As we all know, the videogame business is an extremely competetive business. It attracts a lot of interest and, like sports team, each side has its share of fans and haters. It is also a multibilliondollar business to the three major players where design decisions made today will make or break them for the next 6-7 years.

While the main external focus for Sony, Microsoft and Nintendo is on the performance of the present generation, they all have small teams right now making the critical decisions on how the next generation will look. Those decisions will shape what we play on 5 to 10 years from now. The internal development teams and their ideas are also some of the best protected secrets in the business.

If we try to look at the 360/PS3/Wii generation from a business pespective, and try to leave out any preferences and biases, what are the critical lessons from this generation that will shape the next generation? I think we all realize that while us fans can be highly biased and very passionate, the three big companies see this first and foremost as a business and will all try to make as much money they can.

I am extremely interested in what the knowledgeable VGChartz community thinks are the most important lessons learned from this generation and how that plays into the next generation.

Since I have the advantage of being first, here are my three business lessons learned from this generation. Apologies in advance if since these are easy pickings:

1) Launch pricing is critical. After the disappointing PS3 launch performance, I think that no console in the next generation will launch with a price over $400.

2) Brand loyalty is lower than I thought. I would estimate that each brand can get a 15-20% market share on brand loyalty alone even if the console is unexceptional (for example Gamecube). This leaves about 50% to fight for among the competitors. Sony must be enormously disappointed at going from a 60-70% marketshare to a 20-30% share.

3) Launching earlier than your competitors doesn't give a great advantage but it does give an advantage, especially if the competitors are supply contrained. Microsoft touted the "first to 10 million" argument that they would win this generation most people will agree that they lost that argument and will not end up winning.

Please post your three business lessons!

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Longtim lurker, first time poster!

 Their are a lot of people surprised by that but it is not the first time we see this.  SEGA had that problem before ,with the Sega Genesis they had a great console it even was marktleader in Europe but we didn't saw that group buying a Sega saturn.

I think that there will be no "Wii" next generation. I think the console that wins will look alot like the SNES. The Wii is very similiar to the NES, and I think that the gaming industry is a cycle. Every 15-20 years a console has to come along to capture a new audience. The back end of the cycle will see the most "core" games. The late PS- Early PS2 ara was laiden with core games. Toward the end of last gen we saw signs that casual games were rising with DDR and GH. The winner of the next gen will be the console with the most bridge games (SSB, Halo, MK, Mario, Zelda, DK, GT, and GTA). The FF, DQ, and other hardcore games will not cut it, but towards the end of next gen we will see a revivial of traditional core gaming.

1. Tapping the Blue Ocean definitely increases sales.
2. Listening to hardcore and elite gamers for business decisions is pretty much like listening to a pornstar on how not to get herpes.
3. Ignoring the younger gaming crowd is a sure fire way to tell parents not to buy a console.
4. Oh and those people who come up with product prices are morons.

Zelda, Halo, GTA are not bridge games. Otherwise i like this answer it's insightful. the next zelda based on prior comments could be.

Well, Innovation matters, since thds and wii lead are mainly beacause of that. If you take out the wiimote you have a xbox, plain and simple, while the ds is a gba with dual screen and touch screen. They are Colombus eggs, once made, it´s simple, but the move itself is genius.

Price matters. Don´t need to explain

Games matters, since x360 wouldn´t be around without the aggressive MS strategy of buying PS3 exclusives. Nintendo survived last two gens because of it´s games, like zelda and Mario. So next gen need great investment on new great games, in the first two years preferably, otherwise the custumer makes the jump towards other system.

Reliability matters. Ps3 wouldn´t be were it is without RRoD. Ninty always had a reputation of reliable consoles, so the custumer nows were he stands.

Give options to the custumer. The X360 is not $200 cheaper than PS3, because there´s lots of ad ons, like coolers and net cabbles, but it gives the perception of being cheaper by having different skus. PS3 could benifit of a cheaper Sku without some stuff like BC and other more expensive with everything. Now there´s only one very expensive sku the 80 gb, with the 160gb comming. The wii was always cheap.

And that´s it. It´s a litle biased towards ps3, but we have to agree it was the biggest business failure this gen, compared with the expectations, while the wii was a big success and the x360 was more successful than it´s predecessor.

That there are more soccer moms and little Timmys out there then hardcore gamers. New ideas > tradition. A few other things, but I can't seem to get them worded correctly...

P.S. Congratulations on your 0th post btw. 

I would say three lessons to learn:

1. The best possible marketing tool is your existing customers. Make some games that are very accessible and fun for parties.
2. There is no demograph you can't target a game to and sell it if you know what you're doing.
3. New ideas sell more consoles than taking existing ideas to the next level.

Basically, short minded strategies focused on introducing unrelated technology rather than promoting value and accessibility can lead to relative marketing disasters and reduce brand health.

1: Listening to what your most vocal customers want is a bad idea: They're not representative of the larger market, and want things that are really niche.
2: Novelty beats Price beats Quality.
3: No matter how hard you try, the hardcore will still hate you (Hardcore hates Wii for lack of support, 360 for RROD, PS3 for price)
4: Brand/Franchise don't mean anything in the long run. The best selling games this gen are all selling well because they use the word "Wii", which was openly mocked by basically everyone less than 2 years ago.
5: Anything anyone says about a game that is coming out more than 3 months away is a lie.
6: Hardware bundles/accessories actually work, both for Guitar Hero/Rockband and Wii Play/Fit.
7: Nintendo actually thinks it's crazy plans through: Be careful before you call something they announce stupid, because chances are it's going to outsell all your favorite franchises/consoles. Even if it does look really, really stupid.
8: Graphics aren't the end all, be all of game technology.
9: You can make some decent bank selling digitally distributed games.
10: Hardcore isn't core anymore. The business model has left us behind, and we're going to be relegated to the role of cine-philes, watching our bizarre indy releases while mocking all the trashy mainstream plop that gets pushed out by big studios.