Fahrenheit 360
The fight for the living rooms of the Western world is on. And with Sony losing ground to an aggressive and effective Microsoft — and the coming frenzy around the Xbox 360 — the stakes have gotten even higher, writes Murray Whyte
t’s May 2001, in Los
Angeles. E3, the stillnascent international gaming expo, is offering a glimpse into the future of its mushrooming world with a three- way introductory keynote speech: Peter Main, an executive at Nintendo; Kaz Harai, the CEO of Sony Computer Entertainment; and Robbie Bach, whose title, “ chief Xbox officer” for Microsoft, to that point, was little more than a speculative red herring in Microsoft’s make- believe — and as- yet unrealized — game- world aspirations.
There was no Xbox. At least, not yet. Rumours that Microsoft was behind schedule and over cost — more than a half- billion dollars had gone into the Xbox’s creation, it was believed — had made it the Flying Dutchman of the game world: was it real, or just a vividly imagined nightmare? Bach was earnest and open, doing his best to win confidence as he pitched the non- existent machine to a crowd of seasoned game veterans. But he was uncomfortable, a little awkward, and on edge. The fact was lost on no one, least of all Harai. Bolstered by Sony’s gruesome victory in the last round of the game console wars, when it mercilessly destroyed Sega’s Dreamcast system with its market- dominating Playstation, Harai’s brash confidence was on full display. The only question left for the future of gaming, he said, was not which console would be first, but rather who would be second and third. Harai berated Bach’s as- yet unfinished Xbox as a second- rate ripoff of Sony innovation. “Follow our lead, follow our lead,” he chided openly, while the ever- earnest Bach slumped sullenly in his chair. When it was over, Main and Harai shook hands for the cameras, lacquered photo- op grins well in place. Bach shrugged off any such pleasantries. “ No, thanks,” he said, drifting away from the others. Battle lines had been drawn. This was war.
Nearly five years later, perhaps to Harai’s surprise, not only is the war not yet won, it’s just beginning. Xbox launched six months after Bach sulked offstage at E3, with online capabilities that put Sony’s to shame. While it can’t come close to Playstation’s worldwide numbers right now — Playstation has sold 80 million units worldwide, Xbox only 20 million — Microsoft pushed past Nintendo, a gaming icon, with a product that, four years ago, didn’t even exist.
IWith the beachhead established, Microsoft’s invasion force is ready for a full offensive. “ Microsoft does not enter markets to be No. 2,” was the blunt assessment of Jason Anderson, Xbox Canada’s head of marketing. “ Now is the time to move to market leadership.” The weapon is the Xbox 360, a $ 300, almost frighteningly powerful upgrade on its original Xbox console. And it bears all of Microsoft’s equally frightening corporate tenacity and promotional might.
It’s due to be released just before “ Black Friday” — the Friday before American Thanksgiving, and the cusp of the deep tumble into the Christmas retail bonanza. Xbox will launch in Toronto at a daylong party at the Guvernment, a massive lakeside nightclub, on Nov. 21, with stores across the country opening at midnight — the first instant of the official Nov. 22 release date — to begin what most expect to be a buying frenzy. Meanwhile, the worldwide launch for the 360 — called Zero Hour — will go down in the middle of the Mojave Desert beginning at sunset, Nov. 20, and continuing until Zero Hour: the game’s release at start of Nov. 22. “ Gamers at ‘ Zero Hour’ will have bragging rights to say ‘ I spent over 24 hours at the epicentre of the gaming universe,’ ” Microsoft executive Peter Moore proudly told Gamespy, an online gaming magazine. Hype- building is an essential part of the game world, a niche industry that has constantly tried to reach beyond its hardcore, mostly male constituency. And Microsoft, with an internal projection to sell 3 million 360s in its first 90 days, has been building it for months.
ere in Toronto, on a recent
afternoon in the blackwalled space of one of the many interchangeable nightclubs of the entertainment district — this one, for the moment, goes by the cryptic moniker Lot 332 — they unleashed the 360, in the mesmerizing rapid flash of dozens of screens. The event, like any earnest, shameless self-promotion assembled for the express purpose of corralling members of the media long enough to create a sense of obligation, featured thin coffee, not very good sandwiches and a raft of mass- produced, over- sugared baked goods sweating out their edible oil- product centres in the cathoderay glare.
Needless to say, though, no one was there for the food. No, they were there to see the future.
Crisp, almost disturbingly real
Hgraphics — the waxy, glassyeyed verisimilitude of Electronic Arts’ NBA 2006 is just creepy: not real enough to seem like actual film, but too real to be brushed off as a computer simulacrum, it sets into motion livingdead style versions of Steve Nash, LeBron James and everyone else — mesh with multi- layered stereo soundtracks.
At one wide screen, Montrealbased Ubisoft showcased King Kong, a companion to Peter Jackson’s blockbuster movie remake, to be released next month. It was one of the first games to be designed expressly with the 360’ s power in mind.
“ King Kong — on the PS2, it looks pretty good. But then you play it on the Xbox 360, and you go, ‘ My God!’ It’s the only version you want to play. It’s so much richer,” said Mario Coculuzzi, one of the senior producers on King Kong. “ There are goals the industry in general is setting: How can we enlarge our market? We look at Microsoft, with the new console, and we see another way.” And if the 360 — a multi- purpose, multi- media hub with a myriad custom processors, visual density and online capabilities that put all but the most potent desktop computing systems to shame — isn’t the future, it could well be Microsoft’s.
According to some estimates, Microsoft has lost more than a billion dollars selling Xboxes in the past four years, trying to gain a toehold in the market. It’s a huge risk, but the rewards are great: by 2007, the global gaming industry is expected to be worth $58.4 billion. In 2005, that value is pegged at about $35 billion. By 2012, between Sony, Microsoft and Nintendo, more than 200 million consoles will be sold, according to estimates by Strategy Analytics, a U. K.- based research firm.
“ Anyone who thinks our industry is built on 17- year-old boys playing alone in the basement,” said Anderson, “ doesn’t know what they’re talking about.”
Indeed, the 360 is no toy. It plays high- definition DVDs. It stores MP3s and digital photos. It communicates happily with your iPod — a nod, perhaps, to the kind of market dominance Microsoft aspires to in the future world of gaming. The only thing standing in the way? Sony. But it’s not the same Sony Harai so brazenly represented four years ago. Its stock price is one- third of what it was five years ago. Its market dominance in electronics has long- since been usurped. Earlier this year, Sony’s board appointed the first non- Japanese CEO in its history, Welsh- born Howard Stringer, to right the ship. For the past several years, though, Sony’s financial lurching has been buoyed by its one consistent profit centre: the Playstation.
It’s rich ground — rich enough to sustain a flagging multi- billion dollar corporation deep into not only electronics but also movies, with Sony Pictures, and the music industry, with Sony Music. And it’s no wonder Microsoft wants in.
he future gaming console
will do it all — music, movies, games, photos, the Web — and in the battle for the living room, there is no doubt that Microsoft will show no mercy. In the early days of the Xbox’s development, inside the company’s walls, it was referred to as Project Midway, a reference to the Battle of Midway in 1942, which was the turning point in the war in the Pacific. Of course, before Xbox’s launch, the only console makers in the world — Sony, Nintendo and Sega — were Japanese.
In the years since its launch, Microsoft has been true to its aggressive reputation. Massive hit games it developed in its own studio, like the Fable and Halo series, have remained exclusive to the Xbox, despite the industrynorm of producing games for both platforms. Even Sony’s exclusivity deal with the wildly popular Grand Theft Auto franchise has an expiry date: Sony was only able to negotiate six months of exclusivity before the game’s publisher, Rockstar Games, produced an Xbox version. Sony’s big current release, Colossus, will eventually come in Xbox format as well.
Microsoft, meanwhile, has quietly gone about buying up hit game makes and wiping Playstation versions away. Rare, the U. K.- based maker of the popular Perfect Dark
series, was the latest purchase. Perfect Dark is now an exclusive Microsoft property, never to be anything else again. The Xbox itself was initially conceived as a defensive strategy, a way to address the “ threat to the PC business in the home because of the Playstation 2,” wrote Dean Takehashi in his book, Opening the Xbox: Inside Microsoft’s Plan to Unleash an Entertainment Revolution. But defence had never been Microsoft’s strong point. At an early meeting on the Xbox and Microsoft’s other incubator home-entertainment project, WebTV, Bill Gates himself chose to go the gaming route. “ I’d love to attack them on both fronts,
Tbut can we really hope to execute on both plans?” Gates asks in Takehashi’s book. “ Our goal needs to be to contain Sony.” The attack on the game front was aggressive and forwardlooking. The Xbox went from matching the PS2 to surpassing it, with a hard disk for internet downloads, a high- speed internet connection and a revolutionary online system that allowed players all over the world to not only play against one another, but speak to each other over the internet via an Xbox headset. It established itself as the online gaming system — a stillsmall segment that most in the industry see as the future. “ Live is going to be so much more than anyone thought it was,” Coculuzzi said. “ No one knows where it’s going to end.” But Sony is hardly going to roll over and die. “ All the next generation games have online components,” said Rich Vogel, the former head of Sony’s online gaming development. “ They realize the value of it, and they’ll come out different next time.” Next time is this spring, when the Playstation 3 comes out, rumoured to have enough power and online, broadband might to surpass the 360. But it’s also rumoured to cost twice as much as the 360.
“ That’s one of their challenges,” said David Mercer, a game industry analyst with Strategic Analytics. Mercer has authored several reports on online gaming over the years, and sees $47 billion in revenue for the taking in the next seven years. But who will take it? For all their aggressiveness, Mercer’s not willing to bet against Sony. “It’s going to be a close-run thing, and Sony will have to do a real job to keep up,” he said. “ The odds are still with them, though.”
It’s all riding on the PS3, Mercer acknowledges. Strategic Analytics projects that, by 2012, Sony will have sold 120 million PS3’s, compared to about 60 million Xbox 360’ s. “ It could be the beginning of a revival for the whole company, but they’ve got to get it right,” he said. The wildcard, though, is in his report: The only thing preventing the PS3 from becoming the dominant console, Mercer wrote, “ is Sony’s own mistakes.”
“ One thing you can always see in Microsoft is their perseverance,” Coculuzzi said. “First time around, they come to understand the market. Second time, they deliver something in synch. And the third time,” he said, “ it’s game over.”
For those watching and waiting, on Nov. 22, it’s game on.