The killer app problem is being discussed here. In it, it is proposed that one killer app in the videogame business now can make a difference. This may of been true in the past, but not now.
In the beginning, you had arcades. The company that had the most home versions of the top arcade games won. More focuses was THE hot arcade game of the time. The company that had that, ended up being the top seller.
Then came Nintendo, with Super Mario Bros. first, and a bunch of Vs. arcade games on the NES. They generated interest with these, and also worked out the third party angle, setting the licensing model we have to day that make things sustainable. Back then, you were able to have a single killer app.
Well, as time has gone on, the market has gotten MUCH larger and more fragmented. One killer app alone won't turn the table. One can still possibly generate a market for a machine. Multiple ones give people a chance to make a difference. I will say we may be looking at an exception here, and that is Wii Sports and motion control. Nintendo now owns the motion control market. It has really no competition at all for it. Anything Sony ot Microsoft tries looks like a bad knockoff.
In regards to all this, there is a problem if you think you will get a killer app. Companies want to make money off established genres with known markets. This means that something like Gran Turismo is attempted to be countered by Microsoft and Forza. If the title is a third-party killer app, then console makers bribe to get it, and you have the likes of Microsoft stealing Final Fantasy and making the 360 the place for GTA.
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