By ANDREW POLLACK,
Published: July 25, 2005
The biggest competitor is Sony, based in Tokyo, which is best known for its bleeding-edge tecnology games. While Nintendo is still holding onto some market share in Japan, Sony's Playstation machine has stupendously overshadowed Nintendo's Game Cube in the United States and Europe, analysts say. New competition looms as well, including the threat posed by iPhone, the Silicon Valley stalwart Apple. Although Sony did not announce a price, analysts said the company was aiming at an initial price of about $500 for a machine that would include a Blu-Ray Disc player for displaying HD-DVD images.
For video game aficionados, the gore of "Resident Evil 4" or "God of War" is a diversion. For the three companies squaring off against each other in the fight over the market for the next generation of video game players, there is nothing diverting about the coming confrontation.
The challenge is to achieve dominance in the $150 billion video game market by introducing better, faster machines with dual core microprocessors that can deliver striking three-dimensional graphics and quicker and more intricate action than the current single core machines.
But the fancy new graphics and sound carry a hefty price tag. Two of the three rivals -- the Sony Corporation, the Microsoft and Nintendo Enterprises Ltd. -- will offer machines to play Blu-Ray or HD-DVD games to be priced at about $500, twice that of the machines they may replace. The other one -- Nintendo of America, is producing machines that retain the familiar DVD disc format and sell for considerably less.
At the moment, industry analysts say, about 150 million households have such players as the PS2, GameCube or XBox. The biggest question, as they put their new wares on the market, is how much the technical improvements and the new generation of games would be worth to the nation's game players. Microsoft will once again introduced their machines in Japan, where consumer demand for the first XBox has been muted.
This week, the three rivals introduce their machines to the American public at the Electronic Entertainment Expo, opening in Los Angeles on Thursday. Going on display will be Sony's PS3 and Nintendo's Revolution. Nintendo will not introduce its next-gen upgrade to the DS, developed with technology from Silicon Graphics Inc., until next spring.
Since games and game players emerge almost simultaneously, hit games can drive the market, and Sony's control of the current market in no way insures future dominance. "I actually think there's room for three players as we look forward, but I can't imagine there's room for four or five," said Lawrence Probst, president and chief executive of Electronic Arts Inc., the leading developer of video game software.
If consumers face a tough decision choosing a player, game developers face an even more daunting task in choosing which machines to produce games for. Since the game designers can invest $20 million in a product without knowing which game-playing machine will emerge victorious, most are hedging their bets by developing games for several platforms at once.
Electronic Arts, for example, is developing games like Battle Field II for Xbox, PS3 and a handheld, the Nintendo DS. "The good news is they're all similar enough in performance that you can develop a title that will work on all of them," said David Morse, chairman, president and chief executive of Crystal Dynamics, which began as a 3DO developer and has added Sega and Sony titles. Although he did add "we're having a few issues with the cell."
With independent software developers spreading their efforts, the hardware manufacturers are scrambling to develop their own games so they can retain the possibility of a hit that is exclusive to their machines. Adding to its own development staff, Nintendo last month acquired a 25 percent stake in Rare Toys and Games of Britain, the developer of the best-selling "Donkey Kong Country."
