E3 2012: Will Microsoft, Sony or Nintendo Bow Out?

Sony

Playstation 3 is a terrific system. It’s got amazing exclusives, a half-decent online service that’s free unless you buy into the “plus” bit, and it’s a relatively solid, quit, unassuming piece of hardware (at least if you’ve bought the slim, which most PS3 players have). But for all the greatness of its library, Sony has made a lot of serious mistakes with the platform, starting at launch. Sony opted to leave the market open this generation for a full year to Microsoft so they could include Blu-ray in the PS3, which wasn’t ready yet in 2005. This choice not only cost them dramatically in terms of hardware (even at the outrageous price of $5-600 for a launch console, analysts believed the system to actually cost closer to $8-900 to produce), but it also meant that component costs remained high for an extended period while components for building the blue lasers used in Blu-ray drives were in short supply. Add a lackluster launch lineup, an Xbox 360 that was finally getting some AAA titles, and a Nintendo console nobody had the foresight to see as having a snowball’s chance in hell, and you had the perfect storm for a PS3-phat sized disaster. 5 years and several billion dollars in losses later, we arrive at today.

While PS3’s made remarkable progress, it’s still managed to remain in a distant third to Nintendo’s Wii, and a close second to Microsoft’s Xbox 360–a second which, it’s worth noting, every time they come close to eclipsing, Microsoft outmaneuvers them and somehow extends the lead yet again. It’s a cycle we’ve seen recur for 2, maybe 3 holidays in a row. Add to that a lackluster reception for their Wiimote inspired upgrade “Move” product (I was able to buy the complete kit on clearance for $49 barely 8 months after launch, and a few weeks later got a second Move for $20, down from $50, and a navigation controller for $12, down from $30, just to demonstrate the lengths that’ve been necessary to get it into people’s hands), 3rd party games that consistently perform better on Xbox 360 in both sales and, often, graphics, and things aren’t looking so happy for Sony.

It’s not all bad, though. Sony’ finally turning a profit on the PS3 console itself, though it looks like they probably won’t make back the billions they lost during the launch period this generation, and the console has achieved critical acclaim and wide acceptance. It’s probably never going to achieve PS2 levels of success, though, and the company’s shareholders will be unlikely to want a re-enactment of this generation’s financial performance. And really, who could blame them? The company really can’t afford to have a PS4 generation play out like the PS3 generation has.

The real bright side, though, is that PS3 is still plenty powerful to continue the slog forward, and will only realize better games and better profits the longer it does so. The graphics generated by both PS3 and Xbox 360 aren’t making anyone unhappy; very few gamers are pining for the next-gen, and almost none are criticizing the graphics of games like Gears of War 3, Uncharted 3 and many others. Nintendo is alone in needing to update their hardware, and 2012 is the year they do that. As for Sony, it’s possible they could also use PS3 as a client for an OnLive styled service, but as of yet there’s no conclusive evidence to even point in that direction.

How will it all end?

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