Analysis: Microsoft prepares to dominate global console market

Posted by Aharon Etengoff

San Francisco (CA) - The Nintendo Wii is currently the number one selling console. However, there are indications that Microsoft has unleashed a carefully devised strategy to ensure its global domination of the console market.

Indeed, Microsoft has successfully positioned the Xbox 360 as a "centrist" platform for both casual and hard-core gamers. For example, developers continue to release titles that appeal to a wide audience, including Prototype, UFC 2009: Undisputed, Fight Night Rd. 4 and Red Faction: Guerrilla.

In sharp contrast, Playstation 3 owners are constrained by a limited selection of games and are forced to endure long waits for DLCs that are typically available for other platforms months before they arrive on the PSN. Meanwhile, Nintendo's Wii is typically perceived as a "family" platform and shunned by the majority of hard-core gamers. Nevertheless, the Wii is extremely popular amongst individuals who enjoy playing interactive sports games and endless Mario Brother variants.

It is therefore reasonable to hypothesize that Project Natal could convince even dedicated Nintendo fans to turn in their Wiimotes for a truly "hands-free" interactive experience. Similarly, Natal's sweet Siren song is likely to tempt frustrated Playstation owners to write off their (heavy) losses and relegate the PS3 to an overpriced Blu Ray player.

Microsoft Project Natal

To be sure, Microsoft has already managed to pull ahead of both Sony and Nintendo in the online entertainment sector. According to Strategy Analytics games analyst Martin Olausson, the Xbox 360 is "ushering in in a new era of digital entertainment."

"With Project Natal, full HD streaming of movies and TV shows, and new social media features, [the] Xbox [will] continue to put new challenges to its competitors in the battle for online entertainment leadership," said Olausson. "So far these challenges have gone largely unmet and as a result Nintendo and Sony are falling further and further behind in the online entertainment market."

Olausson explained Sony and Nintendo announced "some new updates" at the 2009 E3 conference, including the PSP Go and Wii Motion Plus. However, in Olausson's opinion, the two simply recycled "more of the same." Olausson also noted that neither firm offered a "clear vision" for entertainment services beyond the core gaming features of their respective consoles.

Unsuprisingly, Microsoft Xbox 360 and Live product manager Aaron Greenberg expressed similar sentiments in a recent interview with PC World.  

"If you want great games and you're only going to buy one system, you have to get the Xbox 360, because we have all the big games," opined Greenberg. "It's also what we've done with online, with Xbox Live, building the online community, the entertainment offerings, and the way we're really pushing the envelope I believe with all the new innovations we announced at E3. That's just this holiday. Then you start to think about Natal, and where we're going with the platform in terms of making it more appealing to more people."