Who's Afraid of the big bad XBOX?

  05/25/2001 11:11:11 AM MDT Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

More of the same, but my impressions of e3 couldn't have been more accurate.
  It's not like the first time I mentioned Sony and Nintendo feared Microsoft and the XBOX was in my articles during and following e3. Unfortunately some people just don't want to hear the truth.

  Negative and unprofessional comments from Sony and Nintendo directed towards Microsofts' XBOX really started years ago when the word began to spread about Microsoft entering the Video Game System hardware market. It happened before Sega decided to exit the market earlier this year.

  When the XBOX began receiving thousands of followers and game players anticipating it's release and information, sales of the SONY Playstation 1, 2 and their software as well as all Nintendo hardware and software began to drop. Both Nintendo and SONY sent threatening letters to retailers, SONY specifically pointing out the XBOX should not be talked about - period.

  That's not all, I reported on Nintendo's negative current financial situation, though many didn't listen. Yesterday, the 24th of May, 2001, Nintendo had their annual financial meeting. I was right, and their operating profit was down a huge 42% despite the strong GameBoy Advance Japan sales. I had reported earlier that they were doing so bad financially, that they were buying back 10,000 shares of their company stock to avoid a takeover, and those words were straight from Nintendo themselves.

  Thursday May 24th was a big day for Nintendo, it was their annual financial meeting. Both SONY and Nintendo decided to continue their negative comments towards Microsoft and the XBOX and gave plenty of quotes to the press this time. Their previous threatening letters to retailers only surfaced after retailers came forward with them.

  The last day of e3 which I reported on here outlines Sony and Nintendos' comments in an open debate on the future of the console gaming industry with Microsoft being the third on the panel. Sony was less than polite and as I outlined with their comments showed their fear of Microsoft. Here we go again.

  It started with Sony on Wednesday when Ken Kutaragi, president of Sony Computer Entertainment had this to say about Microsoft with the Financial Times:
   ...he declared Microsoft's XBOX "finished" in the battle for the next generation of video game consoles.
   "Microsoft was finished before it even got started. They have no games," Mr Kutaragi said in an interview with the Financial Times. "Microsoft has put itself out of the game. Retailers in the US are already disappointed."
   Mr Kutaragi said Microsoft's exhibit had been "disappointing: it lacked good software and the hardware was unimpressive...Microsoft does not understand the entertainment business," he said. "The processing speed of their console is not fast enough and the graphics were rough."
   Mr Kutaragi said that US retailers were also pessimistic about Xbox. "Retailers told me that on a dollar base, they expect 70 per cent of their sales will come from PlayStation. The remaining 30 per cent will come from Nintendo and Xbox but almost all of that will be from Nintendo."
   "The next game platform belongs to Sony and Nintendo," he said, referring to the next-generation consoles.

  On Thursday, Nintendo president Yamauchi Hiroshi backed up Sony against Microsoft's XBOX, and had this to say:
  Q: You have said that you were ready to suspend the launch of the Game Cube if it was poorly received at U.S. trade shows.
  Yamauchi: Fortunately, we got a good response. Local reports say that Nintendo received the same number of visitors as Microsoft, which is also launching a new machine. But at the Microsoft booth visitors just looked and moved on, but the Nintendo booth was crowded with people trying out the machine. I believe that people were interested in Game Cube's unique software. So naturally we'll go ahead with sales as planned.
  Q: GameCube is being launched at around the same time as Microsoft's Xbox. Will that have any impact?
  Yamauchi: The ideas behind XBOX and GameCube are fundamentally different. XBOX has a built-in hard drive and is being touted as an extension of a PC. Microsoft is going after performance only, and does not understand that the game is played with software. A Nintendo is ultimately a toy. It is the most advanced machine for playing games, and it is totally different from the Microsoft product. It is just like trying to compare a sumo wrestler and pro wrestler; they play by totally different rules. We do not consider Microsoft to be our competitor.
  Q: Why did the company set the recommended retail price more than 10,000 yen lower than PlayStation 2 and XBOX?
  Yamauchi: People do not play with the game machine itself. They play with the software, and they are forced to purchase a game machine in order to use the software. Therefore the price of the machine should be as cheap as possible.
  Q: Other companies have begun to launch Internet games.
  Yamauchi: The Internet games available today are for hard-core gamers. I don't believe the general public is going to be very interested in them. And I doubt that Net games will turn out to be profitable. There is only interest in these games because NTT DoCoMo Inc has profited from i-mode. I am not sure if content providers have made any money. Unless the business proves profitable, Nintendo will not be involved in Internet games.
  Q: What is the software strategy for GameCube?
  Yamauchi: Although sales of the GameBoy Advance have been good, sales of exclusive software have been sluggish because too many titles were released at the same time. So when it comes to the domestic launch of GameCube, Nintendo will release only two software titles. We hope to attract consumers with a few really great games.

  Starting with SONY's comments from president Ken Kutaragi, let me set the facts straight - yet once again. "They have no games" - The Microsoft XBOX has over 80 exclusive games, and over 250 developers working on confirmed titles. The XBOX will also launch with more scheduled titles November 8th than the Nintendo GameCube or the Playstation 2 will have between November and December 31st of 2001. On to another comment Ken made... "Retailers in the US are disappointed (in the XBOX)." It's too bad Ken didn't name names here, but in fact, there have been so many pre-orders for the XBOX, Microsoft has had to tell the retailers to stop taking them until early summer, but to honor as many as they have taken thus far, and this could very well be dissapointing. Stores like GameSpot, FuncoLand, EB, Software ETC., and Babbages have all taken pre-orders, and in every case the numbers of pre-orders they have are impressive at the least.

  Continuing with SONY's comments from Ken, "Microsoft does not understand the entertainment business," he said. "The processing speed of their console is not fast enough and the graphics were rough." Microsoft doesn't understand the entertainment business? I would like to say that Paul Allen, the co-founder of Microsoft not only owns the Seattle SeaHawks Sports Franchise, but has released several blockbuster movies like "Deep Impact" - the comet movie, surely he understands the entertainment business. More so on this, Microsoft Windows Software has logged countless hours of PC Entertainment, being not only the foundation for the PC game industry, but Windows Media Player, Movie Player, and let's not forget Solitare and MineSweeper.

  Still in responding to Ken's comments on Microsoft and the XBOX. Ok, "processing speed of their console is not fast enough and the graphics were rough", not fast enough, and graphics were rough is an opinion statement; NO FACTS. The fact is that not only is the Microsoft XBOX superior in every aspect to the Sony Playstation 2 technically, but on the subject of Graphics contains the worlds most advanced and technically superior Graphics Processing Unit. I'll leave it here with a comment from the lead developer from Dead or Alive 3, a 100% XBOX exclusive title from Techmo (one of Microsofts' Japanese Developers). "it's the only machine that can accomplish our vision and these graphics." (take a look at DOA3, the XBOX Exclusive here)

  Moving on, and getting to Nintendos' president Hiroshi. "XBOX has a built-in hard drive and is being touted as an extension of a PC." Ok, this really doesn't deserve a response, but no the XBOX is a Video Game System silly Yamauchi, not an extension of the PC. Was he thinking of SONY perhaps? Maybe he's confused, oh well on to his next comment. "Microsoft is going after performance only, and does not understand that the game is played with software." First of all, Microsoft does understand performance, but if they'res another thing they DO understand it's the Software. Hello, Microsoft is the most successful and profitable Software company in the world Yamauchi. "We do not consider Microsoft to be our competitor." It certainly doesn't sound that way Yamauchi, but if you really don't think Microsoft is your competitor then not only do you not understand your own business model, but you do not comprehend yet how SONY beat you in the first place, and that is a shame because Nintendo is a great company.

  So what did Microsoft have to say, right after e3, and BEFORE Wednesday's and Thursday's comments from SONY and Nintendo?

  J Allard, the man partly responsible for leading the XBOX project within Microsoft had this to say in an after e3 interview by Computer and Video Games.
  Allard: The thing that struck me when I looked at the Nintendo reel is how they have such a strong visual look across the games, and I first looked at it and I said "that looks like an N64 game", but really it looks like a Nintendo game. Thereís this very, very distinct look and I think part of it has to do with the technology, maybe from the beginning but what they do, much like Disney did with animation, they focus so much energy and love on the characters. They put all the technology and all the investment and all the artistry into the characters and very, very spartan backgrounds and that, just thematically if you look across all the games it gives you a good sense for why people have such a strong bond with the characters and why it has such a distinct look. You know, you put in a Perfect Dark or a Goldeneye and it kind of scrambles the pot, but the games that theyíre showing, maybe with the exception of Rogue Squadron, all have that same distinct characterisation, and thatís a stereotype, but itís very powerful as it was with Disney. I walked by and I said "wow, Nintendo" - it just made me feel good. I think itíll be very successful. Itís a game console for kids but they do well with that audience.
  Q: Thatís a slight understatement, really, isnít it?
  Allard: Itís interesting that they say something differently than what they actually do and, you know, Peter Main will say that theyíre going to go with a broader audience, and maybe they will but they didnít demonstrate that at this show.
  Q: Itís interesting that youíve got such strong feelings about Nintendo games - what do you think youíve actually learnt from Nintendo games that have been translated into the games that are on your stand?
  Allard: Well, the visual look, when you go for a particular demographic and you say, "Weíre going to go for younger kids and more cartoon-like games", I think you can have a consistent visual style and I think thatís very appealing in the younger demographic. With our focus being on the older demographic initially, and thatís very, very broad, we wonít have a visually consistent style. Itís just impossible, so I think the number one lesson we take away from Nintendo, and the history that Nintendoís had, is gameplay. Weíve been very, very focussed on gameplay and one thing that Iím happy about is because I did test the products on our showfloor - our gameplayís very strong. Even the button configurations across the games that weíre showing beforeÖ All the guidelines are consistent across third and first party games. So, I watch gamers walk up to the systems and they can enjoy the games immediately, and they can get into the games immediately. So I feel that thatís probably the strongest take-away from Nintendoís great history; that itís all about gameplay. Itís all about gameplay fundamentally.

  Clearly, you can see that even after Robbie Bach was attacked, on stage, during debate by SONY and Nintendo, even Robbie didn't attack back at them, and here J Allard didn't attack Nintendo. Later on J Allard talked about SONY, and pointed out that they weren't attacking SONY, but they're learning from the mistakes the industry has had, bringing up Matell, and Intellivision. J Allard went on to say, "are we so arrogant to say that we won't make any mistakes. No Way.".

  In response to the comments SONY made on Wednesday, Richard Teversham, head of the XBOX Marketing in the UK had this to say:
  "We did expect some reaction from the competition, but for Sony to react in such a way means we must be doing something right,"..."Ultimately, whoever brings innovative games to market that people want to play will win. We've shaken the whole industry with XBOX. We set a new bar and now the rest of them are trying to match it. At the end of the day it means better games, more choice and better gameplay."..."Rather than slagging off the competition, we want to focus on innovative gameplay. Kuturagi may wish it was over, but we've only just begun," said Teversham.

  That my readers are the plain hard facts. I've responed to SONY and Nintendo, and Microsoft XBOX marketing in the UK responded. I want to leave you with these facts though.

  The XBOX ships on November 8th, 2001 in the US with 600,000-800,000 units on day one available. The Sony Playstation 2 has an installed base of 3 million+ units here in the US now. SONY's PS2 sales are lagging here in the US, and also abroad, not only in software but hardware sales as well. Could the XBOX perhaps reach 50% of the installed base of the PS2 in the US by 2002? I'm more than confident that not only will they, they'll come closer to 60%, perhaps more.

  It is unprofessional to put down your competition not to mention it denotes fear thereof, and furthermore it doesn't really lend itself too well in the consumers' eyes. I for one have already seen many Nintendo and SONY game players turn their back and look even more closely at the Microsoft XBOX many deciding to purchase an XBOX now.

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