Why the Xbox 360 will win the console war

Lately, there has been a considerable amount of discussion on which console will win this generation's war. Will it be the Wii with its established base and strong sales? Will it be the Xbox 360 with its steady growth? Or will it be the Playstation 3 with its strong sales over the past few months?

The Xbox 360 will take the day

(Credit: CNET News.com)

If you ask me, it'll be the Xbox 360.

Now I know what you're thinking -- "how?" The answer is actually quite simple: the Wii is not nearly as strong as some want to believe and Sony's strong growth is the result of a lower hardware price, which is allowing it to catch up to the pack.

Of course, Sony's Kaz Hirai doesn't agree with that sentiment. According to the company's gaming chief, Sony will follow a "ten-year cycle" with the PS3 that should propel it to the top spot in the industry once it's all said and done.

And while his desire to do that isn't quite rooted in reality, I guess you can't blame a guy for trying.

According to Hirai, Sony is prepared to battle it out in a "marathon" race against Nintendo and Microsoft and he believes his platform has what it takes to win the day.

"I am very confident that after the 10-year life-cycle we will have the installed base that we are looking for and that is obviously to be in the leadership position," he said in an interview.

Sadly, Hirai totally missed it on this one.

According to the latest sales figures, Sony has sold roughly 13 million Playstation 3 units worldwide, while Nintendo has sold 25 million Wiis and Microsoft has sold 19 million Xbox 360s. And while Sony won't cite those figures, it chooses instead to mention "velocity" -- the rate at which its sales are increasing.

There's no debating the fact that Sony sales are stronger and although the Wii still reigns supreme, it's viability is running low and the chances of it maintaining such a lead in the industry is quite slim. All the while, the Xbox 360 is the forgotten player in this market that's still enjoying hearty sales without any major price drop -- a contributing factor to Sony's gain -- in sight.

With that in mind, you're probably wondering why I think the Xbox 360 will take the day when it's all said and done. Suffice it to say that as it stands, Microsoft has the best strategy in place to appeal to the biggest group of gamers and create a greater value proposition for its customers.

Here's why:

Games, games, games

I don't know how many times I've said it on these hallowed pages, but I need to say it again -- games mean everything to hardware sales once the first year in the new console generation is over. By then, everyone who wanted the new hardware has it and everyone else who doesn't want to spend money on something that doesn't entice them, waits for something big.

In previous generations, this is where Sony performed extremely well. With exclusives from Square-Enix and even Rockstar Games, the company was able to enjoy huge upswings in hardware sales prior to and after, the release of major titles like Final Fantasy and Grand Theft Auto. On the other hand, Microsoft and Nintendo were forced to play catch-up with first-party titles and other semi-major hits.

But today, that game has changed. Nintendo is still clinging to the value of its first-party titles and Sony has lost a slew of exclusives, including GTA IV. And although the company still has Killzone 2, Microsoft had Halo 3. Although Sony has Metal Gear Solid 4, Gran Turismo 5, and Little Big Planet, the Xbox 360 lineup of games overall is much stronger.

Of course, you don't need to take my word for it. Kaz Hirai, in a severe understatement, admitted his company has a problem: "There was also some concern in the media and from customers about the lack of titles available at launch."

The way I see it, those problems are still present.

But let's not forget that Nintendo is not innocent in all this. If it weren't for first-party titles, I'm not convinced that the Wii would be nearly as popular as it is today. And now that almost every major Nintendo title is already available, how much longer should we expect the company to enjoy such strong sales?

The online component

There's no debating the fact that in the video game industry, Microsoft reigns supreme in the online space. Over the past few years, Microsoft has single-handedly create an online experience that not only manhandles Nintendo and Sony's attempt at online entertainment, but has millions wanting more. Beyond that, it's an important selling point when customers need to decide between the PS3 or Xbox 360 versions of a title. Let's face it -- wouldn't you rather play GTA IV on Xbox Live?

Sony's online experience is junky, at best. And although it continues to promise more in that arena, it still doesn't seem nearly as focused as it should be. According to Hirai, Blu-ray discs are still the "best and most efficient way to deliver content" and "when you consider that content that plays on PlayStation 3 can go as high as 50GB it's going to be very difficult to deliver 50GB to consumers in some parts of the world in a timely fashion."

In other words, Sony's online experience will continue to stink.

On the other hand, Nintendo is working diligently to look like a company that cares about online gaming, but most of the integration on that front has been mediocre. To make matters worse, the company's online roadmap is practically forgotten and it seems like it's more focused on "innovation in gaming" than anything else. That's a mistake.

Surely, Sony and Nintendo are downplaying the significance of online gaming, but how can they justify that mentality? According to "Online Gaming 2008" from NPD, 42 percent of Americans play games online and more than half of worldwide gamers play online. Among console gamers, more than 50 percent use the Xbox 360 to get their fix. But as NPD notes, "there is still a large, untapped market for gaming in general and online gaming in particular."

Are Nintendo and Sony really willing to forego that opportunity and surrender to Microsoft? It certainly looks that way.

Although it's currently sitting in the second spot, Microsoft's Xbox 360 will come out the winner of this generation as long as it maintains its strong relationship with developers and continues its dominance in the online space. If nothing else, Sony has shown that it will continue to cling to its outdated business model hoping for a redux of the 1990s, while Nintendo will try to stay true to its innovation plan.

That said, I just don't think either of those strategies can last much longer and both companies will be forced to adapt. When that happens, they will try to play Microsoft's game and fail miserably.

Regardless of what's going on right now, Microsoft is in the best position to win this generation's console war. Now we just need to sit back and wait for it to happen.

[Deerock71]

I'll actually extract a bit of pertinent text from the article itself that adequately sums up the article in its entirety:

"And while his desire to do that isn't quite rooted in reality, I guess you can't blame a guy for trying."

The Xbox 360 is indeed headed towards the cellar this generation. It will never amass anything resembling even moderately successful sales in Japan, its already in the process of being overtaken by the PS3 in Europe, and the Wii is poised to overtake the final territory it doesn't have control of (the United States) before the end of summer. I honestly don't know how any clear thinking individual can see any other outcome than Wii finishing first this generation, PS3 finishing second, and the 360 finally reaping the bad seeds it has sown at the beginning of this generation.

[kake2k]

All I have to say, is you clearly do not have a ps3.

[DJOmega6]

My friend, you act like America is the only country that matters, cuz that is the only territory the 360 has the lead, and BARELY over the Wii, with the PS3 slowly but surely making up ground. In Europe, PS3 just overtook 360 in overall sales, and the 360 doesn't even matter in Japan. Let's also not forget that with all the 360s that have gotten the red ring of death, overall 360 sales are somewhat exaggerated. This is the little fact that is conviently forgotten about when everyone talks about the 360 sales figures. Many people don't want to wait to send their bricked 360 off, and they go ahead and buy a new one. And before anyone goes off on me saying I do not know what I'm talking about, I work in retail and have seen this scenario way too much.
With all this said, I do envy 360 owners who get to play Bioshock.

[TrevorBG]

Working in retail doesn't make you an economic genius. Most people do not go out and drop another $350 on a 360 when they can just send it off and get it fixed for free.

[redbarncoffee]

Hey buddy, have you even tried the new PS3 online store? Its getting to be right on par with Microsoft, and its FREE. Perhaps you should have mentioned this new service, and compared the prices in your article. But you know, that would be offering all the facts.

[TrevorBG]

Have you played games with Sonys online service? Apparantly not or you would know it's horrible. Perhaps you should have mentioned that you still have to pay for things in Sonys online store. But you know, that would be offering all the facts.

[WesHoogenboom]

I disagree. You stated it in the games, Games, games section. PS3 has the most/best? developers on board, especially in Japan and will have the best games now and in the future. "..Microsoft had Halo 3." Yep, and the 360 will keep floating on Halo 4 and 5, while poor product management (MS, XBOX1, Zune) and poor engineering (MS, RROD) sink it. Also, the technically inferior CPU/GPU and lack of, Blu-Ray, Wifi, and proprietary HDD. Microsoft has too many things to worry about presently. Sony will continue to innovate past it with software and hardware revisions. The PS3 is solid for dev and built for gaming, the 360 was rushed like the original and feels like it could give at any moment, which is probably the worst thing a gaming console could do well, besides burst into flames I suppose. The "console wars" are not a bad thing for us consumers anyway. Competition breeds innovation which proceeds to empty my checking account.

[TrevorBG]

Look at the specs again. The 360 has a superior GPU and CPU in every aspect. And if you knew anything about developing games you would know that 6 floating point processors are a programmers nightmare. 3 cores are better than one.

[RROD360]

let me tell everyone that third party game developers are going to start making games based off the ps3 platform and downgrade and yes "DOWNGRADE" to xbox360 because it is easier then upgrading to the ps3 from the 360. The ps3's cpu is better and no 3 cores doesnt always mean better, the ps3 cell processor is 3 times as powerful because it has 8 cores not 6 my friend all running at the same speed. Its like a dual core having 2 cores on one dye but the ps3 has 8, and to mention the ps3's 2 terra flopps compared to 360's one terra flop. For as the GPU Nvidia which ps3 went with is far better then ati right now and has been for about 5 years now. Plus all ps3 games are made on blu-ray discs and have a capacity of 50GB of info compared to only 5GB of info that the 360 can produce. I hate when people always see the bigger number as better, like 3 cores better then 1 no its not. The only numbers I look at when comparing the 2 are the 5GB of space compared to 50GB of space the games have plus the memory 3.2GHz for ps3 and only 700MHz on 360 see the 256MB beats out the 512MB of ram of the 360. Oh yeah the display ps3 1080p compared to 360 1080i.

[asyouburn]

the only reason (well, one of the only reasons) the ps3 will reign supreme in this console war, is that in ten years when the dust has settled, only ten year old ps3's will still work.

[koolcat71]

> And although the company still has Killzone 2, Microsoft had Halo 3. Although Sony has Metal Gear Solid 4, Gran Turismo 5, and Little Big Planet, the Xbox 360 lineup of games overall is much stronger.

You forget PS3 exclusives and console sellers like FF XIII, GOWIII, RFOM II. At least 2 of those will be huuuge. Not to forget other exclusives like White Knight Chronicles, Disgae 3, Infamous, Uncharted II, Haze, Motorstorm 2, Eight Days and a number of unannounced internal Sony titles.

MS still, still, still after 3 years has not fixed the RROD issue that plagues them everywhere they go.

In the end, MS will abandon the 360 in about 2 years and move on and fall into last place.

[TrevorBG]

FF XIII is not a sony exclusive. RFOM is just a Gears of War clone. Most of the games on your exclusives list got terrible reviews or are easily forgetable. While the 360 continues to produce stellar exclusive titles. The RROD issue has been resolved and for 360 owners with older models they have a 3 year warranty, the best in the business.

In the end, MS will emerge victorious and Sony will need to rethink they're stategy for the next generation of consoles.....that is if they make another console.

[Vassili_06]

"RFOM is just a Gears of War clone." Yes.. Its a HUGE clone, Resistance release date: Nov 14, 2006. Gears release Date: Nov 7, 2006. ****, THEY SO COPIED GEARS. Get your facts straight before you post. Secondly: "Most of the games on your exclusives list got terrible reviews or are easily forgetable." Ya...
Resistance IGN Score: 9.1
Motor Storm IGN Score: 8.9 (Note, both are launch titles)
Drakes Fortune IGN Score: 9.1
Warhawk IGN Score: 8.8
MGS4 IGN Score: 10
Grand Turismo 5p: 8.5

Yep, PS3 exclusives REALLY do get terrible reviews..

[rasta024]

I have all three systems(really)!!! The only time the Wii is played is when i have friends over at my place!A very nostalgic system of which I see no long term effect for those over the age of 12. Also Wii online is nonexistant which you must have to compete logtrem! The PS3 game lineup,lethargic at best, of which I have 12 games,the quality of which only Drakes Fortune can I compare to most 360 games! I own Madden 08 NHL 08 and GTA4 on both systems! 360 wins in framerate online play and graphics, by a landslide! As far as online play overall, I keep holding out for Sony to improve online play, but they have a long way to go to even come close to XBOX live! I gladly fork over my $50 every year for my XBOX live gold service! If sony could develope an online service like XBOX live I would gladly pay $50 for that as well! But their PS online service, as it stands right now is pretty much worthless even being free and even with the new update! These are comments from a diehard ps fan still crossing my fingers for sony to step up before the get too far behind! Those of you who want to bash the 360 JUST BECAUSE are doing yourselves a disservice! If you are true gamers, not investing in a 360, you guys are missing out on an awesome gaming experirnce!

[LcdGreg]

PS3's framerate will get bumped up to the Xbox equivalent in the next EA titles, says Peter Moore.

[rasta024]

I have all three systems(really)!!! The only time the Wii is played is when i have friends over at my place!A very nostalgic system of which I see no long term effect for those over the age of 12. Also Wii online is nonexistant which you must have to compete logtrem! The PS3 game lineup,lethargic at best, of which I have 12 games,the quality of which only Drakes Fortune can I compare to most 360 games! I own Madden 08 NHL 08 and GTA4 on both systems! 360 wins in framerate online play and graphics, by a landslide! As far as online play overall, I keep holding out for Sony to improve online play, but they have a long way to go to even come close to XBOX live! I gladly fork over my $50 every year for my XBOX live gold service! If sony could develope an online service like XBOX live I would gladly pay $50 for that as well! But their PS online service, as it stands right now is pretty much worthless even being free and even with the new update! These are comments from a diehard ps fan still crossing my fingers for sony to step up before the get too far behind! Those of you who want to bash the 360 JUST BECAUSE are doing yourselves a disservice! If you are true gamers, not investing in a 360, you guys are missing out on an awesome gaming experirnce!

[JimmyTheSpider3]

Test

[JimmyTheSpider3]

Dan always forgets there's a whole wide world outside the US and A. The 360 is doing pretty well in English speaking markets, but struggling everywhere else in the world. Already, in Europe as a whole, the PS3 has already a larger installed base despite launching 18 months later. Let's not even talk about Japan.

Worldwide, the PS3 is now outselling the 360 week by week, despite costing more by a significant amount in every major territory. Microsoft is practically giving 360s away in Europe (the arcade model is cheaper than the Wii in many countries), and it still can't beat near Sony, nevermind Nintendo.

And we've heard the story about the Wii dying countless times. I believed it at one stage, too, but it's clear that the Wii's momentum is near unstoppable. By the time the market decides it's tired of the Wii, it will probably be time for the next generation to roll around.

I dislike the Wii, but in this industry, success breeds success. The Wii will remain dominant in Japan and Europe, and will overtake the Xbox 360 in North America within months, if not weeks, despite Microsoft having the shelves to itself for a year.

The PS3 and Xbox 360 will end pretty close, but I think worldwide the PS3 will beat Xbox 360 unit shipments (though the 360 will hold North America). Microsoft will make good profits from consoles this generation, thanks to excellent attachment rates, but anyone who thinks it will win the hardware war, is living in a dream world.

To me, this column smacks of fanboyism rather than thoughtful and credible commentary.

[JimmyTheSpider3]

[glennbg]

Great article. I have a Xbox 360 and its been fine for 2yrs now. My friends have had some that they had to return because of RROD but they didn't return it for a PS3, they returned it for another xbox. In fact, if my Xbox 360 broke once a month, i would still get the xbox. You should continue repeatedly point out that the PS3 which is graphically 3 million times better (by better I mean you cant tell the difference) than the xbox, holds the greatest processor (by greatest I mean same games as xbox) that mankind ever created, free PSN and can help its players walk on water cant decisively win over a console with RROD and pay subscription internet. You summed it up nicely...games....I'm sure everyone playing halo 3 online and gear of war 1 and 2 will drop their controllers to play a racing game offline or a sneaking game where you have to press 75 buttons to shoot a gun (I still have brain damage from MGS2 which wasnt a game it was a 48 hr movie, good movie though but i never could get ANY of my friends to play it).....but I'm gonna hold my breath anyway. Heard Sony is gonna get an online video service....probably not HI-Def though because when Microsoft touted Hi Def movies PS3 fans said it would flop and be unachievable. And I know if a PS3 fan said it, it has to be true. Can you guys please explain to me why I would put down a video game (5-10+hr a week) to watch a Blu ray movie? Is there even 5-10hr of quality hollywood a week?

[glennbg]

Oh and I forgot one thing. If Sony Corp. was as confident as the Sony fans, here's an idea...stop making PS2 games. Force them to pick between PS3 and Xbox 360....that will solve this competition by years end....

[Zagahuset]

Only time will tell...

http://www.zagahuset.dk

[crillinFLIP337]

Wow how much did you get paid to write that trash? I always thought CNet hired quality journalists not sellouts. Where to start with this one? How about your sales figures, "Sony has sold roughly 13 million Playstation 3 units worldwide, while Nintendo has sold 25 million Wiis and Microsoft has sold 19 million Xbox 360s" How can you knock Sony for numbers like that? 360 launched a year ahead of Sony and the numbers are really close. Sales trends show PS3 is selling faster than 360 (in the months and years after launch) Next, "Sony's online experience is junky, at best" Have you played on PSN? I'm going with no. There are very few differences in the online experience between systems. Sure you have all your friends in one list across games but other than that the PSN is just as solid as XBL and (to my knowledge) has never crashed due to too many users online at once. And my last rant, "And although the company still has Killzone 2, Microsoft had Halo 3. Although Sony has Metal Gear Solid 4, Gran Turismo 5, and Little Big Planet, the Xbox 360 lineup of games overall is much stronger" UM.... WHAT!?!?!? You compare Killzone which isn't even out until '09 to one of the most overhyped/underwhelming games of '07??? Is that what you just did? As far as M$ line up, what do they have that will sell as well or better than MGS4? No exclusive will this year, maybe gears but that's a big maybe. And just what are these unamed games that are going to be better than MGS4, GT5, LBP? I didn't see anything supporting your claims. Maybe next time you try writting an article like this you do your research from all sides, provide actual support and not just partial quotes to support your delusions of grandure, and most importantly check your bias at the door.

[silentsnake619]

I myself have the 360 and the PS3 and at first I hardly ever played the PS3 due to lack of any games worth a ****. Now I play both equal amount of time, but if one game comes out multiplatform, I prefer PS3 because I like the controller a bit more. ( I prefer controls over extra content i.e. GTA 4) I just disagree with this Xbox fan boy. I think in the next 2-3 years, it will be between the Wii or PS3. Xbox had a full year ahead of the the Wii and PS3 and somehow fell behind the Wii in sales and pulled a minor lead of the PS3 and its sort of weak lineup of games in '07. Once the devlopers can actually learn the PS3 hardware to its potential, we will see games far beyond which the Xbox is capable of. Also with the Blu ray winning over HDDVD, thats a even bigger plus. I just hope Sony can equal a online community experience like the 360 with HOME. As far as games right now 360 conquers but in the future Sony will definitely reign. The exclusive I think of 360 has thats great is Halo. PS3 has MGS 4, Killzone 2, GOD OF WAR!!!, Resistance 2 , Final Fantasy, and Infamous. Yes I am PS longtime fan, but I am also a 360 fan. Just shoutin out my opinion.

[pabadamus]

Sony, Microsoft and Nintendo all have equal chance of being the victor. As a representative of gaming media you should celebrate and acknowledge innovation and improvement on all sides. Whenever you write you appear to use incomplete and skewed information that sheds absolutely no relevant light on this industry struggle. CNET should reclassify everything you write as a blog and nothing more. You are entitled to an opinion but please try to be a bit more balanced. Hold yourself to a higher standard beyond all the other ?fanboyish? crap that gets plastered on the net daily. Blind bias is shameful.

[lefil]

You need to stop thinking that America is the only country that matters when it comes to gaming. MS needs to build a strong base outside North America if they want to win the console war. There just aren't enough of American hardcore gamers to make the console a success on the level of the PS2.

[thetonestarr]

Sorry, Reisinger, but precedence disagrees with you. The Wii WILL win. Additionally, the PS3 is closing the gap on the 360, as is evidenced by the chart that you yourself referenced. You may want to reign in your fanboyism... it's making your ignorance show.