I have previously argued that both the Xbox and the Playstation must survive and that the competition between them is beneficial to gaming. However, with the current economic crisis worsening and with Nintendo happily counting its blessings (and money), perhaps the old adage “the enemy of my enemy is my friend” is something both companies may eventually consider.
Recently we’ve seen reports that Microsoft has cut 5000 jobs (according to Dean Takahashi approximately 30 percent of Microsoft’s internal video game testers have been laid off), closed another game studio (FASA, who made Crimson Skies for Xbox and Shadowrun for 360), and reported one of the worst quarters in its history in a surprise, pre-market disclosure, which includes an 11% slump in net income for the second quarter.
Sony isn’t faring much better either: after recently cutting 8000 jobs in December and promising more cuts, it expects to report a record annual operating loss of nearly US$3 billion because of the rapid deterioration of the global economy. Sony chief executive, Howard Stringer, told reporters at a news conference in Tokyo that business worsened across every major line, including games. It is no secret that Sony’s PS3 is trailing the console race.
There are, though, some analysts who point to the fact that the gaming industry should not be suffering from the recession as badly. First there is the fact that video games had their biggest year yet in 2008, eclipsing combined DVD/Blu-ray sales.
Then there is the opinion of Vancouver-based gaming industry analyst Steve Boscka, who says:
“”The industry is seeing great sales right now. Any company that’s attributing layoffs to the economic downturn is looking for excuses, because the numbers don’t back it up.”
However, it has to be said that though much of the sales success has been due to the incredible quality and value-for-length entertainment that gaming provides, it is Nintendo who is grabbing much of the success with their Wii and DS consoles. Nintendo accounted for 55% of all hardware sales in the U.S. last year, and saw its own sales figures jump 59% year-over-year.
Microsoft and Sony are companies with varied products beyond gaming and are increasingly under the financial pump and it could make sense for them to join forces in the gaming sector, cutting the expense of having to fight each other.
Of course they are each other’s greatest enemy in the console ‘war’ but by banding together they would be fighting two other common enemies: the economic enemy (the current crisis and the increasing costs for game console and software development) and the clever, rapidly rejuvenated Nintendo gaming empire, with its almost single-handed creation of a new casual gaming market with the Wii and DS.
There are thousands of practical reasons why this will most likely never happen and they would rather stubbornly fight until the other abandons console hardware as Sega did, but it is an interesting hypothetical if the economy continues to hit them hard and Nintendo keeps trouncing them in sales.
What if Microsoft and Sony were able to co-operate and form a new gaming-only focused company, each holding equal shares and influence?
What if, instead of planning Xbox Next or PS4 they banded together to create a ‘PlaystationX’ console, the greatest console collaboration ever?
They would streamline production and marketing costs, reduce their market competition, and keep both bands of loyal fans.
The Wii market may be different, but they may together do what each other separately has so far failed to do: seriously attract both the new and old gaming markets together for one console and pose a threat to Nintendo’s sales dominance.
This is ‘pie in the sky’ of course- each wants victory for itself, and I still wonder how innovative and powerful a console only competing with the Wii would be, but one thing is very attractive about this idea: I’d love to see the end of the ‘Fanboy Wars’ between the Xbots and Sony Droids which has divided gamers so much lately. (ed: Amen to that mate)
http://oxcgn.com/2009/01/27/playstationx-should-sony-and-microsoft-join-forces/
