This week one of the big items in the news is the Yahoo Peanut Butter Manifesto: Yahoo's marketing boss takes the company to task for being spread too thin and not being focused enough. Strangely enough, when you compare the working strategies for game systems between Sony, Microsoft, and Nintendo, in the end it is focus, or the lack of it, that differentiates the efforts.
I've been pounding on the Sony and Xbox 360 all week and had a chance to look at the Wii (but only in store) in its final form. We are seeing three very different consoles in the video gaming market right now that appeal to three very different user groups. If you are wondering which one may be best for you, here's some food for thought.
Xbox 360
From the standpoint of industrial design, capability, and features it had no peer when it launched last year as the first of the next generation consoles. Since launch, it has accumulated over 100 game titles and a reasonably growing accessory secondary market. This stresses the core part of Microsoft's strategy which was first to market.
One problem the company had was manufacturing start late in the year in 2005. That caused a lot of folks, who might have bought Xbox 360, in the end did not, and probably did not buy them in the months that followed either. Still, this gave Microsoft a massive head start and they should end 2006 with the largest installed base of next generation gamers and clearly the largest related catalogue of games.
Core, and relatively unique when it was initially launched, to the Xbox strategy was Xbox Live. This included an on-line service that brokers games between individuals which added significantly to the user experience. In a few days, this service will include downloadable content including the first legally downloadable commercial HD content.
There was also a unique emphasis on voice which may have been a mistake - according to the experts on my gaming panel earlier this month. A lot of guys like to play women characters (it is interesting to note that, evidently, the opposite is almost never true) and voice somewhat messes up the effect. From personal experience, seeing a cute girl game character and then hearing a clearly masculine voice, is a bit disconcerting.
On hardware, they had a good industrial design that was, at least, partially modular and partially customizable with replaceable face plates. This modular nature worked for them since Microsoft was able to add an HD-DVD drive ($200 including remote) to the product. While somewhat inelegant (the Xbox and HD-DVD Drive don't stack well and the ID is inconsistent), current Xbox 360 users now have a $200 HD solution that is less than half the price of a comparable HD-DVD player. Microsoft charges royalties for Xbox 360 accessories and some of their partners (Logitech, in particular) complained that they were locked out of parts of the market.
Xbox Accessories, however, are very rich in design and construction quality and often premium priced. The new racing wheel is especially stunning.
Finally, Microsoft connected the dots both on the software side, making it easy for developers to develop titles for both PCs and Xbox platforms, and on the hardware side with connections into PCs (particarly Media Center PCs) and wired accessories that would work with both PCs and the Xbox.
So, to net it all out, Microsoft's strategy was to move early, wrap the product with an online experience (including media), gain synergy with other Microsoft platforms, and move aggressively with connected accessories. Problems were the amount of product available the first Christmas, third parties accessories vendors, who aren't getting the support they have asked for, no HDMI support, and voice possibly being more of a problem then a benefit. Arguably the most complex strategy but, after the launch problems, Microsoft executed reasonably well.
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