November 17, 2006 8:51 AM PST

Week in review: Gamers' perfect storm

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For hard-core aficionados of console video games, this week is pure heaven--and hell.

In the space of a few days, Sony and Nintendo are releasing their next-generation consoles to join the early bird Microsoft Xbox 360 in a three-way horse race for gamers' loyalties, attention and greenbacks.

Sony got the ball rolling last weekend with the Japanese launch of its PlayStation 3 in Tokyo. The North American launch in New York and San Francisco followed a few days later, with events leading up to its release midnight Thursday. Hundreds lined up in cities across the U.S. to be among the first to own the new machine, which features a Blu-ray high-definition DVD player. Some buyers had been waiting in line in inclement weather for more than three days.

Of course, not everyone in line to buy the PlayStation 3 was a gamer. Many of those waiting said they had no plans to play the console. Although its retail price is $500 for a 20GB hard drive and $600 for a 60GB version, those in line said they believed a single PS3 console could bring in $1,000 to $3,000 if auctioned on eBay, Craigslist or to family and friends.

Demand for the console has been so strong that GameStop, which began accepting "limited" preorders last month, won't be able to fill all its existing orders. The gaming specialty chain had asked customers to put down $100 in advance for the game console, with a modest expectation of eight units per store in most cases.

Now it appears that the largest gaming specialty chain in North America won't be receiving even that many consoles. A GameStop representative said the company has received launch allocation numbers from Sony that won't satisfy its preorders.

PlayStation's following is so strong that industry experts expect Sony will once again be the leader among the 150 million or so consoles analysts predict will be sold in the next six to eight years. However, there's a big caveat in the prediction of Sony's continued console dominance: The top-end PS3 will cost $599, while the premium Xbox 360 runs $399. Nintendo's Wii will cost $250. So Sony will have to overcome a major pricing disadvantage.

Meanwhile, consumers may be getting a lot more than they bargained for with the PS3, according to analyst firm iSuppli. The cost of manufacturing and materials for the low-end, 20GB version of the console comes to $805.85. That means that for every PS3 Sony sells for $499, it will lose $306.85 on components alone. Marketing and advertising costs would then boost the actual cost to Sony even higher.

For its part, Nintendo will jump into the fray at 12:01 a.m. EST Sunday, when the Wii goes on sale. Even though it's the last to the party, Wii will be the least expensive and feature a novel motion-sensitive controller. Wii will enable users with a high-speed Internet connection to surf the Web, share photos, check the weather and browse news headlines.

Microsoft's musical Zune up
Though Microsoft's answer to Apple Computer's iPod juggernaut officially went on sale nationwide this week, the Zune wasn't exactly flying off the shelves in downtown San Francisco. At two retail outlets, the new media player wasn't even on the shelves.

zune

The Virgin Megastore near Union Square had them in stock, but the Zune display wasn't the right fit for the store's shelving. The players would be on sale "sometime this week" when new signage was scheduled to be delivered, said a store representative who declined to give his name.

Zunes were also absent from the digital audio player display at the nearby CompUSA. "We were supposed to get them, but somehow they got delayed," an employee said. But there has been interest, he said. Radio Shack was another miss, but a delay or shipping problem was not to blame--the store is not scheduled to sell them yet.

Microsoft doesn't expect the Zune to knock the iPod off the stage, but it is counting on the new music player to at least get the company on the playbill. Microsoft's $250 music player is the first music player to come directly from the software maker, but it's the latest in Redmond's years-long effort to counter Apple's dominance.

"The whole goal behind launch was to build a foundation," said Scott Erickson, a senior director of product management for Microsoft's Zune effort.

A major player in Microsoft's music arrangement is its music store--the Zune Marketplace, which exchanges music for "points." Instead of just paying 99 cents for a song, the typical price for a song at iTunes, Microsoft requires users to pay for blocks of points, the minimum being $5. A dollar is worth roughly 80 points. To make matters more confusing, music prices will vary on Marketplace.

While CNET News.com readers debated the pros and cons of the Zune, the majority seemed unimpressed by the device.

"This thing looks like a device that could have been released 5 years ago. But it falls far short on the sexy scale and they need to realize that plays a big part in this market," wrote one reader to the News.com TalkBack forum.

Going mobile
For two hours, New York's always-noisy Times Square became one of the easiest spots in the world to find a friend. Boost Mobile, a so-called mobile virtual-network operator owned by Sprint Nextel, offered a two-hour demonstration of buddy-tracking technology created by a start-up called Loopt. The start-up is the latest to offer a mobile-tracking system that enables people to do things like get a bead on friends' whereabouts.

It certainly won't be the last. For nearly a decade, technology visionaries have talked of a day when people would be able to use their cell phones to get directions, track their friends, keep tabs on their kids or simply find the nearest coffee shop. Now those services are finally starting to trickle into the marketplace.

As more people subscribe to cell phone services, marketers see the mobile market as a ripe opportunity. According to research firm Informa, marketers will spend more than $11 billion on mobile advertising by 2011. Some of the marketing is being done through legitimate channels.

But if mobile operators want to exploit this marketing opportunity, they must tread lightly so as not to annoy customers with messages they don't want, experts say. And a recent rise in text message spam could jeopardize these efforts.

And on the subject of text messages, did you ever wonder what teens are saying with those three-letter acronyms like PAW, MOS and CD9? You may find the answer to be more disturbing than the old four-letter words.

For parents who likely aren't as comfortable with IM slang: PAW means "parents are watching"; MOS is "mom over shoulder"; and CD9 means "Code 9" for when parents are around. Research shows that one in four kids uses such lingo daily to warn their chat friends of prying eyes.

Despite the secrecy, Internet-savvy parents have more and more tools to decipher the code, causing a kind of chat-and-mouse game. Befuddled by lingo seen through monitoring software or over their kids' shoulder--like "wu" for what's up or "plox" for please--parents are turning to sites like NoSlang.com, Teenangels.org and Teenchatdecoder.com for their acronym dictionaries--much to teens' chagrin.

Also of note
Microsoft has until November 23 to provide European antitrust regulators with the technical documentation third parties require to make their products interoperate with Microsoft software...Mark Cuban, one of YouTube's most outspoken critics, has expressed interest in buying a news organization that has filed a lawsuit against the video-sharing company...Search engine rivals Google, Yahoo and Microsoft are teaming up to make it easier for Web site owners to make sure their sites get included in the Web indexes.

See more CNET content tagged:
console, Nintendo Wii, Week in review, Nintendo Co. Ltd., Microsoft Zune

2 comments

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Zune
I find it quite funny how they even bother to mention CNET News.com readers' opinions about the Zune and say "the majority seemed unimpressed by the device"; what were they expecting about a product from Microsoft (regardless of its quality)? Unbiased positive reviews/comments? Where are they living?
And the best if the reader who says "This thing looks like a device that could have been released 5 years ago". Yeah, maybe it could, but it would be quite advanced for its time. Being technically less advanced than the Zune, I wonder how he would define the iPod. A device that could have been released 10 years ago? Plus, in terms of design, Zune is almost an iPod with a bigger screen and a black fake scroll-wheel, so I don't understand what else does he want in a player with that size and with a screen that big for it to be sexy. One thing is to say he thinks the iPod is still better (which I agree), other thing is to criticise just because it has logo saying Microsoft in the back, instead of an apple.

P.S.: I have a 4 GB silver iPod Nano.
Posted by Ryo Hazuki (378 comments )
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It Might as Well Be a Birdbath with Headphones
Ryo,

No one can actually find anyone who doesn't belong in a rehabilitation hospital (or works for Microsoft) that likes the Zune.

Zune is not a music player. It is a DRM machine with headphones and a host of completely useless features that could only have been dreamed up by a company that is completely out of touch with consumers' interests.

Why should we be shocked? MSFT has never had to deal with a consumer in a normal marketplace. It cuts market-manipulating deals with the PC manufacturers, eliminates choice by that collusion and is freed from ever having to consider the customer's needs. PCs ship. MSFT gets paid. Everyone knows Windows is an engineering travesty, a joke compared to almost every other operating system ever developed except maybe the OS that ran the TRS-80.

Face it: the only reason for anyone to buy a Zune is because Steve Ballmer has snatched your kid while you were looking the other way at the department store - and is holding him hostage in his station wagon until you show him the cashier's receipt.

Roberto
Posted by Sumatra-Bosch (526 comments )
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