt Nokia's got some experience from getting their ass handed to them over the N-gage but i doubt that means theyre ready to try a real console yet.

 

wait, though - how is 2 system domination not basically the rule, though? i cant think of a gen after the NES where we didnt either have a clear market leader, or 2 competing with possibly another so far behind as to not really be competition.

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some fair points - throwing down wiki console history is all good & well, though, sir, but comparing a genesis market - much less atari's lack of real competition in the day, and they still almost ended it for everyone - arent entirely applicable though, are they?

 

People forget that there was competition at the time. In Atari's day, Intellivision sold 3 million units, and ColecoVision sold 6 million units, Odyssey sold 2 million. In the fourth gen, there was the Neo-Geo, the TurboGrafx-16, even the CD-i. If anything, there is less competition now, because no one goes in halfway like Phillips, Mattel, and Magnavox, with the exception of portables like the N-Gage, but even half-rate portables are rarer now than back in the day.

 

Nintendoo is the only one that operates without selling their hardware at a loss, likely because before this gen they were much smaller. MS and Sony have both hemorrhaged millions, if not billions, in long term investments to see a profit from their respective consoles, which is precisely why sega had to drop out despite the dreamcast going from 70 to 100 million sales at a decent pace; youve not only got to have deep pockets to stay in the game (again, unless they market a miracle like the wii), your gaming division is the one that has to bleed/justify the loss to the head division.

Yes, Sony and Microsoft sell their hardware at a loss, but are their gaming divisions really operating at a loss? How much do they lose in hardware sales versus how much do they make in licensing fees to software companies? You sell the hardware at a price that doesn't make money so you have a larger install base so you can make more money on software. They can plot this shit out. If they sell the PS3 at $800, they make X per system, don't sell as many systems, and make little money licensing since developers have a small base of people they can sell too. They sell the PS3 for $300, they take a loss, but sell many more units, and can get more from developers, eager to developer games for a base market of millions.

 

I heard this claim that Sony and Mircosoft sell their hardware at a loss all the time, and I believe it, but I'm not so sure either of them lose money for being in the industry.

 

i dont know that apple's that committed to the idea...and i guess the Pippin counts as experience, but i had to follow your link to remember it existed. I mean, no doubt Nokia's got some experience from getting their ass handed to them over the N-gage but i doubt that means theyre ready to try a real console yet.

 

My only point about Apple's experience with the Pippin is that they know, not just from studying the market, but from experience, that you can't throw your hat in unless you plan on being aggressive. You can't half-ass it, like I would claim that they do with some products (Apple-TV).

 

wait, though - how is 2 system domination not basically the rule, though? i cant think of a gen after the NES where we didnt either have a clear market leader, or 2 competing with possibly another so far behind as to not really be competition.

Well, it depends on what you consider domination. Is selling over 6 times are many units are you next closest competitor considered domination? When you look at these figures:

 

PlayStation 2: 140 million units

Xbox: 24 million units

GameCube: 21.74 million units

Dreamcast: 10.6 million units

 

Do you see a 1-system market, 3-system market, or a 4-system market? I mean, I could say the USA doesn't have a two-party system because of the Socialist Party, Green Party, Constitution Party, Libertarian Party, Marijuana Party, and the Alaska Secessionist Party, but we're talking about significant market share. Sony had 71% of the market, more than double the market share of it's three closest competitors combined. I look at the last gen and see it as being basically one-system dominated. The fifth gen,

 

PlayStation: 102.49 million

Nintendo 64: 32.93 million

Sega Saturn: 17 million

 

was equally Sony dominated (67%), at least by the half-way point. The third gen was also dominated by the NES (82%), and Atari dominated the second gen (73%). So depending on how you define 'dominate', four out of seven generations (2nd, 3rd, 5th, and 6th) were basically 1-system domination. Right now, while Nintendo has sold more consoles, it's pretty close nay Nintendo has less than 50% share. There's the added strangeness in this 7th gen than the gaming industry seems to have split in appealing to two distinct markets, the hardcore gaming, which Sony and Microsoft are fight for, and are pretty close in the numbers (at least in worldwide numbers), and casual gaming, which Nintendo (to their infinite credit) is responsible for identifying the niche, creating the strategy for how to exploit it, and investing and following through brilliantly on.

 

So, would Apple's strategy be to leave Sony and Microsoft to the hardcore gaming market, and attempt to take on Nintendo in the casual gaming niche they have created? In my opinion, 'serious' gaming is Apple's biggest weakness in the desktop/notebook market. Since getting a Mac, when people ask me if I would recommend one, I tell them if their not into PC gaming, then yes. So, considering Apple's strengths, it seems that if they decide to take on Nintendo is the casual gaming realm, they are the one company perfectly suited to take them on. I think you can admit with how Nintendo has performed in this new market, some competition could do them some good. They came out of the gate strong in generation, but have not really delivered on the promise and potential of the Wii.

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Yes, Sony and Microsoft sell their hardware at a loss, but are their gaming divisions really operating at a loss? How much do they lose in hardware sales versus how much do they make in licensing fees to software companies? You sell the hardware at a price that doesn't make money so you have a larger install base so you can make more money on software. They can plot this shit out. If they sell the PS3 at $800, they make X per system, don't sell as many systems, and make little money licensing since developers have a small base of people they can sell too. They sell the PS3 for $300, they take a loss, but sell many more units, and can get more from developers, eager to developer games for a base market of millions.

 

I know they posted losses of 3 billion so far. whether that comes from production costs or otherwise, im saying: you have to have huge backing to eat that kind of loss, much less hope to recoup it in a 10 year plan before completely abandoning the hardware. when we speak of sony here, we're speaking of the gaming division, to make the distinction from sony proper. i could find out more where those losses came exactly from, but im saying, that's the kind of thing the market now leads to, and companies like Sega - and like you said, a half-effort from apple - wont last long in.

 

Well, it depends on what you consider domination. Is selling over 6 times are many units are you next closest competitor considered domination? When you look at these figures:

Do you see a 1-system market, 3-system market, or a 4-system market? I mean, I could say the USA doesn't have a two-party system because of the Socialist Party, Green Party, Constitution Party, Libertarian Party, Marijuana Party, and the Alaska Secessionist Party, but we're talking about significant market share. Sony had 71% of the market, more than double the market share of it's three closest competitors combined. I look at the last gen and see it as being basically one-system dominated. The fifth gen,

was equally Sony dominated (67%), at least by the half-way point. The third gen was also dominated by the NES (82%), and Atari dominated the second gen (73%). So depending on how you define 'dominate', four out of seven generations (2nd, 3rd, 5th, and 6th) were basically 1-system domination. Right now, while Nintendo has sold more consoles, it's pretty close nay Nintendo has less than 50% share. There's the added strangeness in this 7th gen than the gaming industry seems to have split in appealing to two distinct markets, the hardcore gaming, which Sony and Microsoft are fight for, and are pretty close in the numbers (at least in worldwide numbers), and casual gaming, which Nintendo (to their infinite credit) is responsible for identifying the niche, creating the strategy for how to exploit it, and investing and following through brilliantly on.

 

yes, last gen was the peak of market domination by the ps2. prior, the ps1 made n64, saturn, dreamcast etc sales pale in comparison as well. there was a point (early on) when the Genesis and SNES were market competitors, but SNES held ground for far longer, though it was a much better showing than what the sega master system held, even internationally, vs the NES, which comes to my mind as the 2nd best example of market domination. The atari ones, we're going off the many systems they made, but primarily the 2600, which by its later years, i dont even recall seeing coleco/intel on the shelves. What im saying is: ive seen 1 major dominant console, with 2nd place trailing behind, and ive briefly seen 2 come closer, but i cant recall a time there's been more than 3 (viably) on the market at once. This isnt to say shit cant happen, just that it hasnt.

 

So, would Apple's strategy be to leave Sony and Microsoft to the hardcore gaming market, and attempt to take on Nintendo in the casual gaming niche they have created? In my opinion, 'serious' gaming is Apple's biggest weakness in the desktop/notebook market. Since getting a Mac, when people ask me if I would recommend one, I tell them if their not into PC gaming, then yes. So, considering Apple's strengths, it seems that if they decide to take on Nintendo is the casual gaming realm, they are the one company perfectly suited to take them on. I think you can admit with how Nintendo has performed in this new market, some competition could do them some good. They came out of the gate strong in generation, but have not really delivered on the promise and potential of the Wii.

 

no, they havent, and many think theyre gonna have to switch it up later on to keep consumer interest - but i think part of the reason people will still try to pull the "gimmick" card is we dont know how long casuals will pay attention, as its a new market. were nearing 2 years now and they still have shortages in some places, so its safe to say theyre in no immediate danger, and god knows even if america stopped buying them theyd still own japan.

i think you're right that apple'd shoot for that clientele but dont discount them too much for not having gaming under their belts; i understand they already got companies doing things for their iphone, and bear in mind sony didnt have much in the way of game studios at the start either...MS still doesnt really have any 1st party lineup to speak of. with 3rd party companies willing to go wherever the money leads, flagship characters arent as important to those outside of nintendo.

 

ps check this out:

 

At the Games Convention Developers Conference, Dave Perry from Earthworm Jim developer Shiny Entertainment stated that Sony lost more money selling PS3 at a loss than it made during the five years of PlayStation 2 peak sales. That figure is estimated as being in the US$3 billion ballpark. The data that Perry cited came from DFC Intelligence. Not taking a stance on the "console war", Perry was using this data to point out how much of an investment Sony was putting in the PS3.

 

Microsoft also has lost a lot of money on the Xbox 360 — that Red Ring of Death clusterfuck cost the company a billion dollars. Microsoft lost $4 billion on the original Xbox, and Sony, of course, was in the red with the PS2 for the first few years it launched. Seems like only Nintendo has this making-money-on-game-consoles schtick down.

 

i havent read much to the contrary of Perry's claims since.

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What im saying is: ive seen 1 major dominant console, with 2nd place trailing behind, and ive briefly seen 2 come closer, but i cant recall a time there's been more than 3 (viably) on the market at once. This isnt to say shit cant happen, just that it hasnt.

You can't recall now? I mean, anything can happen before the 7th gen ends, but you can't imagine this gen taking it's course with the Wii, PS3 and 360 still doing well by the end? You don't see that as a possibility. Two years in, I don't think any other gen had 3 major system that everyone took this seriously.

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no no, you're right about this gen, and its funny cause people trash analysts but a lot were saying sony couldnt keep dominating the way they were, that this one'd be more of a spread, its just that no one saw nintendo taking as big a piece as they have.

 

what im saying is, ive not seen a gen where more than 3 sustained, meaning, a 4th entry - if it managed to stay alive & justify itself - would be a first for me. weve had 3 before but never as close as theyve been so far this gen, so again, anything can happen but itd be a first.

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Agreed, it'd be a first, but this casual/hardcore split is something new, and like I said, for the past year Nintendo has been acting like they don't actually have any competition (as far as their releases and such). So many this is marking a change in the industry, and both the hardcore and casual markets could each sustain two major players.

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i wanted to do a hard/softcore thread at some point, because the line tends to blur on many games/genres.

 

if hardcore = length of game/complexity, werent many of the 8/16bit games we played "casual"? if the division is based on hardware complexity, how is it the wii controller/nunchuck feature just as many buttons as your standard xbox/ps3 controller? there's a clear line between, say, mini-games and things like mario galaxy, zelda etc but to isolate markets like that arbitrarily doesnt make sense to me.

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