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What
Nintendo, Microsoft and Sony should focus on this year with their respective
consoles...
I
would advise the console makers to focus on lowering prices for their consoles. It will be tough for Nintendo and Sony, with the incredibly strong yen, but I
think consumers need a price point below $200 for the Wii and below $300 for
the PS3 before they will truly feel comfortable committing to a discretionary
purchase in 2009.
Nintendo
has strong demand as a defense against price cutting, but that demand should
begin to wane, now that they have sold so many Wiis.
Sony
has the opposite problem, with stagnant demand for their console. Consumers
don't fully appreciate why they need Wi-Fi, a hard drive or Blu-ray, and yet
Sony continues to believe that consumers should buy PS3 for these features.
In
my view, only a fraction of consumers wants Wi-Fi -- those who intend to play
online and who cannot figure out how to connect to the Internet with a cable.
Similarly, only a fraction wants a hard drive; witness the success of the Xbox
360 Arcade and the Wii as proof. An even smaller fraction is ready for Blu-ray.
The
bottom line is that Sony over-engineered their box, and they have consistently
expected consumers to appreciate that the extra features are "good for
them."
The truth is that consumers would probably prefer a more
streamlined offering, with increased functionality at a higher price. I think
Sony made a mistake getting rid of the 20Gb PS3, as I think that this should
have been their "core" model.
Microsoft
is a different animal. They have made some traction among the masses, but they
continue to be branded a hard-core console manufacturer. This is sort of like
Alienware advertising PCs for home office use.
I think Microsoft has to
continue to expand its Xbox Live Arcade and casual offering to reinforce that
the Arcade version of the 360 is a real alternative to the PS3. If Sony cuts
the PS3 price by $100, Microsoft has a steeper hill to climb.
What
game developers should focus on this year...
 Developers
should figure out how to make games that the Wii audience wants. The Wii
audience will buy mainstream games like Guitar Hero and Rock Band,
and if developers can figure out how to address this market, they can be
successful.
Looking at games like Carnival Games and Jillian
Michaels' Fitness Ultimatum, it's clear that the Wii owner will buy
anything, regardless of quality. Should developers successfully address this
audience, they can make some real coin.
Overall
prediction for the industry in 2009...
I
think this is the year that makes or breaks publishers. Blind dependence on
past market trends (i.e. make games for PlayStation and Xbox) won't work this
year.
The publishers must focus on the Wii, and they must make every effort to
market to that audience. If they do, we should see solid industry growth,
likely in the high teens.
If
they don't, I am afraid that Wiis will become paperweights, with owners
continuing to play Wii Sports and Wii Fit, and not buying new
software.
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Printer-Friendly Version
Michael
Pachter, 
THANK YOU! At least one of you gets what's going on. The first two analysts feel like there JUST looking at the numbers, but Ed takes a look at consumer reaction. All of these "budget" (read: crap) games are diluting the Wii, and Nintendo needs to address this problem. Thankfully, Sega is trying hard with House of the Dead and The Conduit. Here's hoping more developers see this and take action.
I wonder if Pachter is looking at anything besides numbers, and if he has anything to back up why he would suggest more people buy the Arcade unit of the Xbox 360. It is a worthless device solely because it does not come with a hard drive. I'm all for more and better games on XBLA, but these games are getting bigger and bigger, and the 256 Mb memory stick that comes with the Arcade unit will fill up WAY too quick, even compared to the 512 Mb hard drive on the Wii with Virtual Console. Sadly, Pachter suggests there are so many un-informed people out there that would purchase such a worthless device. Sad, but maybe true. Hopefully, the consumers prove him wrong, and Microsoft gets rid of the Arcade unit, and drops the 20 Gb unit to $250 - something that seems much more logical than trying to continue to push the Arcade sku.
That's not to say that the Arcade SKU is amazing, but I'd say "crippled" is a good word to replace your "worthless".
The arcade is selling at a higher pace than the Premium or Elite ones, that explains why the average retail price of the Xbox 360 has been dropping month after month (as stated at http://www.gamasutra.com/view/feature/3906/npd_behind_the_numbers_december_.php?
page=2 ). Consider this: the amount of hardcore gamers is limited, and most of them have already bought a PS3 and/or a Xbox 360 3 or 4 years into the life of each console (especially if we consider a new console may be coming in just 2 years). Microsoft would have dropped sales from 2007 to 2008 hadn't it been for the price cut (which entitles casual users to buy it). That is where the Arcade is useful: attracting casual users. Sure, it may not match an Elite with a 120gb, but don't compare the hardcore needs with the casual needs.
Tom, that is how the casual market behaves. It only takes Oprah Winfrey mention a book to make it a best-seller, doesn't matter if it is actually good or interesting. Name recognition is half a sale. Having a game sponsored by Jillian Michaels is more important than one by Sid Meier. Also, you may give too much importance to industry insiders and hardcores. Without the casual market, the console leader would end up selling 30m-50m consoles only.
I'm not saying that's right though. I thought that the lower cost of production for Wii would create a wide variety of new games by indies. Instead, Wii has a staggering amount of crap. I wonder if the Wii had a more integrated Demo or User Rating mechanism built in if that would help at all.
Ask yourself a question: Is the Wii really not good enough for you... or are you a pretentious elitist "hardcore" geek?
Get over yourselves.
I'm fairly sure Nintendo doesn't care very much about 3rd party software on the Wii. It's not affecting their first party software sales, so I'm not sure what they'd do to "address the problem." They make off licensing, I believe, regardless of 3rd party game quality, so more of them is good for them.
"It is unfortunate developers and publishers are so rarely putting their best team on Wii games. I'd love to see what would happen if they did."
I've seen what happens when a great team is put on a Wii game... you probably wouldn't be as impressed as you think.
Especially in these days, market perception will eventually play into how well the Wii sells in the future. Is it a fad? When does it not become a fad? Will Wii Motion Plus split the divide of "hardcore" and "casuals" further, or will it pull a Wii-Play and sell like hotcakes through out the year?
The main point I want to re-express here is to give a nod to Barton because he's not only looking at the numbers, but sees that the perception of Wii among "hardcore" gamers and most gaming press is becoming somewhat negative. As a consumer, and a "pretentious elitist hardcore geek", I appreciate the fact that he's not just consumed by the numbers and sees that perception does indeed tie into market share and profit.
Just look at Sony, posting their biggest loss in almost 10 years. Now, there are certainly other reasons that negative perception that account for their losses (i.e. price, lack of "good" exclusives), but it has to be said that the perception of Sony ties directly into their sales. And hey, my failing might be that I'm giving too much weight to perception in a business that more recently prefers profitability over evolution (save the occasional Miyamoto game), but the fact that Barton acknowledges this shows me he is more in tune to the industry than Pachter or Divnich, and I thank him for that silver lining he gives us consumers.
Err... or we already have a WiFi network, and prefer that to running a physical cable 40 feet across the house. Some of us don't live in a bedroom in our parent's house anymore, Michael. OK, my old XBox 360 is cabled... right into the Airport Express one foot away in my home theater and then wireless bridge to the main WDS node. Seriously, what's the intersect between the set of people unable to figure out a cable and the set of people with a home wi-fi network and the ability to retrieve the hexed up password?