What PlayStation Can Still Teach the Industry

Console games went through a huge transition when the 16-bit era gave way to the 32-/64-bit era. In fact, it’s arguably the most tumultuous time the video game industry has gone through, barring the infamous Crash of ’83. Mascots who had dominated the second dimension took their first shaky steps into the third. Camera angles, depth perception, and other non-issues in the 16-bit realm streaked to the fore of every new game. And Nintendo and Sega were confident that they would go to war with each other in this brave new world, the same as they’d battled for 2D supremacy with the Genesis and the Super Nintendo.

Sega and Nintendo were, in fact, over-confident. Sega believed that it could release the Saturn with a $399 USD price tag. Nintendo believed that its fans would wait forever for the N64, and wouldn’t mind the sky-high price of 64-bit cartridge games. It’s not likely either company suspected that their once-faithful fan bases would become very interested in a relatively cheap and well-supported 32-bit dark horse, the Sony PlayStation.

The PlayStation is now 15 years old. It didn’t have the name power wielded by Sega or Nintendo at the time, but it still swept the generation succeeding 16-bit. Sega and Nintendo both learned important lessons that generation. Sega came to realize that a $100 price difference pipes a powerful siren song. And Nintendo learned that people will eventually get tired of empty promises and will move on–especially if the other guy is offering Final Fantasy VII.

The question is, did any of these lessons stick? It’s not just a matter of Nintendo and Sega learning from its mistakes; every company, regardless of its position, needs to keep a close eye on past trends. Learning through observation is preferable to learning the hard way, at least as far as business is concerned.

When Sega developed consoles, it had a tendency to move quickly. The time was ripe for the Genesis, certainly in North America, where Nintendo had intimidated retailers in order to shut out Sega’s 8-bit console, the Master System. The Super Nintendo eventually wielded superior technology against the Genesis, but Sega already had a head start (and a brilliant marketing campaign) that helped carry it through the ’90s, even when the console started showing its age.

But Sega’s repeat attempt to be “First!!” backfired magnificently with the Saturn. The company had already poisoned the faith of its fan base with the lukewarm SegaCD and the 32X, a plug-in that was supposed to bump the power of the Genesis up to 32 bits. Support for the 32X was miserable, and Sega’s faithful didn’t simply forgive and forget. When Sega pulled a coup at E3 1995 by releasing the Saturn early with minimal software support, few bit. Especially since Sony pulled a coup of its own by dropping the price of the PlayStation to $299 directly after Sega announced the Saturn’s surprise release.

A wiser, more somber Sega was sure to tread more carefully where the launch 1999 of the Dreamcast was concerned. But, once again, being “first” proved disastrous. When the PlayStation 2 launched in 2000, it made the Dreamcast look weary by comparison. Moreover, the PlayStation 2 offered DVD playback in an era where families were very interested in affordable DVD players. The Dreamcast staggered and died, and Sega pulled out of hardware manufacturing.

Nintendo survived. In fact, it pulled in a profit with the N64 and its successor, the GameCube, but Sony’s runaway popularity cost it its easily-recognizable name. Kids didn’t play “the Nintendo” anymore. More often, they defaulted to “the PlayStation.”

Obviously, the Wii has done a bit to restore Nintendo as a worldwide brand. In fact, the companies’ fortunes have shifted around like a game of musical chairs. With the success of the PlayStation and PlayStation 2, Sony believed that gamers would obviously default to the PlayStation 3 as they had in the previous generations. In 2005, former Sony Computer Entertainment chairman Ken Kutaragi even told Japanese economic website Toyo Keizai that he expected people to get a second job in order to afford the PlayStation 3. Kutaragi’s comment garnered some anger, some laughter, and a lot of eye-rolling on message boards. And, once again, the North American buying public demonstrated that there are options besides sitting around and waiting for the late release of an expensive console. The Wii sales broke records and the Xbox 360 made a very agreeable replacement for the PS3.

This console generation has been a long one, however, and Sony has found ways to save face. Lowering the price of the PlayStation 3 has helped pique buyer interest–and the system’s stamina is admirable, especially considering its Blu-ray player makes it among gaming’s best values today. With the economic downturn that defined the late Aughts, Sony could have picked a worse generation in which to nurture the PlayStation 3′s slow, gradual growth.

And here, it seems, is where Microsoft, Sony, and Nintendo have all learned a valuable lesson: It doesn’t always pay to be the first one out of the gate with a shiny new console, especially when unemployment is at a historical high. Right now, the three companies are content to circle one another and watch carefully, hopefully determined not to repeat past mistakes. Only time will tell how it’ll all play out. Amusingly though, as always, the golden rule remains: He who has the best games wins, as long as the system they’re played on also offers enough value to keep players busy between these blockbuster outings.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

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