Lessons the console manufacturers don’t seem to learn

Now that this generation of video game consoles winding down and with the dawn of a new one starting next year with the launch of the Wii U, I’d like to talk about some possible lessons that this generation should have hopefully driven home for Sony, Nintendo, and Microsoft while they’re designing their respective new systems. Many of these lessons may seem blatantly obvious with hindsight and yet they are all lessons that have been ignored time and time again by video game console manufacturers over the years.

1. You don’t necessarily have to have the most advanced system to dominate or even just to do well.

The history of video game consoles is actually rife with examples of this lesson going all the way back to the days of the Atari 2600, Colecovision and Intellivision. Coleco and Matel’s consoles were clearly more powerful than the venerable 2600 but they didn’t stand a chance against the well established Atari juggernaut. In the late 80s, the Sega Master System was a bit more powerful than the NES, but it didn’t matter. In the late 90s the Sega Saturn was actually a bit more powerful hardware-wise (in many ways) than the original Playstation. And the N64 was considerable more advanced than the PS1. But of course PS1 still outsold the both of them handily. In the early 2000s the original XBox was clearly more powerful than the PS2. As for this generation? Do I really need to go into it?

2. Price matters.

And how. History has shown time and time again that price may be one of the most important factors in the success or failure of a video game system. After this generation, this should be painfully obvious. Take the original Playstation for example. It launched at a competitive $299 (undercutting the Saturn) and within a year dropped to $199. Throughout it’s lifespan they kept the price competitive, undercutting or matching Nintendo and Sega. Same thing with the PS2. How Sony completely ignored this lesson this past generation still mystifies me.

3. Being first isn’t a huge advantage.

History has shown that being the first system of a new generation can help, but it doesn’t guarantee anything. The NES established itself in the US for almost a full year before the arrival of the Sega Master System and dominated. But a few years later Nintendo waited a little too long to release the Super NES in America and lost market share to the Genesis that launched 2 years earlier. But then again in ‘95 Sega jumped the gun on the Saturn with a surprise May launch hoping to catch Sony unawares... it didn’t work out for them. Sega tried to jump the gun again a few years later with the Dreamcast, and we all know how that turned out. This generation the 360 launched first (really out of necessity) and while things have turned out pretty well for them the Wii launched later and still sold like gangbusters.

4. Ignore market segments at your peril.

This is a toughie and it isn’t as obvious as the others, but if you look back in time you can see instances where one company was able to gobble up marketshare from a leader by picking up slack in an underserved market segment. Back in the days of the SNES and Genesis, Nintendo marketed itself (as it still does to this day) as the Family Friendly video game company. But Sega instead focused on marketing to teenagers and young adults with sports games and fighting games. Even Sonic was a bit “edgier” than Mario and while Nintendo still did very well they didn’t completely dominate like they did in the days of the NES. Conversely in the current generation we all know how the Wii did a much better job of marketing to the family friendly casual crowd compared to Sony and MS. Of course now that the Wii is really showing it’s age as a non-HD system it’s sales are dropping off quite a bit while 360 is still doing pretty well after the surprising success of Kinect (which has some casual appeal).