Kaz on the Wii

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In the meantime, Nintendo has done more to popularise video gaming than any other company.

It’s a very astute observation, but it doesn’t take in history. The most successful console is still the PS2 and it’s still going strong. I think that’s the console that really broke the barrier from video games being just for video gamers into more of a mass market on a global basis. Nintendo’s obviously done a great job in following that mass acceptance.

Then why didn’t the PS2 surpass the console installed base of the NES and 16-bit Gen consoles in Japan and the United States (when accounting for population growth)?

PS1 and PS2’s sales didn’t come so much as making console gaming more popular, so much as selling in many new territories. In the 80s and early 90s, global trade wasn’t as sophisticated as today. The NES didn’t get to make much headway into Europe because Nintendo was tied up in American courts fighting sore loser Atari. The 16-bit gen was very divided.

A new factor going on in the console business is that the trends of population growth and general economic prosperity have begun to spin in reverse. There is uncharted territory for the console business. The last ‘real’ recession was in the early 80s and the Atari 2600 exploded only in the early 80s.

Nintendo designed the Wii and even the DS to fight the depopulation trend that is very harmful to markets such as Japan. This is why Nintendo’s priority is on ‘expanding gaming’.

With the economic wheel now spinning in the reverse, something no console company really considered years ago, the Wii is again better positioned than its rivals to survive.

Wii will be held up to the lofty heights of the legendary Atari 2600 and NES when this generation has run its course. Atari 2600 and NES both expanded gaming and generated new markets where everyone said they could not exist.

It is simply not possible for any console to substancially perform better than the PS2 due to the trends moving so fiercely against gaming. PS2 was in a period of economic boom with both its competitors arriving a year later. Anyone with any foot in the business mind will definately point out that this recession is not the typical ‘thunderstorm’ recession that goes and passes. This one is more of the category 5 apocalyptic hurricane. Many industries are not going to survive it. The financial infrastructure of nations are going to be severely damaged if they survive.

The Macro environment is completely different than it has been in any other generation. This should be remembered in comparisons to previous generations. The fierce winds of this financial hurricane may even blow one or two console companies out of the market entirely.

Anyway, a bigger point should be made is that many of the Wii customers, as well as the DS customers, have never bought a game console or bought one within a decade. Since this is true, this raises the ugly question of: Where did all the customers of last gen go? To the moon? Or are they waiting for the PS3 to price drop so they can flood that console? We’ll see on that. But I suspect the Core Market is rapidly contracting. As the HD Twins perform price cuts, they are not swimming, not sinking, but still barely have their heads above water. Their sales aren’t really moving anywhere.

At the three year anniversary of any console, backwards compatibility to play older games should be a moot issue. After three years, there should be plenty of games for a new consumer to enjoy. Of course, taking out BC would greatly annoy customers. But Wii owners do not look forward to playing Gamecube games on their Wii like they did when the console launched. Xbox 360 customers don’t care too much about the backwards compatibility too much as they have plenty of games to play.

So why does BC keep coming up with the PS3?

One could say that the PS2 library was so vast, so awesome, that it doesn’t compare to the GC and Xbox game libraries. And there is some truth in this. The PS3 also originally had BC, and it was taken out much to customers’ displeasure. This is also very true. But there is a more likely reason why the BC complaint keeps appearing for the PS3.

It is that the PS3 library is not very appealing to customers. What are the great PS3 killer apps? Aside from multi-platform titles like Grand Theft Auto 4, the PS3 exclusives would be games like Metal Gear Solid 4, Little Big Planet, Uncharted, and the upcoming God of War. Yet, none of these are really resonating strongly with the market.

The driver of console purchases is appealing software. Complaints about the lack of PS3 BC reveals that the PS3 software library is not very enticing to consumers.

Sony is still losing money on the PS3. Perhaps Sony’s greatest mistake this generation was ripping out backwards compatibility. If you are going to lose money, you might as well lose money in favor of the consumer. If PS3 still had BC, it could leverage the PS2 and PS1 library to shore up its weak PS3 library. Hell, even I would buy one.