For those of you who own a DS Lite and didn’t think the DSi was worth upgrading to I present you with the DSi’s first Killer App: Flipnote Studio.

Flipnote Studio allows you to make flip book animations on your DSi, using the stylus, microphone and even the camera (indirectly, you have to take the photos in the photo app and import them into Flipnote Studio).

Here’s the second animation I created (the first was more a test made during the tutorial and as such wasn’t really publishable)>

It’s pretty simple really just a boat running over a big wave, it took me about 20 minutes to get the whole thing done.

The next one is slightly more ambitious, take a look and see.

I did this during my lunch break at work, and added some finishing touches when I got home, I forgot to add dust coming up from the tyres as the car rolls along, but that’s simple enough to go back and add. This animation is 40 frames long and probably represents about 1hours worth of work.

The ability to upload is available directly from the DSi, and even if you’re not artistic you can download and view animations directly on the DSi, you can even edit and modify and re-upload your own version to the site (it even remembers the original creator, so you can’t pass it off as all your own work).

Even if you can’t connect from the DSi you can use the software to create animated GIFs of your animations (without sound) and save them to SD card where you can post them anywhere with your PC.

So if you ever needed a reason to get a DSi and like the idea of creating your own animations then Flipnote Studio is the coolest little application I’ve used in a long time.

Well, while I may work in the games industry, it’s as a lowly programmer at an independant developer, so I’m not privy to all the information (and even if I was alot of what I’m going to be speculating about would be confidential), but here’s how I see it.

Sony has two choices, as described above, they can either keep the price the same and ride it out hoping that things don’t get any worse, or they can cut the price and hope that the increased sales will help turn things around.

1. Keep the price the same.

Okay, this seems like a really bad idea, they’re losing marketshare in the largest market in the world (America), not just to the Wii (Microsoft is as well) but to the XBox 360, so we’ll play a what if game here, what if Sony continues to lose marketshare.

Firstly they wont lose a lot of third party support, from a developer stand point a PS3 port is a fairly cheap option, certainly cheaper than doing a Wii version of the same game, profit from PS3 games is similar to Xbox 360 on a per unit basis (i.e. they make a similar amount per PS3 unit sold as an Xbox unit sold), so the PS3 will retain a lot of games, they wont get exclusives, but they’ll still get a lot of third party games on the system.

Secondly, the PS3 isn’t totally irrelevant, it has lots of nice features and some really nice first party exclusives, just like the Gamecube last generation, people will still buy a PS3 for the big games they want to play, it’s just they are unlikely to pick one up on speculation or the strength of future titles.

2. Drop the price and hope for increased sales.

This sounds like just the sort of thing Sony needs to do, a cheaper console would be more competative with the Xbox and would help stop their market share from falling, however Sony doesn’t have much wiggle room on price, they aren’t making a profit in America on the console and to really have any effect they would have to drop at least $50 off the price, so lets look at what they can do.

2.1. Suck up the loses

In better financial times this is exactly what Sony would do, they would take the financial hit and drop the price, but given that they’re hurting financially and are having to lay off 16,000 employees, and are raising the price of their other consumer electronics, they simply cannot afford to do this.

2.2. Try to claw back the money on the software sales

Okay, we know that Sony makes money on games sold on the PS3, surely they can make enough money off of the games to cover the loses on the console? Normally you would be right, but right now the attach rate on the PS3 is between 3 and 4, this means that for every PS3 sold, they sell 3-4 games, so we’ll take 4 as an example and a $50 price cut, the licensing fee for a game is probably about ~$10 a unit, so that means that they make ~$40 extra per PS3 from software sales, okay, so this means that they can cover $40 of the cost of the cut, but Sony is probably already figuring that into the price of the PS3 since it’s a loss leader, so they would need to increase this cost, so lets look at what happens if they do that.

2.2.1. Increase cost of licensing, increase price of games.

A $5 increase in license costs would probably equate to a $10 increase in the price of games, so now PS3 games would cost $70 while Xbox 360 games would still cost $60, instantly this leads to a problem where PS3 games would cost more for the same game, given the choice consumers would buy the xbox version over the PS3 and people looking at the console would see a $350 console with more expensive games and buy the Xbox.

2.2.2. Increase cost of license, publishers make less profits.

Okay, now we maintain the price of the games the same, $60 on each platform, except the publishers make less off of each PS3 games sold. As I said before the publishers view the PS3 as a cheap port, but I said cheap, not FREE, given the current sales ratio of Xbox to PS3 of about 3:1, this means that the Xbox makes 75% of the profits on sales, if the PS3 version doesn’t cost much to make then it’s worth doing, however if the cost benefit is reduced publishers will simply decide to drop the PS3 version, and this is the last thing Sony needs, all the time it’s getting the same big games they can sustain, once publishers start dropping the PS3 version the snowball effect will begin and before long the PS3 will lose most of it’s cross platform games as well as exclusives.

There is another problem with increasing the licensing fee, one that cannot be overlooked and would cause an even more catastrophic effect than either of the two above, can you guess what it is? That’s right, Microsoft would probably reduce their licensing fees to coincide with Sony’s increase, we know that Microsoft got into the console industry because Sony was a threat to their business (Microsoft wants to be the box attached to your TV for media playback and Sony were stepping into that exact field). Microsoft have incredibly deep pockets and have already shown this generation just how far they’re willing to go to stop Sony. If Microsoft reduced their license fee, while sony increases theirs then the profitablilty of doing a PS3 port is effectively removed and PS3 ports would be cancelled almost immediately, Sony would go from having good support to virtually none overnight, which would effectively kill the PS3.

3. What else can sony do?

Sony needs to get imaginative with their cost cutting to get the price down, firstly Microsoft has had great success with the Arcade (’tard pack) SKU, it’s cheaper than the Wii and is part of the reason for the great resurgence in the Xbox this year, Sony needs to cut everything it can out of the PS3 to reduce the cost, so here’s a few ideas.

3.1. PS3 Lite

Firstly take the PSU out of the case and make it external, this will reduce the size and heat of the machine. Next remove the Wireless (leave ethernet in), we’re talking the cheap, ‘tard, pack here. Next simplify the case, remove anything that adds manufacturing cost that doesn’t affect the machine (like rotating PS logos). Replace the slot load Blue-ray drive with a cheaper tray or top-load drive (like the PS2slim uses). Switch from expensive 2.5″ drives to cheaper 3.5″ drives (okay so that’s a size increase, but not much and it’s cost we need to reduce). Finally remove the blu-ray player from the OS, and instead offer it as a download on the Playstation Store, the license fee for blu-ray playback has to be adding to the cost of the machine.

There you have it the PS3 ‘tard pack, the cut down, not as sexy looking, but functional as a games playing PS3, that could retail for $299-$350 without removing the core of the system (games,networking,downloads and installs), they could even go as far as removing the HDMI socket from the lite since there’s like licensing costs involved with that (HDCP support springs to mind)

Okay, I think I’ve covered as much as I can here, for now Sony is just going to have to stick with the price they’ve got, and they really need to concider a redesign, make all the consoles look alike and making a cheaper version with some of the more expensive options cut out.

Okay you’re asking what the hell are publishers doing wrong? Well where do I start? Lets break this down, and I’ll start with this one since it’s that time of year again.

Christmas Rush

There really is no need for publishers to release all their major games at Christmas time, this year has seen a massive selection of AAA titles release in a 2 month period, more games than most of us could either afford to buy or find the time to play. Of course not everyone is going to be interested in all the games released, this is natural, but I myself have bought 6 games in the last couple of months, most of which I hardly find the time to play since one game has taken refuge in my 360 DVD Drive (Rock Band 2 to be precise).

But you’re asking what’s the alternative? Simple, stagger the releases throughout the year, take a look at GTA4 it was released in April and has sold 7-8million copies, it didn’t harm the sales of that game, MGS4 launched in June/July and sold well. The simple fact is that these games are being bought by the people who are playing them, not as presents, it therefore doesn’t make sense to try and get them in the shops for Christmas. (I’m willing to bet that >95% of all copies of the major releases these holidays were bough by the person who will be playing the game, not as a present), besides retailers will love them because they know that they can promote a single game and not be left with large remainers of games that they expect to sell that didn’t.

Development Budgets

Another major problem is that development budgets have spiralled out of control, unlike movies where anyone can sit down and watch (and presumably enjoy) a movie, games require rather more commitment, far more than most people are able (or willing) to give, as such the market for a game is smaller than that for a similarly themed movie. Movies also have the advantage of having two markets, the primary being the cinema (theatre for our American chums), the secondary being DVD/Rental. Games have just one market, retail, should they not sell well here there really isn’t anything the publisher can do to make more revenue off of the game.

Okay, so now we know about the differences between movies and games why are development budgets a problem? Well in simple terms it costs anything between $10-20 million dollars to develop a AAA game these days, then you need to add a similar amount in marketing to make sure people know its out there, this leads to the position where a game is costing the publisher between $20-40 million to release, if you concider that a HD game retails for $60 (before taxes) then by the time you take out all the costs, licenses and cuts from retailers and distributers the publisher only sees about $20-25 of that per copy sold, this means that a top HD game has been budgeted on the assumption that it will need to sell 1-1.5 million copies just to break even, this is frankly untenable for most game releases and especial those released around Christmas time.

Now add to this the fact that major games retailers are actively encouraging players to buy used copies and to trade in their old(?) games and we hit another problem, a modern HD game release has a shelf life of a couple of weeks before the market starts flooding with used copies, if it hasn’t sold at least 90% of it’s break-even sales in this time then it will have a very hard time even getting to break-even, let alone making profit for the publisher.

Sequelitis

Okay, so we know that people are reluctant to try new things and that games are costing more and more to develop, and that the market isn’t as large as that for movies, so what’s a publisher to do? Not take risks, new IP is a risk, there’s a risk that no matter how good the game people wont buy it because they don’t know what it is, this leads to a rash of sequels to previous games that did sell well, since it’s assumed most (if not all) of the people who bought the original will buy the sequel, sounds like a sound business strategy. Okay so tell me how many people bought Guitar Hero World Tour, the 4th Guitar Hero game released in a 12 month period by Activision (Guitar Hero III,Guitar Hero: On Tour and Guitar Hero: Aerosmith), well in october all 4 release platforms managed to sell <500K in total in america, less than the total sales of Rock Band 2 on just the XBox 360 upto that point.

This highights the problem, too many sequels and people start to question if they really need another one. Activision’s CEO has been quoted as saying that when they merged with Blizzard that the projects they dropped were dropped because they couldn’t be exploited for sequels, not because they didn’t believe they wouldn’t sell, because a Ghostbusters game sure as hell will sell, but because they couldn’t turn them into yearly franchises that could be run into the ground (like Tony Hawk and to a lesser extent Guitar Hero)

Focus on HD gaming

You’ve all heard the adage, it wont go away if you ignore it, well it seems that all the western publishers believe that if they ignore the Wii it will just go away, unfortunately this isn’t going to happen, it’s probably the fastest selling console in history (citation needed) and yet the support it gets from the major publishers is laughable, just one example. Need For Speed Underground (a title that EA thinks is underperforming) was released on the following platforms: XBox 360, PS3, PS2, PC, DS, PSP. Do you notice a platform missing there, yes, the Wii didn’t get a release of NFSU, one question springs to mind, WHY NOT? The Wii is the largest selling platform of this generation, there are more Wii owners than there are XBox 360 and PS3 combined (yes that’s true) what sort of idiot wouldn’t put there release on the biggest platform? EA, that’s who, infact everything that EA has done with the Wii so far has been laughable, the All-Play series, way to turn the hardcore player who own a Wii off playing your game, the covers look stupid and unprofessional, wether or not you can play these games normally on the Wii doesn’t matter because no one will find out because they’ll take one look at it and think, this is a kiddie game I’m not buying that, I’ll get the PS2 version instead. It’s almost as if EA who used to be a pivotal developer to have on side (Sony paid EA large sums of money for exclusive sports titles on the PS1) still believe that they hold sway over the outcome of the console wars, and that by sabotaging their own Wii titles they’ll magically make the HD consoles win.

It’s true that Nintendo doesn’t need other publishers to survive, Nintendo makes a profit on every Wii (and DS) sold and it’s own Wii Titles (except Wii Music) sell extremely well, however it’s probably even more true that Publishers need Nintendo. HD gaming isn’t taking off as expected, in the US the PS3 is languishing behind the XBox 360 which was overtaken by the Wii earlier this year (after a years head start), in Japan the PS3 is doing worse than the Gamecube last generation, and the Xbox 360 is so insignificant as to be laughable. With the current financial climate the future for HD gaming doesn’t look bright, it’s not that the Xbox 360 is too expensive (it’s cheaper than the Wii now), rather it’s that HD TVs are too expensive and lets face it who is going to replace a perfectly servicable TV at a time like this, this means that all the HD gorgeousness is going to be completely lost of the average family since their TV wont be able to take advantage of it, even worse is that some games are unplayable on SD TVs due to bad UI design that is unreadable on an SD TV (Dead Rising and Lost Planet spring to mind).

So we have a situation where people are buying the Wii in great numbers and yet the publishers are shovelling shit onto it, thinking somehow that casual=thick, and that they’ll buy any crap, simple fact of the matter is that casuals don’t buy much, and guess what about 80% of all PS2 owners are casuals, do you think the woman who buys Singstar for her PS2 is going to play God Of War? Of course not, she’ll likely buy another Singstar disk with songs she likes, and sony has made good money exploiting this fact.However a lot of hardcore gamers bought a Wii when it came out, RE4: Wii has sold over 1million copies, which for a port of a last gen game to it’s 4th platform (Gamecube,PS2,PC) is incredible, RE:Umbrella Chronicals has sold almost the same amount, Mario Galaxy has sold millions of copies, and mario is hardly a casual game, Red Steel, a launch title sold over 1million as well. There is a hardcore market on the Wii, or there was, but the western publishers ignored that and decided that every Wii owner was into mini-game collections and dumbed down sports games (Wii Sports is not dumbed down, it’s just accessable, there’s a major difference, bowling in Wii Sports is probably as difficult as in real life and requires similar co-ordination to do).

The Future for Publishers

The simple fact is that almost the entire hardcore market has bought their HD consoles already, the biggest selling HD games now are likely to be the biggest selling HD games this generation, there’ll be very few new Hardcore XBox 360 and PS3 owners over the next few years, this mean that that market is at saturational already and anyone budgeting for new HD games needs to realise this, most HD games will be lucky to sell 500K world-wide, very few will make it to 1million and even fewer will be multi-million sellers, this is the simple fact of the matter. Publishers can ease this by spreading their releases out throughout the year, allowing titles that would get lost in the Christmas rush some space to find an audience, but the simple fact is that the audience isn’t going to grow much more.

Okay, so what about the Wii, well for a start when Nintendo said they were concerned about the direction development budgets were going and the tenability of the gaming industry, which is why the Wii isn’t much of a step up from last generation, this is exactly the situation they envisioned, the aim with the Wii wasn’t to reduce development budgets, but to keep them at sustainable levels, of course the Western publishers took this to mean that they could produce Wii games cheaper than last generation and promptly went ahead and did just that. I hate to think what the average Wii Development budget is in the west, but I’d hazzard a guess that it’s less than $1million (that’s average, not mean), this is ludicrus, you can’t develop a decent game for a handheld with a budget like that, let alone a current generation game, when I worked on Super Monkey Ball Jr for the GBA the dev budget was about $.5million, and that was an expensive GBA game. Publishers really need to realise that a consoles library requires a variety of games and that not every owner is the same, Guitar Hero III sold the most copies on the Wii, strange that isn’t it, the biggest install base sold the most copies, that’s because apart from DLC, the Wii version was the same as the other versions, same music, and controller and gameplay. I heard a comment on a recent podcast about The Conduit, an FPS for the Wii that basically said that they shouldn’t be doing it on the Wii, this is something well be coming to in part 2, the current state of Games Journalism(?). This is silly, the Wii is the market leader it needs games in all genres, it can support games in all genres, just like the other platforms can, the Wii market may have a higher ratio of casuals to hardcore for this point in it’s life, but that doesn’t mean that it doesn’t have a hardcore audience, and those people need games to play, or they will sell theirs (some already have).

A Prediction

Sometime this generation a fairly major publisher is going to take a major fall and just vanish off the face of the Earth, I know which one my money is on, but I wont say here, I will say that I haven’t mentioned it in my post though, but it’s a name with a long history in the industry, the name may be resurrected, but like Acclaim before (remember them) it will be a shadow (of the shadow) of it’s former self.

Summary

• The hardcore market already owns their HD console and that market isn’t going to grow.
• The current development budgets for games is untenable.
• Wii market being ignored by major publishers for no good reason.
• Christmas is not a good time to release all your games.
• A major publisher will fall.

My prediction of the winner is: Nintendo Wii

When I say winner I mean winner, we’re talking Sony PS2, Nintendo DS levels of success, not as some analysts predict a fairly even split with the Wii just in front, we’re talking donination (Nintendomination even), and how do I reach this conclusion, I’ll reveal that after the break.

Okay, so you want to know how I can possibly think the Wii is going to smash the opposition this time, simple mass appeal, Wii Sports is probably the biggest phenomenon in years, and like nintendo’s DS games Nintendogs and Brain Training it appeals to people who wouldn’t normally play games. To illustrate I’ll relate what happened to me today.

My housemates mum’s friend (How’s that for removed) who was visiting with my housemates mum started talking to me about the Wii and Wii Sports, I didn’t mention that I owned a Wii or Wii Sports, she actually recognised the console (even with the Wavebird adaptor plugged in and both top panels open) and asked me about it, and seemed genuinely interest in how it worked and played, she probably never even noticed the large guitar shaped controller sitting right next to it for Guitar Hero 2, the Wii has entered the conciousness of ordinary people, and is generating genuine interest and perhaps even enthusiasm.

Okay after that little side story back to the reasons:

1. Cultural phenomenon – Wii Sports is probably going to go on to be the biggest selling single game ever, not as a series, but as a single game, in Japan where it’s not a pack-in it’s the biggest selling Wii game and sells to approximately 60% of all Wii purchasers every week, there hasn’t been a week since launch when Wii Sports hasn’t been in the top 10 sales in Japan. Even if Wii Sports was a stand alone in the US/Europe it would probably be selling at a similar rate. Even if we take just the Japanese figures into account, if the Wii does similar numbers to the PS2 in Japan (a real possibility) about 20 million, and Wii Sports continues in the same vein then we’re looking at 12Million in Japan alone, if Wii Sports remains a pack-in for the entire life of the Wii (unlikely) and the Wii sells similar to the PS2 worldwide (100Million) that would put Wii Sports at 92Million, however it’s likely that with the release of Super Mario Galaxy or Wii Fitness the Wii will be available with those instead of Wii Sports and they’ll probably remove the pack-in when they have their first price-drop, even with that if we take the 60% attach rate it has in Japan and extrapolate that it still equates to 60Million, I don’t think any game has ever come even close to those sort of sales. This helps the Wii since it’s only playable on the Wii, just like Nintendogs is only on the DS, you’ll buy the console for the game.
2. Current sales trends – We all know that previous performance is no guarentee of future performance, however given that the Wii is still supply constrained 6 months after launch even with Nintendo producing about 1million a month (and having 1 million for launch) the current sales are at about 7 million and it’s still not readily available, with Super Mario Galaxy, Metroid Prime 3 and Super Smash Brothers Brawl still to come this year the demand doesn’t look like it’s about to fall off any time soon, and while the Xbox 360 is likely to see supply problems this Christmas (Halo3 and GTA4) the same is highly unlikely with the PS3 (hell it was readily available in the UK the day after launch), the Wii is going to be nigh on impossible to find this Christmas.
3. Price – people are price sensitive and buy based not on low price, but on value for money, the Wii is perceived as value for money, the Xbox 360 and PS3 are not, part of that is based on some false assumptions (like requiring a HDTV to play, neither system does, they just benefit from a HD display) and the PS3s real problem is that Blu-Ray is an albatross, if you don’t own a HDTV then a HD movie player is a worthless investment, you’re paying a premium for something that you can’t use (why pay more for a movie on Blu-Ray when you get no benefit if you can’t enjoy the extra resolution), Microsoft’s external HD-DVD player gives you the option of having HD movie playback without forcing it on you, if won’t help HD-DVD win the format war (that looks a lost cause, but neither format is doing well, it’s too early for HD movie formats, DVD worked on normal TVs, HD movies don’t and HDTV penetration is too low to support a new video format especially so soon after the move to DVD)
4. Support – Publishers notice trends, they have to, they’re in business to make money, yes it’s nice to have critical acclaim, but without the sales the greatest game in the world wont keep a company afloat, given the current trends in sales most of the 3rd party publisher support will be going to the Wii, for the publisher this is a win/win situation, they get a large user base to sell to and they keep development costs down at the same levels they were at last generation, of course this means that the Wii will get lots of shovelware, but the PS2 has far more shovelware than good titles and of course the occasional gem falls through this process and surprises everyone.
5. Casual Gamers – Okay to clarify this, in this definition the casuals are people who are buying the PS2 currently, those that don’t have massive disposable income and can’t afford even the current price of the Wii, if someone is buying a PS2 today it’s either to replace an old one, or they just weren’t able to afford on before. I hear this argument that most of the 100Million PS2 owners will eventually move to the PS3, that’s a falicy, most of the 100Million PS2 owners didn’t buy it because it’s the successor to the PS1, they brought it because the games they wanted to play were available for it, as noted above the console with the highest user base gets the most games and the more games you have the more likely that console is to have the games you want to play, casuals aren’t about brand they’re about games. Sony is under the misapprehension that games like Singstar will sell on the PS3, the target market for singstar is not the sort of person who is willing to drop $600 (or £425) for a console but the sort who will drop $129 (£99) for a console, these people will stick with their PS2 for as long as possible and only move when they see that they are going to get the experience they want from the new consoles and can afford them. Given the current trends and what we’re already seeing publishers doing by the time those people are ready to make a switch the PS3 will be pretty much dead and the Xbox 360 will be a niche (mainly catering to the FPS crowd) and games like Buzz and Singstar will be available on the Wii (infact I’d say the Wii is the natural home of such games)

Okay if anyone still doubts the above reasoning they need to take a look at the history of the console market, particularly in the past two generations (the Sony generations), the single biggest reason for the success of the PS1 and PS2 was the games, for the PS1 Sony went out of their way to get developers onboard, the PS2 was out first and got sequels to the big games on the PS1, the problem with both those consoles for Sony was that the big games for them were all 3rd party (GTA, Final Fantasy, Metal Gear Solid, Devil May Cry), and since the PS1 and PS2 were selling well those 3rd parties stuck around and kept those games exclusive, with the PS3 two of those big 4 are already non-exclusive (GTA4 and DMC4), if things continue the way they are we may see FFXIII ported to the X360 simply to get back the massive costs of development (it would sell massively on the X360 in the US and do alright on the PS3 in Japan but no where near it’s predecessors success levels), MGS4 is still exclusive, but it’s probably not quite in the same league as GTA and FF. The other problem is that all these big games (except GTA4) aren’t due until at least April next year, by then the PS3 will be in serious trouble.

I’ve heard people claim that Home will help the PS3, well it probably will, but I look at it this way, Home is downloadable content, average Joe probably wont know much about it, or how cool it looks (it does look cool) because it will never appear on the shelves, downloadable content does not sell consoles, it sells well on consoles (look at XBLA and Nintendo’s Virtual Console) but both of these require you to have the console to find out what’s available and unless you do the research you’ll never know it’s there, when someone goes to buy a console they’re at the Point of Sale and what’s on the shelf is the biggest deciding factor, if they can’t see it in the shop they probably don’t know it exists, they might know the service exists, but the exact contents are hidden from view, and the likelyhood of a store having paid for any of that content and having it on a demo machine is virtually non-existant, so you can’t evaluate it like you can other games. The VC is slightly different, since nintendo has told us exactly what it represents, it’s an emulator (or bundled emulators, each game comes with an optimised emulator for the specific game) for old game systems where you get pixel perfect reproductions of old nintendo, sega and turbografix games, here you know what you’re getting, both XBLA and PSN have the problem that they’re mainly original content and what’s going to become available isn’t a known quantity, with VC you know exactly the sort of things you’ll be getting before you buy the console, and if it’s not there it’s likely to appear at some point.

Obvious I can’t give you exact figures, but I can give you an idea of what I expect of each consoles in relation to previous consoles (approximate previous numbers in brackets after the console)
Wii >= PS2 (100Million)
Xbox 360 > Xbox (24Million)
PS3 < Gamecube (20Million)
The 360 is a bit of an unknown, I know it'll do better than the old Xbox, that's pretty much a given, but how much better is up in the air, it could do over 40 million world-wide, but with it's failure in Japan it's not going to be able to get anywhere near the Wii.

I expect the Wii to end up doing far better in Japan than anything else with the exception of the DS, but the DS is a monster, it's closing in on the PS2s LTD after just 2 1/2 years, by the end of the year the DS will have crushed the PS2 in sales and be going after the long lived Gameboy itself (original + Color combined), it's already outsold the GBA in Japan and even in a bad week is selling over 100K, with about 30 weeks of this year left that represents 3 million minimum and it's at 17Million and the PS2 is at 20Million, with the holiday season it should smash that easily, the Gameboy is about 30Million, which should be easy to beat by christmas 2008, I dont see it slowing down, it's still supply constrained in Japan after 2 1/2 years and given the lifespan of nintendo's handhelds it's probably got another 2-3 years life left minimum.

So Japan is going to go with the Wii in a big way, but that's not enough for domination, how does the rest of the world compare, well we'll take the biggest market the USA next since we have figures for them as well. Last month the Wii outsold the X360 by 2:1 and the PS3 by 4:1 (360K, 174K, 82K respectively) and this is a continuing trend, the X360 is fairly stable, the Wii is selling everything Nintendo ship and the PS3 is continually falling (to give you an idea of how bad it's doing in the US the GBA outsold the PS3 by 2k), when Nintendo's new Wii factory comes online expect that 360K to move to about 450-500K a month (about 1.5Million a month worldwide), so we can probably extrapolate those figures, the Wii has sold 2.5Million in the US since launch (6months), the Xbox360 5.3Million (18months) and PS3 1.3Million. By Christmas the Wii will have caught up with the Xbox360 (unless Microsoft drop the price with the launch of Halo3, but I get the feeling most of the early Halo3 buyers already have an X360 given the figures on Halo3 beta participation), in 1 year it will have sold the same as the Xbox360 did in two years. The PS3 will be lucky to reach the current Wii sales by the end of the year, more likely to be around 2million.

Europe is harder to get figures but we can extrapolate the Wii figures fairly easily, here's how it works. Nintendo make about 1million Wii a month (at present), US gets about ~330K, Japan gets ~330K, so Europe get about 330K as well, since the Wii is supply constrained in all three regions that means that the Wii is selling about 330K a month in Europe, it's been out 6 months plus the initial 330K units nintendo had for launch = 7*330K = ~2.3Million. 360 and PS3 are harder to get, PS3s haven't sold out their initial 1Million units from launch, 360 has been around for 18months but is only really popular in the UK, current guestimates put the Xbox360 at about the same as the Wii currently in Europe, maybe slightly ahead.

Worldwide is interesting, the Xbox360 is at about 9Million at the moment, the Wii 7Million, and the PS3 ~3Million. By the end of the Year if production stays the same the Wii will be at 12million, then Xbox360 is likely to be at about the same, possibly a bit higher, and the PS3 probably about 4Million (there doesn't seem to be anything that can help the PS3 sell coming out this year, GTA4 wont help since the X360 is cheaper and getting GTA4 as well). If Nintendo get upto 1.5million units in two months then the Wii could be at 14.5Million by Christmas, which would mean even the X360 would be behind it, next year is when the real contest starts, by Christmas 2008 the Wii is likely to be at ~30Million (12 this year, 18 next year), the 360 at 15-16Million and the PS3 will be starting to feel the effects of being in last and probably only at ~6Million.

Just 1 year ago this was unthinkable, Sony's powerhouse Playstation brand languishing in 3rd place, losing it's exclusives and 3rd party support (who wants to make a >$20Million game for a system that wont give enough sales to cover the cost), and to quote Sony’s own advertising for the PS2, “Welcome to the 3rd place.”

Why it might win

• Playstation
• Great Games
• HD Graphics

Why it might lose

• Price
• Sony
• Blu-ray

Click for the analysis

Why it might win

1. Playstation

Playstation is a global brand, it’s recognisable everywhere, mention PlayStation to most people and they know what you’re talking about, the PS2 sold over 100 million units worldwide in the last generation, and given the recognition there’s no reason why a new PlayStation shouldn’t do the same.

2. Great Games

Sony managed to secure some amazing exclusives in the last two generations, stealing the Final Fantasy Series from Nintendo on the PS1 helped the PS1 win against the Saturn and Nintendo (it wasn’t the only reason). Metal Gear Solid, Devil May Cry, Final Fantasy, all these game series were PlayStation exclusives and gave people reasons to buy the PS1 & 2, and all of these are confirmed as PS3 exclusives, if you want to play MGS4, DMC4 or FFXIII you will need to have a PS3, and a lot of people do want to play these games.

3. HD Graphics

Like the Xbox 360, the PS3 has High Definition graphics, infact the GPU on the PS3 is more powerful than the one in the 360, however it doesn’t have the scaling chip the Xbox 360 has, so games have to be targeted at specific resolutions, but the Blue-ray disks can hold 50Gbytes of data, so having multiple assets isn’t a serious problem for storage.

Why it might fail

1. Price

Lets face it, the PS3 is expensive, while it might actually represent good value from a hardware standpoint (there’s a lot of stuff in a PS3) however from a consumer standpoint the price is too high, Sony have stuffed the PS3 with so many features that it’s believed that Sony are losing about $200 per console sold, however at £425 or $600 the PS3 is perceived as expensive for a games machine.

2. Sony

You’ll probably have noticed a trend here, the company producing the console is a factor in all three platforms, however it’s only a positive for the Wii, but why you may ask is Sony a liability for the PS3? Aren’t Sony a byword for quality? Well they were a byword for quality, however in recent years Sony’s image has taken a tumble, what with rootkits on CDs, exploding batteries, SoE’s treatment of SWG players, and the decreased build quality of Sony products in general (my second Sony MD player has died, but my original MD player works perfectly, but doesn’t support LP2 or 4 and is a pain to record onto, and my Sony DVD burner in my PC is dying after 1 year). It also hasn’t helped that every time a Sony PR person has opened their mouth about the PS3 they’ve ended up putting their foot in it ($1200 for any PS3 sitting on shelves, PAL PS3 Backwards compatability, SIXAXIS rumble).

3. Blu-ray

Both the Xbox 360 and Wii have DVD-ROM drives, the Xbox 360 can play back DVDs and has a seperate optional HD-DVD drive, but the PS3 has a Blu-ray drive and can play Blu-ray movies, however given the current low penetration of HDTV how many people actually need to play HD movies? If you’ve not got a HDTV then you aren’t in the market for a Blu-ray player, even if the PS3 is (or was since Sony now do a $600 BD player) the cheapest Blu-ray player on the market. This adds to the perception that the PS3 is HD only, even though it works perfectly well on SDTVs. I know Sony are saying that the PS3 is to have a 10 year lifespan, however for the next 4-5 years HDTVs are going to be in the minority and cheaper Blu-ray/HD-DVD players will be available long before most people actually need one. Sony have added a massive cost to the PS3 which for most users just isn’t worth the investment, and if a console doesnt do well in the first few years, then 3rd party support goes, and without 3rd party support a console dies, and any 10 year plan along with it.

Why it might win

• HD Graphics
• 1 year head-start
• Xbox Live

Why it might lose

• Microsoft
• Reliability
• Japan

Continue reading for the lowdown.

Why it might Win

1. HD Graphics

HD Graphics are the next big thing, as PC owners know games look better in higher resolution. Now that TVs are capable of displaying much higher resolutions, and the Xbox 360 takes advantage of those TVs where you have one to display much nicer and crisper graphics, playing a game on my SD TV, then on my 20.1″ monitor the difference is astounding, and with more and more people replacing old TVs with new HDTVs the number of people who can take advantage of it are increasing and old SD entertainment wont cut it on a new HDTV. Of course the xbox also features a hardware scaler chip which means that developers dont have to target lower resolutions explicitly for those that haven’t made the HD jump yet.

2. 1 Year head-start

Don’t knock it, it worked (in part) for Sony last generation, the PS2 had a serious jump on the Xbox and Gamecube, which helped it build up a library of games before it’s competitors launched, and the same has happened with the Xbox 360, at the launch of the PS3 and Wii the Xbox 360 had two new games launch which showed the power of the 360 and the year spent with no competition helped the 360 build a library of good games (and not so good, but that’s the way the cookie crumbles) while the PS3 and Wii had to fight with only 1 killer game each on launch (Resistance and Zelda)

3. Xbox Live

Microsoft’s online service is completely integrated into the whole console, unlike the Xbox, where it was an addon, this time microsoft realised that online was a major feature and human opponents are far better than any computer AI can possibly be. Add to that the whole Marketplace, Live Arcade, Voice chat, Demos, Achievements, Unified Friends lists and even the Video Marketplace in the US and you have a service that no other console can compete with yet (if ever)

Why it might fail

1. Microsoft

Like it or not, Microsoft is the biggest problem with the Xbox 360, if you work in an office it’s likely that Windows is part of your daily life, and no matter how careful you are, you’ll have ended up seeing the Blue Screen of Death, or having to reboot your machine, or even worse having to reinstall Windows to fix some problem, Windows is frustrating, even XP which most people are using isn’t completely bug free. In Microsoft’s defence there are so many different configurations of PC, drivers, settings, plus the need for running legacy applications which severly limit the stability of Windows, even Vista still has to support lots of legacy applications. Sorry for the defence of Microsoft there, but you see if you use Windows a lot then you’re likely to curse Microsoft fairly regularly, this anti-Microsoft sentiment follows people home and so the fact the the 360 is made by Microsoft gives people the impression it’ll work as well as Windows does.

2. Reliability

Now while the software side of the Xbox is stable, the hardware isn’t as good, the Xbox 360 hardware has been plagued with problems since launch, the two most common are the freezes (the entire console freezes and has to be powered down/back up again) and the red ring of death (three red lights on the ring of light). The freezes are annoying (I know my machine occasionally gets them) the ring of death is fatal, there’s no recourse but to contacts Microsoft’s support line and have the console repaired/replaced. And if it’s replaced you then have the hassle that each downloaded XBLA game and marketplace item is linked to both your Xbox and Live account, if you want to play it from then on you have to be connected to Live (with the correct account) for it to work.

3. Japan

Japan is a massive market for gamers, second only to the US, and both the xbox and xbox 360 have failed miserably in Japan, the xbox 360 has so far sold just over 300,000 consoles in Japan in just over a year, the PS3 has already sold 670,000 and the Wii over 1.6 million in the past 3 months, admittedly the 360 is doing better than the xbox and is likely to outsell the original in japan, but that’s not saying much, and while it’s possible to be overall leader without taking Japan, it’s a lot easier if you’ve got Japan as well (just ask Nintendo and Sony about it)

Note: Out of the three consoles presented here I only own 1 of them, the Xbox 360, one isn’t out in my country yet (PS3) and I haven’t got the cash or even found a Wii. I do however own all 4 of last generations (I’m counting the Dreamcast in the last Gen, though it was too early to really be concidered) and envision owning all 3 of this generations consoles.

We start with the Nintendo Wii.

Why it might Win

• Nintendo
• Price
• Waggle

Why it might lose

• Novelty
• No HD
• 3rd Party

Read the rest for more explanation.
Why the Wii Might Win

1. Nintendo

Nintendo produce some of the best games in the World, their franchises are known and loved by millions, Mario, Smash Bros, Metroid, Pokemon, etc. For all that Nintendo has failed in the previous two generations, Nintendo consoles are the only place to play these games and people will buy the console for those alone. Also the DS has been a major success, trouncing the technologically superior PSP, in Japan it’s just passed the GBA in sales (the GBA is still available and on sale) and is likely to outsell the PS2 before the end of the year, it may even surpass the mighty Gameboy itself.

2. Price

Say what you like about the Wii being a souped up Gamecube, the fact is the Wii is conciderably more powerful than the GC and has lots of extras like WiFi, Flash memory, not to mention the camera in the Wii Remote. The end result is a console that is cheaper than the other two and which actually makes a profit for Nintendo on each unit sold. At £179 or $250 it represents good value, and while it’s not quite impulse buy level, it can make a good case with waivering purchasers and with good 1st party releases (and Wii Sports in the box) there are plenty of reasons to buy it.

3. Waggle

Motion sensitive controllers, you can tell how much it scared Sony, they added it to their controller after Nintendo announced theirs. What’s more astounding is that not only is the remote motion sensitive, so is the nunchuck attachment, the two can be used in unison (can’t do that with the SIXAXIS), also the idea of having attachments means that cheaper controllers (like the classic controller) can be made for specific games without the expense of having all the wireless electronics in the attachment. One of the stumbling blocks to getting people playing games is the complexity of current controllers, 2 sticks, a D-pad, a dozen buttons, they’re pretty intimidating if you don’t know the conventions used, the Wii Remote looks like a TV remote and most people understand how to use one of those.

Why it might lose

1. Novelty

There’s no denying it, Motion control is a novelty, it’s something we haven’t seen before, and therefore it’s novel, however is it a gimmick? That’s the million dollar question, so far the Wii has been selling well on it’s new controller, however how long will that last, can the Wii remote and it’s decendents really become a new standard for game input?

2. No HD

Right now HDTV penetration is low in all regions the Wii is selling in, so there’s no real reason for people buying a HD console, however as more and more people replace their TVs with new HDTVs they’re going to want to make the most out of those, the question is, how fast is HDTV going to catch on and will the Wii’s SD graphics start to show their age 2-3 years down the road?

3. 3rd Party

3rd Party software doesn’t sell on Nintendo systems, or that’s the perception, during the NES/SNES days this wasn’t true, many companies made their names supporting the early nintendo systems, however when Nintendo released the N64 they made some bad decisions, the “Dream Team” and limiting 3rd party support meant that the only really good games coming out were made by Nintendo and Rare. The Gamecube continued this with poor sales of both systems, and nintendo/rare’s own killer games, no one else wanted to risk creating games on nintendo platforms, and less games means less console sales, which means less 3rd party sales, and so the vicious circle continues. Nintendo is starting to show that 3rd party games can sell on the DS, but can they really turn it around?

You can download the library which contains instructions on how to use it, plus a small demo application here.