The Xbox 360 takes on the Wii with a struggle

Posted by Mark Raby

Microsoft has built a solid reputation with the Xbox 360 and some impressive franchises, most importantly Halo 3. But we have some trouble figuring out the future of the console, especially when Microsoft wants the Xbox 360 to be everything for everyone. Will the Xbox head right into an identity crisis and be in danger losing its appeal between the highly focused Nintendo Wii and Sony Playstation 3?


See the good and bad in the Xbox repertoire

Right now, Microsoft could not ask for a much more successful game platform. The launch and success of Halo 3 was stunning, by any standard. But if we look further, beyond the traditional gaming crowd, the Xbox - just like the Playstation -  appears to have run into some difficulty lately. Microsoft has recognized the need that the Xbox will need to find new customer groups and address segments that are opened by Nintendo Wii with games that appeal to everyone.  

And in the post-Halo 3 holiday season, it seems that Microsoft is really pushing to get the casual gamer to notice the 360.  Scene It, Avatar, Need For Speed Prostreet, and multiplatform games like Rock Band and the Lego Star Wars trilogy are all slated for the console by the end of the year. This isn't really in line with where Microsoft has gone over the past several years.

Looking back at the days of the original Xbox announcement, there were virtually no "family friendly" games originally shown.  The only readily recallable launch titles were Dead or Alive 3, Halo, and Project Gotham Racing.  The latter is the only non-violent game of the three, and PGR is not exactly just a sit-down-and-play title.  Players must go through several drawn-out races before they unlock enough stuff to be able to take the game in stride.  It's hardcore as far as racing games are concerned.  

Interestingly, Fuzion Frenzy, a party game, was also a launch title but it was a half-baked effort and downright terrible. From the very beginning, Microsoft showed it was not easily capable of making an enjoyable casual game or encourage developers to bring such a game to market.  That perhaps contributed to the company focusing on a limited scope of shooters, slashers, and epic PC ports.

In doing so, though, it managed to grab that audience by the heels and drag them into the world of the Xbox.  It has since become a very worthy contender in the console wars.  In fact, for a while the Xbox 360 was sitting pretty as the king of the current generation.  So obviously Microsoft has done certain things right.

Xbox 360: The successes

Speaking in absolute numbers, the Xbox 360 currently has more units sold in the US than the Wii.  Of course, Microsoft has had a one-year head start with a 2005 Xbox 360 launch compared to the 2006 PS3/Wii launch, but NPD’s  David Riley told us that has little to do with the console's success.  Microsoft's head start "plays a role but I wouldn't place too much weight on that statement," said Riley.

But, no matter how you slice it, in less than two years Microsoft has managed to truly establish itself in a market that the company needed to learn understand.  The 360 kind of came off of rocky shores as the successor to the Xbox, which really intrigued only a specific gaming crowd.

More than 13.4 million Xbox 360 units have already been shipped worldwide.  The number of Xbox Live accounts equals more than half this amount, which speaks volumes about the console's Internet innovation.  There are more Xbox Live users tan the total number of Playstation 3 consoles sold worldwide.

Xbox Live is the most prolific, most accepted, and most widely used online console gaming platform ever.  The "matchmaking" ability truly allows players to be matched up with equally qualified opponents, and the way it is so smoothly integrated with the console experience is perfect.

Let's compare that to the PS3, which has somewhat of a fragmented approach.  Every time you jump into an online game, it almost looks like you're taken out of the game and back to the Xross Media Bar before if eventually places you in the game lobby.  Of course, the PS3 also has a significantly smaller online community, which is a terrible blow.  Of course we can't even talk about the Wii because its online gaming offerings are nearly non-existent.  

Microsoft has also been able to take Xbox Live and make it a profitable, interactive service.  The video downloads, Xbox Live Arcade, and unobtrusive adverts mix the consumer experience well with the business goals. "Its online service is arguably the best in the console business in terms of profitability as well as reliability and retention," said Riley.

When speaking with us, Riley also praised Microsoft for its ability to create and maintain a handful of various models to fit every consumer's needs.  The company's "multi-sku approach with scaled price points and specifications make the console more appealing," he said.  This is in stark contrast with the PS3, which has discontinued and created new models left and right with no real strategy, or the single-SKU Wii.

So Microsoft has tackled hardcore games, online capabilities, and an innovative hardware strategy with flying colors.  It truly sounds like an unabashed success story, until you get to the chapter where it realizes the contender Nintendo has in the Wii.


Xbox 360 takes on the Wii?

The trend we have noticed over the past year or so with the Xbox franchise is an exponentially stronger bid to capture non-traditional gamers. The timing is interesting, because that is the same time that Nintendo's Wii launched, to mass acclaim and success.

Since then, Microsoft has been advertising its console as a more approachable, anyone-can-play-it product.  Previously, its casual gaming attempt was strictly relegated to the Xbox Live Arcade, which is a great outlet for people who already have a console, but is not a reason to buy one.

Recently, we've seen games like Viva Pinata: Party Animals, the ESA Holiday Bundle collection of three casual E- and T-rated games, and Beautiful Katamari, a colorful pick-up-and-play adventure.  It's a great start for Microsoft, but again none of these titles provides a reason to buy an Xbox 360.  There is no killer app for casual gamers.

Microsoft created the Xbox franchise largely as a destination to go online and kill people (virtually, of course).  That's a stigma that cannot easily be changed, and tossing in a couple games that have a childish look isn't going to make a paradigm shift in the way people view the 360.

Of course, it's not even enough to come out with great casual games.  Because the Wii has owned this market, that's where casual gamers will go first.  There needs to be something completely new, completely unique, and something that will actually dominate Xbox 360 headlines.  That hasn't happened yet, leaving Microsoft to just peddle casual game titles to the hardcore game crowd it has already captured.

Long story short...

Microsoft probably has the most solid console out there right now.  The PS3 has yet to gain momentum, and I'm still skeptical in thinking the Wii is just a novelty item.  There's not a whole lot to criticize when it comes to the Xbox 360.  The only problem is that Microsoft has "typecast" the console and so far has been unable to persuade the "non-traditional" gamers to pony up $300 or more on a new gaming machine.

Microsoft may be able to continue to ride the Halo 3 tidal wave comfortably through the holiday season, but given the Wii and PS3 lineups that probably won't be enough to come out on top.

One of two things will happen.  Either the Xbox 360 will hold strong and steady, and be the only console to have a solid record throughout this entire cycle, or the Wii will emerge as the new way to game, causing the 360 to subside.  Either way, Microsoft will hedge its bet by really devoting as much energy as possible into trying to convert non-gamers into Xbox 360 users.