Recently, Sony announced that it has shipped 10 million PS2 units into stores worldwide, and by many industry estimates the company could reach twice that number by the time the Xbox launches this fall. So we must ask, is it even possible for Microsoft to catch up in the next-generation console war?
It’s okay to be second (Nintendo has been profitable for years without worrying about market share domination), but Microsoft is not entering the console market to control a small niche; the company is investing billions to control the market. It won’t be easy, however.
These are the 10 key things Microsoft must do if it ever hopes to catch up with Sony.
1: Start Strong
In the coming months we will harp on this one point more than any other, but a strong launch for the Xbox is absolutely crucial for its future success. The Xbox will not be able to catch the PS2 in a year (or maybe even two or three), but the console needs a massive launch to get it on the right road.
A well-received launch will encourage more developers to create games for the system, and will entice undecided gamers who want to root for someone other than Sony. Everyone wants to bank on a winner. A strong launch help perpetuate this image.
The PlayStation blew the Saturn out of the water during its early launch months. After that, the war was already over.
2: Use The Marketing Budget Wisely
Microsoft has a massive $500,000,000 marketing budget for the first 18 months of the Xbox launch. How the company uses that money will be a major factor in the overall cultural acceptance of the Xbox. Unless the mega-marketing campaign makes a cultural impact, the Xbox won’t have the momentum it needs to catch the PS2.
Microsoft created the biggest software launch in PC history when it spent only a fraction of this Xbox marketing budget on the debut of Windows 95. If it can repeat this success (especially with a TV advertising blitz), it will be able to tap into a market bigger than the traditional gaming market.
Sega introduced its Sega Scream ad campaign and outsold the SNES with its Genesis for years.
3: Expand The Console Market
Sony transformed the videogame market with the PlayStation because it reached an audience that was larger than the traditional gaming audience. If Microsoft hopes to catch Sony, it needs to expand the console market to new heights.
If the battleground is for the hearts and minds of hardcore gamers, Sony already has too much of a lead for anyone to catch up. However, if Microsoft is able to reach casual gamers and even non-gamers, the company could surprise us all.
Sony introduced millions of people to console gaming with the PlayStation and enjoyed the support of the vast majority of those newly indoctrinated gamers.
4: Think Globally…
The three major battlefields that will determine the winner in any modern console war are Japan, North America and Europe. Sony is scoring big in all three territories right now, and Microsoft will need to do the same if it ever wants to challenge the PS2 for number one.
The one weak spot that Microsoft faces right now is certainly Japan. And the company is making strides to build a presence in that territory right now. Bill Gates will deliver the TGS Keynote address and finally reveal his company’s plans for the Xbox in Japan. How gamers in Japan receive the company’s big pitch will be a major factor in the Xbox’s ultimate ability to catch the PS2.
Sega sold a large number of Dreamcasts in the US, but without strong support in Japan, the console simply couldn’t make it for the long haul.
5: …But Build Locally
Even though Japan is important, the bulk of the Xbox’s early success will be based in the US and Europe. Microsoft has already developed strong support from both US and European developers, and it needs to maintain this support to build a foundation for the future.
Atari started this whole console business as a North America-based company.
6: Develop Key Exclusive Titles
It seems that Japanese companies are more willing to develop one-console exclusive titles, while North American developers try to spread their titles over several systems. Microsoft needs to change this mindset with its core developers, because the Xbox desperately needs must-have exclusive titles — and they need to continue to flow regularly for years into the Xbox life cycle.
Exclusive, big-name titles are the motivation that hardcore gamers need to purchase more than one console, and this dual ownership will certainly help erode Sony’s lead.
Nintendo continues to thrive in today’s competitive console market because it has exclusive titles like Mario and Zelda that sell systems all by themselves.
7: Play To The Xbox’s Unique Strengths
The PlayStation2 does not have a built-in hard drive and it also lacks a broadband network adapter. If developers are able to use these features to make console gaming far more enjoyable on the Xbox, Microsoft will quickly begin to close the gap with the PS2.
The PC has traditionally held strong as a gaming platform because it could do things that no console could.
8: Make Sure The Price Is Right
No matter what else Microsoft does with the Xbox before launch, the console’s price will be a major factor in every buying decision. If the Xbox is more expensive than the PS2, it will make a purchase decision difficult. If the price is too low, Microsoft may never be able to recoup initial losses with future software sales. This tightrope balancing act could make or break the next-generation console showdown.
The Saturn launched for $399. The rest is history.
9: Exploit Sony’s Weaknesses
The success of the PS2 launch is not necessarily the result of a perfect Sony plan. In fact, Sony has made several mistakes during the PS2 launch. (For example, Sony has not provided the kind of technological support that some developers expected.) Microsoft is currently exploiting that weakness by providing far better support to developers. Microsoft is also working with retailers to offer them similar advantages over Sony. This kind of battle mentality is necessary to win a console war.
Sony wooed developers onto the PlayStation because they were treated poorly by Nintendo, and weren’t supported enough (in terms of technology) by Sega at that time.
10: Play For The Long Haul
Like we said before, even under the best possible circumstances Microsoft will need years to catch up with Sony. Panic in the early stages could halt any chance of future competition in this generation.
It’s very important to remember that in the past, Microsoft has been willing to be number two for years until it finally overwhelms its opponent. The company is very likely willing to build during this generation and make the big challenge to Sony with Xbox2.