Halo 3 Kicks Butt and the Game Industry Starts to Shift

Needless to say, like most of tech-savvy America, I’ve been playing Halo 3 for a good chunk of the weekend on my Xbox 360. (I’m not much of a player-vs.-player guy any more when it comes to first-person shooters, but do love the storyline.) And while I’ve been busy killing evil extraterrestrial Covenant forces, LucasArts may have just announced the killer new game that’ll make me want to fire up the Wii as well: In Star Wars: The Force Unleashed, the system’s motion-sensing controller actually becomes a lightsaber – how cool is that? Sony is also starting to do some really smart stuff (yes, it surprised me as well) in terms of revitalizing the PS2 and pushing hard on the PSP. 

In short, things are getting interesting in the gaming market – so let’s chat.

Halo 3: Way Better Than Expected

I really had my doubts about Halo 3 when I played with the beta, which was focused on the multiplayer portion of the game. As mentioned, I’m not a great head-to-head gamer and tend to live in massively multiplayer online games (MMOs) for the most part when playing, so I’m used to folks shooting with me instead of at me. 

Nonetheless, I loved the original Halo’s storyline and got so hooked on the game that I burned through it in about a week of my spare time. The worst was after a Thanksgiving dinner with my wife, where she wanted a romantic evening; I instead rushed upstairs, put on my sweats, and gamed until I finished the last level (where I had become stuck). It was like playing a rich sci-fi novel and I wanted to see how the story ended. (Hint: The hero didn’t get lucky in bed.)

I never really got into Halo 2 for some reason; it was OK, but it didn’t engage me like the first title in the series did. Halo 3, however, is wonderful: The storyline is once again rich, you now get to see much more of the power of the Xbox 360 platform (Halo 2 was optimized for its predecessor) and I’ve generally been having a ball playing  it all around (though I’m trying not to get my wife upset this time).  In fact, I liked the billion-dollar franchise’s latest installment so much I actually bought and read the Halo books. (Inside tip: The first one was good and gives you a lot of background into the Master Chief; the second one was horrible and was basically the game in textual form).

Anyhow, it turns out Microsoft and developer Bungie sold $170M of these things on the first day, easily eclipsing the performance of competing media properties like blockbuster movies and best-sellers. It just shows that when you do a great job it is possible to set records. Playing Halo 3 has been some of the most fun I’ve had gaming since, well, the original Halo

Bungie clearly deserves a standing ovation for Halo 3, a job incredibly well done. 

Wanting a Wii and a LIghtsaber

Even as Microsoft creeps on a come up, Nintendo isn’t snoozing… or I should say, perhaps, that LucasArts isn’t, having just announced their new lightsaber-enabled game for the Wii. Unfortunately, it won’t actually show up until after Christmas, but should help build momentum for the Wii anyway. It will also be available on the Xbox 360 and PlayStation 3, but the lightsaber feature will only initially work with the Wii’s amazing controllers. Now, Microsoft has also indicated that they are developing controllers similar to the Wii’s, but I haven’t seen them yet. Even Sony is rumored to be creating Wii-like controllers for the PS2 (as part of an effort to focus more on that platform).

However, I will say that this is the only game system I don’t have and, in what is an amazing piece of irony, this is the only one my wife wants us to have. Saying my wife is not a gamer would be an understatement, and finding something she likes in this area a near miracle.  

The lesson to be learned here? Nintendo changed the market with this system: Not only is it the most affordable, the company also got people up off the couch and exercising (well Dance Dance Revolution did that earlier, but that was a game… this is a gaming platform).  

That being said, I am really looking forward to what Nintendo has coming out later in the year and particularly looking forward to playing with that new Star Wars: The Force Unleashed’s unique control scheme.

Anyhow, Halo 3 leveled the field a bit, but I still think the Wii is the product to beat this year because of its price and because of its unique attraction to folks who aren’t gamers.  Up until Halo 3 launched, the only system people were telling me they wanted to buy this year was the Wii. 

Sony Gets Strategy

For most of the last two years, I’ve been under the impression that Sony is actually trying to go out of business. When they weren’t getting killed by their competitors they were committing suicide. Well, they finally got a new CEO in to run their entertainment unit and I’m happy to say that this guy seems to have a clue. In fact, he may be brilliant. Either way, it’s a much needed change for the company. 

This year the PS3 is really priced out of the segment and it is clear they can’t catch either the Wii or the Xbox 360 realistically before the end of next year, even if they get some great games (and I’m not aware of anything like Halo 3 that’s coming exclusively for the system). However, the PS2 installed base still makes all next-generation game consoles look nearly insignificant by comparison – with the system still vastly less expensive than even the Wii and game developers continuing to ship solid games for the platform, it continues to dominate at retail.

What Sony appears to be doing is shifting promotional dollars back to the PS2 and extending its life as it is more likely to generate strong revenues and profits (because it doesn’t require the massive subsidies or cash outlays the PS3 does). And if the market shifts back to the PS2 strongly, which isn’t a given, that alone could put the gaming division back into the black. 

The PSP has also been reduced in price, and I’ve seen a number of games come out for it that look rather interesting – not to mention still think  that it is a better technology deal than the DS is. On the other hand, the DS, much like the Wii, is appealing more and more to a broader audience with games that appeal to women, so it clearly is going to put up a fight. Still, the PSP is vastly more competitive in its space than the PS3 is and Sony also appears to be shifting heavy market support to it. Personally, I think it remains one of the best values in the tech market and with a couple of memory sticks isn’t a bad alternative to the vastly more expensive iPod Touch (and plays killer games to boot).  

As for the new Sony Walkman MP3 players, these correct a significant problem with Sony’s MP3 line which suffered due to a hard, iTunes-like connection to Sony’s horrid music service and the use of their unique DRM technology which was so bad I don’t actually have a word for it. The current devices support most of the common standards including subscription music services, are still very nice looking and provide decent value and are a strong alternative to other products that are out there. It’s kind of hard to believe these are actually coming from Sony. I actually think the A916 with Digital TV is a better product than the very nice Apple iPod Touch. Sony could have owned this market (I’d argue that they should have) – and it looks like they are going to try to take it back. 

Overall, if Sony keeps this up they may actually start kicking other company’s butts as opposed to constantly kicking their own. I don’t know what they are paying this new CEO, but it probably isn’t enough. Nice work. 

Wrapping Up

What I think is interesting is that we are entering the big consumer buying season and all three gaming companies, for once, are on their game and playing really hard. Sony comes in with the greatest disadvantage on the new hardware platforms, but is leveraging well its older dominant platform which largely mitigates this problem. Sony is also pushing the PSP and their new MP3 lines hard, giving the entire unit the potential for a very strong 4th quarter. The Wii has the least going on in terms of truly exciting games, but is the most exciting and affordable platform and is the only one of the three major next-generation consoles that is aggressively growing the overall gaming segment. Granted, Microsoft just hit one out of the park with Halo 3, has the largest game library of all next-gen systems on its Xbox 360, and has some Wii-like controllers coming which could allow its machines to approach the kind of excitement the Wii enjoys if the right games show up as well…  

One thing, however, that folks should remember is that it is a combination of great games and low entry price that makes for a very successful system. Sony forgot that latter point, Nintendo has yet to really hit hard on the former and Microsoft is busy straddling the fence. However, when it comes to really moving next-generation game consoles, the magic number will be $200. Whoever remembers this and prices units accordingly will likely own the category.

I’m not going to begin to call this holiday season a wrap, though –  the best news is there really is no bad news here and you’ll have all the choices you want come Thanksgiving and beyond. I can hardly wait till Christmas!

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