The Xbox 360 should win this console war

For a while, I've said that Microsoft needs to find a way to attract more customers and bring more people on board. The first step, I said, was to lower the price of the Xbox 360 all over the world to increase its value to consumers and finally make it an ideal solution for customers.

Just one day after writing that here on The Digital Home, Microsoft did just that. And according to its own internal figures, Xbox 360 sales over the weekend subsequent to its announcement of the price cut were six times higher than sales over the previous weekend. Granted, these are internal Microsoft numbers and we'll need to wait another month to see what the impact will be when NPD releases its official numbers, but I don't doubt Microsoft's sales numbers at all.

Xbox 360

(Credit: CNET Networks)

From the beginning, the Xbox 360 had the kind of potential the other consoles simply didn't. Sure, the Wii is selling well and there's no sign of it slowing down, and finally the Playstation 3 is catching up to the rest of the pack, but Microsoft has an advantage aside from online gameplay now that it has taken the pricing lead from Nintendo.

The biggest barrier to entry for many consumers in the video game space is price. Because of that, millions of consumers needed to decide which console they prefer based on their budget. Since the Wii was released, those choosing with their wallets picked the Wii. But now, they can pick up the more powerful console at even more affordable price.

There are two ways to be successful in business: product differentiation or pricing differentiation. The way I see it, Microsoft has the advantage on both counts.

Let's face it--the Wii isn't something you play on a daily basis. I own a Wii (and the others, too) and I know all too well how most of my friends and I play: we pick up a game, play nonstop for a week or so, and never play it again. And during the time between playing games, my Wii goes largely unused. And unless a group of friends are over, I don't see much reason to pick up some Wii games and start playing.

In other words, the Wii is for fun and the console you'll normally play at a party. But for those times when you're alone, you simply won't.

The Playstation 3 is an entirely different story altogether. That console is more costly than its competitors and has the kind of third-party support Nintendo could only dream of. But when it's compared to the Xbox 360, it strikes me as an overpriced behemoth that fails on too many levels to make it an attractive buy at the store.

Sure, it has a Blu-ray player, which adds some value, but what else does it really offer that would justify someone paying $100 more for it than an Xbox 360? Better graphics? I don't think so. Better third-party support? No way. A quick glance at upcoming releases tells you that Microsoft is competing just as well, if not beating Sony on the software front. Better first-party games? Eh.

I'm a firm believer that the Wii really is a competitor to the Xbox 360 and the Playstation 3, but I'm suspect of its long-term success. As first-party titles continue to dominate the platform and third-party games (aside from Guitar Hero) sell better on the other platforms, can we forget that online gaming is practically nonexistent on the Wii and it's no longer the only affordable console on the market?

It's tough to say what the future will hold in the video game business. Everyone is under the impression that the Wii will take the prize of this generation's console war victor, but I'm not so quick to agree. Just because it's the leader right now by a relatively wide margin, can we expect it to perform this well indefinitely? I don't think so.

The Wii is out in front because it's the most innovative product on the market, it's the cheapest, and it has the most hype. But now it clings to just two of those components and eventually those will wear off too. That hype won't last another three or four years.

I'm not saying, though, that the Xbox 360 will be purchased instead of the Wii. In reality, I think the higher sales will be the result of Wii owners wanting to own a more powerful console with more features, but until the price cut, they simply weren't able to.

And as for the Playstation 3? Sony better find a way to reduce the price quickly or it'll be the forgotten console of this generation.

When it's all said and done, I'm a firm believer that the Xbox 360 will win the console war. At a price that's finally coaxing people to buy it, Asian sales rising, an unmatched online offering, and a large group of high-quality third-party titles on the way, things are looking up for Microsoft.

It may not be the leader in the short-term or even over the next year or two. But by the end of this generation, look for the Xbox 360 to take the lead and cement itself as the victor.

Check out Don's Digital Home podcast, Twitter feed, and FriendFeed.

[Lwestlie]

PS3=Forgotten Console? I agree the 360 has overall been a great machine. But I really feel that the 360 is already half way through its life cycle. Unlike the PS3 which Is merely a quarter of the way through. Microsoft will have to release another console within the next two-three years if they wanna stay comptetitive. I feel that the PS3 will conitnue to surprise and impress us whereas the 360 is already giving all its got. The 360 may have won the battle but I feel that the PS3 will win the war. 360=4yr machine PS3=6yr

[experiencemusic]

Agreed that from a hardware level the PS3 has more life than the XBOX. But XBOX can change the game experience at the software level and add on another year or two of value. See the fall UI release and focus of primetime game shows etc...

[dd13reis]

I don't agree with that logic. I don't think it has to release a new console sooner. Why would it do that? A couple years after that, the PS4 will make it obsolete and it'll find itself in a vicious circle.

-Don

[Lerianis]

Both the PS3 and XBox360 have a lot more life left in them. I think that they will be going strong 5-6 years from now, because they both have 1080p output.... it's the PICTURE QUALITY that saps power, and since they can do PC-class graphics pretty well...... they aren't going to need replaced for a LOOOOONG time.

[darksantos91]

In a way Microsoft has already made a "new" xbox. With the free software update coming soon, It will completly change the look and feel of the xbox dashboard, and its market place.

[Lwestlie]

Don-
Microsoft needs to do that if it wants to keep up with the PS3. It simply won't be able to keep up with the PS3 in a few years. You're right, they probably won't. But towards the end of this generation of consoles, your going to see the PS3 being far superior to the 360.

[Dan2288]

It doesn't matter what any of us WANT to believe in. The facts are in our faces: PS3 is the best damn console out there. Bottom line. Sony Playstation has been the most dominant force in the gaming industry since PS1 and PSX beat out N64. That's history. Just like the 360. Everyone I know that has both consoles plays PS3 wayyyy more than the 360. PS3 costs more, but that's because it's a better package with a better system that has better titles. Just because 360 beat PS3 to the first punch doesn't mean anything, because PS3 can take the hits. My point exactly- 360= 4yr machine PS3= 6yr machine. The PS3 has longer life. I just really don't want to see the XBOX 720 or PS4 until like 2015, but articles and sources point for an uprising in 2011-2012 :-\ PS4 will be sooo expensive. Maybe THEN 720 might take an upper hand, if it doesn't cost $500 itself- but as for NOW, PS3 has it in the bag.

[sapporobaby]

Good points Lwestlife,

This does not take into account that the Wii is a totally different device than the Xbox or PS3. The Wii is way more interactive while the PS3's and Xbox machines are point and shoot type devices. The Wii will continue to appeal to those who have had the other devices migrate to a new type of game experiences.

[dd13reis]

But how long will that last? I agree that the Wii is more interactive and it's different, but when will that luster wear off?

-Don

[rucknrun]

The XBOX makes you pay for everything where the playstation does not there is a lot more included with the Playstation. I the end XBOX costs about as much as the PlayStation when you get everything and still no blue ray.

[SebDavies]

i aint trying to argue but blu ray aint neccesary! ut i do agree that box shud make a few more things free!

[dd13reis]

Those are optional payments and I doubt $50 a year will stop anyone from buying an Xbox 360. I don't buy the logic.

-Don

[JonathonStriker]

$50 for more superior dedicated servers, the 360 Pro + $50 for 13 month is still less than the PS3, so I don't think sony can win with FREE. Wii is sure not winning the online support with connection problems as bad as the NDS.

[Lwestlie]

Now that Blu-ray won the format war. You need to realize that a PS3 is actually a really really good deal. The cheapest you can find a blu-ray player is still $200+. That plus the price of a 360 is more then a PS3

[rnaoncfixd]

I miss playing in a room with people. I miss people interaction. I can't handle it when somebody is playing and their mom is yelling in the back ground or someone's kid brother is crying. The trash talk is fun for a while and then it gets stale. I just want to play more than anything without being hassled by some random person. If you're a casual gamer it's very frustrating to play against people who spend godless amounts of hours playing that game or finding cheats in it to stomp everyone they come across - the hardcore gamer. So a casual gamer's gotta think: Do I want to pay for a service where I'm going to get my butt handed to me every time while a 13 year old is laughing at me calling me a gay newb?

In my mind casual gamers are the ones who haven't bought into either of the next gen systems yet. All the other gamers have already decided and nothing is going to change their mind because they already bought into it.

[James7777777]

The wii should probably not be compared to the xbox or PS3 as it has a different consumer base. While those who enjoy video games are buying the xbox or PS3, people who have never owned a video game system before is buying the Wii, that is it's success. It may not be the better system, but it appeals to more people as there are not many who wish to sit at home alone and play video games, most would rather go to a party and play wii.

[dd13reis]

You sound like Sony and Microsoft. The Wii is a competitor of both consoles. If it's competing for the same wallets on the same customers, it's a competitor.

-Don

[iturtle]

I think the Wii is taking on the NDS' success in opening up new market possibility, particularly the formerly untapped female gaming market.

[SebDavies]

I hope so! If Star Wars Battlefront 3 dont come out on PS2 then i'm getting the Xbox 360!

[Don Key]

Rucknrun, I think the point is that not everyone wants everything. With the 360 you pick and choose what you want according to your needs and budget. The PS3 forces everything on you if you want it or not for the price that they set. Oh, and don't forget that the PS3 doesn't not include HDMI or Component cables out of the box so there is an extra charge just to watch a Blu-ray movie on day one.

[buggermenot]

Oh NOES!!! I Have to buy a $9 HDMI cable off Amazon.com!!!??!?

[qcalebq]

HDMI cable is like $5 on Amazon, buy it before you get the console :-)

[eason_chan]

totally agree with rucknrun! XBOX have to pay to play online, that's one of the draw back for me!

[epross]

If Microsoft would swallow their pride and equip Xboxes with a blu-ray players then I think they would attract a lot bigger market. I am looking for a console but I also want to buy a blu-ray player for my home theater. Getting both in one package is way better than having to purchase each separately (which I can't afford). Not convinced that the games for Xbox or PS3 are better or worse than the other, they are about the same (but I don't own either so I'm going on second hand information) All the people I know that have Wii's say that its great for kids but adults will get bored once the initial fun is worn off.

[dd13reis]

I agree. I've said for a long time that the Xbox 360 should have a Blu-ray player. Let's hope they come around.

-Don

[Laserdisc]

Problem with MS going Blu-Ray with the X360 is cost. It would add in the very least $100 to the price of the console. Thus losing their edge over Wii and PS3 as far as price is concerned. We all know Microsoft needs all the help it can get to compete against the big N and S.

[CrashPad63]

@epross and all others wanting Blu-ray on the 360. Ask yourselves why would MS help out Sony? Really there is no compellinf reason to put blu-ray in. Remeber bluray may have won the HD dvd war, but it hasnt even won a battle for the DVD market. If you look at sales of BR the ncompare with PS3 sales there really isnt that much diffrence. And then look at the DVD sales period, well I think you get the picture there. Futhermore with the upconvwerts in DVD stable, and the HUGE library of DVD not available on BR well what compelling reason is there to go with BR?

[ferricoxide]

I gotta tell you: if you have a "home theatre", you really don't want your BluRay as a secondary function of a game console. When I still had my standard TV and was watching standard DVDs, I still preferred to watch my movies through my DVD player, not my XBox (or my PS2). Yeah, you can buy the gimpy add-on remotes, but they still suck. The only reason I ever used my game consoles for watching movies was when my dedicated-function DVD player got fried.

I can see using a game console for movie watching if you've got some kind of half-assed setup, but not a full home theatre. But if that's your setup, you really aren't worried about what a real BluRay and HD setup can give you, any way.

[danielgrant612]

I'm not too sure how true this is, but I heard that the xbox 360 might be getting a blue ray player in January or February.

[compudoc318]

i gotta agree about the ps3, way better system than the xbox, ive only played my xbox like once since i got the ps3. yeah, its pricey, but i love the bluray player. Ive even had friends in their 40's buy one just for the blu ray. Wii is just not for me, its neat, but i like the hardcore gaming on xbox,pc,ps3. I do like the price drop on the xbox tho, wish i never got mine, got it when they were still like 400 bucks.....at least no red ring of death on it yet, and probably wont since the ps3 gets all the love now.

[Prince2k3]

I really don't see how PS3 is in bad shape when every time I walk through the mall PS3 is in peoples conversations. I even hear friends and co workers talking about "As soon I a get a HDTV I'm getting a blu ray player but my wife doesnt know its going to be PS3" I hear that line all the time. so to say forgotten is a lie and to say it not doing well is also a lie. XBOX 360 had a head start and really it not doing well in the way the Wii and PS3 are doing. Wii has already passed XBOX sales. its only a matter of time before the PS3 does it too. Plus the whole drop your price thing shows sign of weakness in the brand and that your losing ground.

[dd13reis]

That's not a sign of weakness. It's a move that every company uses (Apple too) to increase value and sell more units. It's not desperation at all.

-Don

[swhite237]

"The XBOX makes you pay for everything where the playstation does not there is a lot more included with the Playstation. I the end XBOX costs about as much as the PlayStation when you get everything and still no blue ray. " The X Box Live experience is fully worth the extra money payed for it. Also, I can get a low end 360 AND a stand alone Blu Ray player for the same price as the PS3.

[Prince2k3]

XBOX Live is not that great in my opinion and I've played on it ...seems the exact same on playstation network but free. can you tell me what the experience difference is I'd like to know. Even though online is not really my thing I really don't see how that is a good arguement. What about people who don't care about online but would like to have that options to go online if I so please like the PC. And I know you probably going to say you can talk to people and all that but so far when I have done that its been a lot of people who curse and some little kids playing. I don't call that an experience really. Plus I bought the system right! Why do I have to pay for service when I bought the system and the game and the internet (that I pay every month for). I don't know about you but that stuff adds up especially to parents cause people don't go online everyday.

[experiencemusic]

The idea you focused on at the top of the article is silly. Every smart business knows that if you cut the price sales will increase - duh! What they have been waiting for is that tipping point that you completely ignored where the price cut can be made up in volume - which can never happen at the hardware level when you are selling at a loss.

Plus, why don't people think that Nintendo can drop their price in time for the holidays? Microsoft's price drop is not a sustainable advantage if Nintendo drops to $150 - allow it is a big deal that XBOX is <= $200 - that will help regardless of Nintendo's price.

[gerrrg]

But since the Wii was profitable on day one, and because their costs have been driven down faster because of the tremendous volume, Nintendo is in a far better position to tweak the 360 by dropping the price to $179 or more. Nintendo is probably taking a wait-and-see approach, and if the 360's sales surge over the next two months, I would expect that they would announce a price drop to make it the price leader.

[Brian Grover]

I don't think price dropping the Wii would have any effect on it's sales. Around here (in northern Indiana), it is still very hard to find a Wii. I don't know how it is anywhere else, but since it is still difficult to order one online that is not bundled, then I would guess that supply is still a problem. So why would Nintendo even think about lowering their prices when they can't keep up with demand at their current price? Why sacrafice the profit when they can't even make it up on volume.

[The1egend]

I am too far on the outside of not owning a console to know what a person who is looking to buy their first current-gen console would be looking at, but I would assume that it would be similar to what I looked at when I got mine 2 years ago. Price, games available that are of the type I enjoy, and expected lifespan of the system. The 360 has the advantage in price and games. I'm not saying the PS3 and Wii don't have an excellent lineup. I'm simply stating that the 360 has more. Where the 360 lacks may be in longevity. The Wii's fun factor is more timeless and the PS3 seems to be a bit more powerful and has the Bluray drive.

So in essence I agree with the article, it's just I wonder if the market will.

[danc4498]

I actually read this entire article, went to your article listing and saw "Why the Sega Dreamcast won the last console war" and literally laughed out loud!

[dd13reis]

Did you actually read it? It wasn't meant to be serious, it was meant to highlight the fact that the Dreamcast was my own personal favorite of that generation.

-Don

[DrtyDogg]

I still play my dreamcast from time to time. Love me some soul caliber.

[Whisk33]

I agree. I thought everything in this article was way off. Then I read how the Dreamcast "won" the last console war. I haven't heard anything even close to this ridiculous for a while. I see Don just has a very interesting view on things. The Wii appeals to a total different demographic. The Xbox and PS3 are eating at the same table, and the PS3 can reach more places due to its Blu-ray availability. Xbox online is expensive($70/year?). PS3online is free? The games seem pretty dead even for the most part. I've never bought sony before but I'm looking hard in that direction now. In two years the console war will be over, not turning the tides. The winner will be decided long before that and I'd be surprised to see Xbox on top. Unless it of course is a victory compared to that of the Dreamcast... you know where you win, but go out of business cause only a sparing few bought your crappy product. Ha, I might have to read that again. Dreamcast winning!

[nic.disassembly]

Excluding the Wii, as it is a left of center, pretty much "social only" system, the PS3 is actually more bang for buck than Xbox 360 (as Rucknrun already mentioned). Free online play, wi-fi out the box (no extra router or adapter needed)....sixaxis control comparable to the Wii...Blue tooth so i can use my old cellphone headset...streaming and copying music/photos/video from my computer to my HD tv, all @ 80gb for $399 (Xbox Premium will cost you the same after wi-fi adaptor and Xbox Gold subscribe, and still only 60 gb...not to mention Blu Ray)...

sure I can't play my PS2 games nowadays on these newer PS3s...but i can't play them on the 360 either ....point for "loss of value" is mute...esp considering 20gb PS3s went for $500 at system launch...

I kinda of see the Xbox 360 as the Sega Genesis of today's generation vs the PS3 being the SNES. PS3, like SNES, was late to the table, and due to lack of games, had the cards stacked against it...but after several years (nay months) and a few killer "you can only do it on the one system" games (cough back then it was Street Fighter II cough), it was obvious Sega wouldn't be able to keep up due to hardware limitations...same hurdles the Xbox will have to endure...

The 8th gen war will be interesting though, as games will obviously become "even bigger", it isn't too far off to think next gen systems will simply see us downloading games, forgoing disc format altogether...will we even see new machines for the next 10 years, since both the 360 and PS3 have a formidable downloading option from their repsective networks? Will we simply get full fledged computers introduced by Sony, MS, and/or even Nintendo next gen? especially considering how game systems have slowly morphed into mini computers nowadays anyways, complete with HDD...

[krushyou]

Tired of the same ole repeated ad-nauseum

The majority of people buying a VIDEO GAME system could care less if it has blu-ray

If people only buy it for blu-ray it will hurt Sony which is why I believe MS continues to get more and more games that were Sony only the previous generation. When you market a game console as a blu-ray player, you are basically telling your developers "games, what games?"

Blu-ray in order to enjoy the benefits requires a costly upgrade

Wireless is actually slower then a wired connection and the online experience vs X360 is dismal at best

It may be free but you get what you pay for and its not much compared to the x360 experience

Sega Genesis still sold very well 29 million is nothing to scoff at and the hardware for the genesis was more advanced then SNES FYI

One more thing there is room in the market to have all three, competition is a good thing and only benefits the customer.

[Scott ISH]

Why does there have to be a "winner"? This whole "war" is fictitious, serving only for hack columnists like you to gin up 850-word screeds of drivel.

[dd13reis]

The war is actually very real. It's the platform for advertising in the next generation and it's the key to all succeeding hardware sales for the companies. It's all too real.

-Don

[withyouieat]

"Sure, it has a Blu-ray player, which adds some value, but what else does it really offer that would justify someone paying $100 more for it than an Xbox 360?"

Seriously...? Do you even know anything about the PS3? Now based on your 100 more comment, I'm assuming we are comparing the 80 gig PS3 to the now 299 60 gig 360. So right off the bat the 20 gigs is something extra. The amount of content available for download merits any more hard drive space you can get.

Second, how about the 100 dollar network adapter you have to fork out to play on a wireless internet connection. Not everybody puts their modem/router by their TV. (I doubt hardly anybody does). So right there is a hundred bucks well spent.

Don't brush off Blu-Ray support as something that 'adds some value'. The PS3 is the cheapest Blu-Ray player on the market right now, and can be infinitely upgraded with firmware updates. Blu-Ray is the only high definition disc format available so not including it as a value is just ridiculous.

I know a lot of people throw the Live card out there saying that its 50 bucks a year to play. Well it is a valid point. I could buy a used game with that money as soon as I bought the system. The differences between Live and PSN are debatable as useful. Crossgame invites? Just type a message to your friend. Crossgame voice chat? Why would I want to talk to someone playing Burnout when I'm playing Call of Duty. I'm concentrating... PSN is not as far off from Live as people make it out to be.

As for games, that is obviously a matter of opinion and not welcome in a debate on which console is better. First party games are typically the ones that matter and it has been discussed that first party support for Sony is much better than Microsoft's. Personally, I am much more excited about the PS3 exclusives than any for the 360.

Bottom line is the PS3 is still a better value for the money you dish out. If you don't care about getting a value, it comes down to games, and like I said, first party support for the PS3 outweighs any support the 360 has right now.



Bottom line is the PS3 is still a better value for the money you dish out.

[dd13reis]

I keep hearing value. But do you think that the average, mainstream user who doesn't have inside knowledge into the tech industry will really look at "value?" I don't. I see them choosing based on price, first and foremost.

-Don

[Laserdisc]

You also forgot to mention you can throw an $80 500GB hard drive into your PS3. Can't do that with a Xbox360 without some minor hardware surgery.

[withyouieat]

"But do you think that the average, mainstream user who doesn't have inside knowledge into the tech industry will really look at 'value?'"

Inside knowledge into the tech industry....Really? Its common knowledge that the 360 can't play HD movies. Its common knowledge that you have to buy an accessory to take advantage of wireless internet. Its common knowledge that you have to pay 50 bucks to play online for a year. I don't see any of this as "inside knowledge" Sure the occasional clueless mom will see $199 and jump at it, but anybody who knows what THEY want in a console can see how the price adds up. And choosing a system based on price is just plain dumb. The Wii was the worst 250 bucks I've spent, in my opinion. Like I said its, about games, and the first party support from Sony is phenomenal. They have taken the right step in securing a promising future for themselves. Blatant rip-offs and payoffs for third party games is just pathetic.

[Mystakill]

We own all three & I'll agree that the Wii was a waste of money. Once the initial novelty wore off, aside from the top-rated first-party games, none of us touches it much these days. We've got a much more extensive library for our PS3 and 360, and both get fairly equal playtime. The 360 library's obviously larger, since it's been out longer, but our PS3 library is no slouch either.

Regardless though, thanks to the RRoD (I'm on 360 #5 since launch thanks to the M$ "dead pool" warranty), several months without a console, several more months of my family being locked out of DRMed content, extremely overpriced/vendor-locked accessories, and ****-poor support, I'll be holding off on Microsoft's next console for at least the first year.

I also killed my Live subscription after having been on it since the first Live beta on the Xbox 1. I no longer find value in something that's free everywhere else. Microsoft's requirement for an individual Gold membership for *every* family member so that they could play Uno, backgammon or some other casual game was the last straw. Microsoft's own MS Games features free multiplayer casual gaming, which I've pointed out to Microsoft multiple times.

It's tough to be a Microsoft fan with them stepping all over themselves (Vista & 360) these days. And for what it's worth, Don Mattrick is an arrogant tool. Microsoft dropped the ball when Peter Moore left/was forced out after the $1.5B repair bill came due for the RRoD.

[juuken2]

You be full of ****.
That's all I have to say about that.
I will like to see Microsoft gain some kind of foothold in the gaming industry but to win the console war?
What, are you on crack?

[dd13reis]

First off, learn how to form a sentence. Secondly, only respond here with something worthwhile, not outlandish posts.

-Don