Posted by: seanmalstrom | November 2, 2013

Email: Why were the PS1 and PS2 so successful?

Hi Maelstrom I just became a reader and would first just like to say thank you, I always wondered why the Wii was such a success and your theory of its imitation of the NES seems valid.

My question is you said because the wii was imitating in the NES that is why it was successful, so how about the PlayStation and PlayStation 2 as both sold over a 100 million.

Thanks

XXXXXX

P.S took me ages to find your email

It is intentional to make it hard for people to find my email. While some sites try to go the ‘accessibility route’ by making it ‘easy’ to get in contact with them, it is more fun to go the opposite approach. This means emails that show up are people who actually want to email. If I opened up a comments section that made things much easier, there would be so much crap coming in.

When we are talking about successful, we mean in the context that it is expanding the universe of gamers. It is pushing back the frontiers of non-gaming. This is why PONG is so successful. PONG is the first commercial video game. PONG created many gamers. However, many games today, such as Halo, have outsold PONG. Does this mean Halo is more successful than PONG? No. When Halo came around, there were tens of millions of established gamers and gaming was established in society. When PONG came to market, there were zero gamers. What is harder? Selling a book to avid readers or a book to people who have never read before?

From Nintendo’s 2005 perspective (source of this is Reggie Fils-Aime’s ‘breakfast presentation’ he gave game journalists where he laid out the entire Wii strategy), the video game industry was in very big trouble despite it being the PS2 Era. When you look at early video game consoles, they had to push uphill because there was no such thing as gamers or an established market of gamers. The executives at Atari thought the massive growth the Atari 2600 had was the norm which is why they gave the go ahead to make more E.T. cartridges than existing Atari 2600 consoles at the time. It is why Atari hit the wall so hard.

There are two types of sales: warm and cold. Cold sales is the toughest type of sales. Selling games to non-gamers is cold sales as that is considered a cold market. The reason why games like PONG or systems like the Atari 2600 are so iconic and even revered by their generation was because they converted people to video games. The Atari 2600 was expanding gaming. Competitors would arise, but that is no matter since it all crashed.

When the NES came around, it had two cold markets. Japan did not have the Atari 2600 (it was released in Japan after the NES) so the NES was to Japan as the Atari 2600 was to America. When the NES came to America, the resistance came from retailers and investors. Arcades were still going on strong. It was the arcades still going strong that convinced Nintendo of America to go ahead and push the NES against the resistance of retailers and investors (to counter the resistance of retailers, Nintendo called the NES an ‘entertainment system’ instead of a game console and put in R.O.B. which made the system more of a toy than a video game).

The NES then expanded beyond Atari 2600’s established influence. Nintendo came out with the Gameboy, which came with Tetris, which expanded gaming’s influence even more. All the NES sales were from Cold Market sales. The NES did not cannibalize another console’s market as there was no other console to devour. The Gameboy created a new species of console which had video games do a different job than the home consoles did.

Ever since then, game console business revolved around competition. Sega was not interested in expanding gaming further but in cannibalizing Nintendo’s market. Nintendo responded. Generations that followed with the Microsoft and Sony consoles had the same thing. Competition, not expansion, was the strategy.

Why did the PS1 and PS2 sell so much? For one, they beat their competitors. Sony could use its big company strengths to put out a console at a cheaper cost than their competitors. Sony could outmuscle anyone in marketing. Remember that Final Fantasy 7 marketing? That came from Sony. Most importantly, Sony did a ‘mass library’ strategy with their consoles. Since the Atari 2600’s collapse, console companies did not want to allow crap on their systems (or rather, did not want to allow crappy companies to put games on their system). Sony opened up the floodgates. You never know where the next hit will come from. GTA 1 and 2 were OK but dinky PC games. But with GTA 3, it rocketed the PS2 upward. Meanwhile, Nintendo was struggling to make first party games on their N64 and Gamecube systems without droughts.

The large sales numbers of the PS1 and PS2 owe themselves more to the macro-economic conditions. We were after the Cold War and the period of globalization. More markets were opening up. A console like the NES barely got to Europe. Compare that to PS1 and PS2 which were able to be distributed far more globally. Population growth was also a factor. More importantly, gamers who grew up with earlier systems were getting older and had more disposable income which they spent on gaming.

Despite all that, the PS1 and PS2 did not expand gaming socially. Gaming was becoming less cool with increasing stigma.

The PS3, PSP, and Vita are illustrative of Sony riding the macro-economic trends. Now that the macro-economic trends are going the opposite way, it is far, far more difficult for Sony’s systems to sell. The PSP did not create any new ‘gamers’. If anything, the PSP was relying on experienced Gameboy Advance players. Sony’s handheld was a competition console, not a market growth one. Sony may have thought they were doing ‘market growth’ by combining the game console with a general media device. But Apple’s iPod, iPhone, and iPad obliterated that.

There is an unspoken assumption going on in the Game Industry that the PS4 and “All in One” Xbox One will sell around the same number as their predecessors (80 million?) or maybe more due to the lack of popularity of the Nintendo console. We already have three Generation 8 consoles out today. What do these consoles’ sales tell us?

What do the sales of the 3DS, Vita, and Wii U say?

“LOL! It’s Nintendo. Of course, it will sell badly.”
“Sony doesn’t sell well with handhelds.”
“Smartphones and tablets have ruined dedicated handheld gaming.”

These are all rationalizations to not point out the elephant in the room: that we are in an economic depression. The macro-economic trends are extremely bad.

What does that mean? It means that the Wii, if it came out today, would be selling at the NORMAL sales rate instead of EXPLOSIVE sales rate. While the 3DS, Vita, and Wii U all have their problems, they would be performing at a much more stable rate if we had good macro-economic conditions. The Gamecube was a disaster even in good economic times. The Wii U is a Gamecube HD which is why it is selling lower than the Gamecube. If it weren’t for NSMB U holding up the console sales all alone, like Atlas holding the world, the disastrous sales would be apocalyptic.

When gaming is growing, software sales are consistent and ‘evergreen’. We saw this with software sales for the Wii and DS and for earlier generations of gaming. But when gaming is stagnant or in decline, software sales are front loaded. The ‘hardcore’ gamers buy the game in large numbers during the first couple of months and then the game dies. I think with an economic depression this trend will now include front-loaded hardware. Like Wii U’s hardware sales, I wouldn’t be surprised if the Xbone and PS4’s sales come mostly at the launch. Then, they just stagnate.

Why do you hear people so unexcited for the new consoles? “I’m just not feeling it for the Next Gen games, man!” These Next Gen games are just as crappy as they were last generation. What has changed is the macro-economic condition which is changing the definition of quality from gamers. Games are becoming more expensive, not less, to gamers. More and more gamers are waking up to the generic Hollywood-esque crap coming from the Game Industry.

Six months from now, we may see an extremely different tone from the Game Industry, I bet they won’t even release hardware numbers. EVERY business is in decline today. Does anyone really thing some GAME CONSOLES are going to buck the trends of the day? Get out of here. Not going to happen. The only way to survive and even prosper is for every console manufacturer to go Wii. Game companies need to make Wii-like games. If the Game Industry does not expand the market, it will shrink from the closing walls of the depression.

It is going to be very fun to watch game developers realize they no longer get to make games they want to make. The market will become too dangerous for that.

We are entering an era of economic depression that no one in the game industry has really seen. Not even Shigeru Miyamoto knows how to make games for an economic depression.

The question, emailer, you should ask is not why the PS1 and PS2 were so successful but why the PSP, PS3, and Vita were not. Sony has now put out more unsuccessful consoles than successful ones.


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