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War!

Crispin Boyer

When Reggie Fils-Aime gets his dander up, people listen—and not just because he’s built like a linebacker, bench-pressed almost 300 pounds in his younger days, and could crush you against his forehead like a spent Mountain Dew can. Nintendo of America’s 42-year-old veep of sales and marketing is taking aim at his company’s competition: “The other time Sony tried this strategy, it failed miserably,” he says.

Fils-Aime—who came to May’s Electronic Entertainment Expo videogame industry show in Los Angeles to sell the world on Nintendo’s just-revealed next system, the Revolution—is calling Sony out for debuting a PlayStation 3 that goes way beyond playing just games. “It reminds me of the PSX,” he says, referring to Sony’s Japan-only PS2/digital-video-recorder hybrid.

Sony, meanwhile, is claiming that its freshly unveiled PlayStation 3 packs twice the punch of Microsoft’s next-gen offering, the Xbox 360—which PlayStation inventor Ken Kutaragi called Xbox 1.5. “We are putting more technology into our box,” says Sony Computer Entertainment America President Kaz Hirai. “We’re future proofing it, certainly a lot more than our competitors’ platforms.” And when those words reach Microsoft’s camp, duck for cover. “Future proof? Come on—that’s our language!” says J Allard, corporate vice president for Xbox. “I think they’re responding to us. And here I was worried that Sony would say something or commit to something with PlayStation 3 that would surprise us. If anything, it just gave us a lot more confidence.”

Oh yes, you can tell we’re on the front lines of a new console hardware war when the fighting words fly like bullets between the frontmen for Nintendo, Sony, and Microsoft. It’s the most obvious sign that those systems sitting under your boob tube are about to become obsolete, whether you’re ready or not.

Is it too soon to crown a victor in the next wave of consoles? For sure—Nintendo hasn’t even shown the supposedly magical controller for its Revolution console (some say you stick it in your pants). But it’s never too early to analyze the new consoles, the games they will play, and their manufacturers’ big ideas. We’ve heard the trash talk between all the execs, chatted with scores of analysts and developers (some of whom spoke candidly on condition of anonymity), and dug as deeply as possible into the new hardware to give you the most in-depth analysis of the next wave of consoles you’ll find this side of their actual launches. You may not be able to pick a winner just yet, but chances are you’ll decide on which system is packing the most heat.

Countdown to D-Day

Gamers jonesing for the next generation now (or at least as soon as possible) have no choice but to turn to Microsoft. The company behind the Xbox—which has taken second place to Sony’s machine in the current hardware war—will release that console’s follow-up this fall, although Microsoft has yet to announce an exact date or price. In fact, all three hardware makers seem to be waiting for the others to name their system’s respective price, essentially drawing a line in the sand for the others to beat. Analysts we interviewed predict that the Xbox 360 will sell for $350, while Microsoft’s Allard recently hinted that the system might come in at $300. Whatever the price, it’ll probably land in the middle of the other two new systems. Microsoft has told us to expect four or so major games (more on them later), plus another 15 to 20, at launch.

Sony’s PlayStation 3—which promises to pack the most technological chutzpah of the three next-gen systems—will debut next; the company announced a spring 2006 launch, but we weren’t given a where or an exact when. “We haven’t decided which territory or territories, and we obviously haven’t decided [on] a date yet or a price,” says Sony’s Hirai.

If Sony’s PS3 launch strategy follows the history established by the original PlayStation and PS2, we should expect the system to launch first in Japan, then here by the end of the year. “Realistically, they are shooting for a Japan launch with three or four titles,” says one analyst we spoke with, “then a fall launch here.”

The PS3’s price is even pricklier to pin down. Analysts expect it to sell for around $400 or higher, but a quick look at the pricing strategy for Sony’s other hardware shows that the PS3 might come in for less. “Sony’s PSP was at least $50 less than I thought it was going to be,” says Microsoft’s Allard, referring to Sony’s cheaper-than-expected portable system, “so it’s hard to say what Sony’s going to do.”

And that leaves Nintendo’s Revolution, likely the last combatant—and perhaps the least punchy from a technical perspective—to enter the battlefield. One report puts the Revolution’s release around summer 2006, but Nintendo refused to confirm that date. The system’s price tag, however, is a little easier to chart. “I have to assume that from a pricing standpoint, we will be substantially lower than the competition,” says Nintendo’s Fils-Aime, “because we don’t have all that added fluff that a gamer, frankly, doesn’t care about.” Analysts expect it to hit for between $200 and $250.

The release schedule for this new batch of systems is a flip-flop over the last round, which had the PS2 launching before the Xbox and GameCube. Sony, however, doesn’t see losing the head start this time as a disadvantage. “When the Xbox launched in the U.S., our installed base here was about 5 million,” says Sony’s Hirai. “So if that installed base difference was still just 5 million today, then we might be concerned. But there’s about a 20 million difference, just in North America, in the installed base between Xbox and PS2, which means we’ve lapped them four times. So this logic of being first doesn’t really hold water.”

Still, industry watchers predict that Microsoft’s head start will keep the hardware war interesting—at least for a while. “We assume the Xbox 360 will have a 45 percent share [of the market] at the end of 2007,” says Michael Pachter, an industry analyst for Wedbush Morgan. “The PS3 will have a 33 percent share, and Revolution will have a 22 percent share. It’s tough to [predict] beyond 2007, but I think that Sony will eventually pass Microsoft.”

Hype machines

When the lights dimmed at Sony’s annual press conference at May’s Electronic Entertainment Expo, the gathered game-biz regulars expected the same old show: lots of facts and PowerPoint pie charts about the PS2’s dominance in the current console war, with maybe a glimpse of Sony’s next system. Instead, it was a full-scale bombardment. Sony execs skipped right to the unveiling of the PlayStation 3, a matte-silver feature-packed and supposedly “future-proof” machine. Its specs: impressive (see the Technobabble sidebar). Its game demos: spectacular (we’ll get to those later—honest). And Sony’s strategy for the system: well, very familiar.

It reminded us of Sony’s initial hype for the PlayStation 2, which debuted with the promise of becoming a “home server,” a Net-connected hub for downloadable entertainment, instant messaging—even an outlet for homebrew filmmaking. That was six years ago. When’s the last time you made a movie on your PS2? Now that Sony is unveiling the PS3 in what it calls the “digital decade,” we’re hearing the same promises: a system that’s the centerpiece of your living room and meets all your entertainment needs, from playing games to watching movies to communicating with friends online. Sony’s Hirai blames the limited penetration of broadband Internet access—which has only just recently reached half the country—for holding the PS2 back from its potential. Things will be different, he insists, with PS3. “This time around, we have gigabit Ethernet on the unit,” Hirai says. “I think it’s going to become a viable option for accessing content. It opens a whole new world of possibilities.”

Just don’t expect to see many of the possibilities aside from standard functions when PS3 hits next year. “We would like to see not only just games on launch day,” Hirai tells us, “but motion pictures in high-def [available on Blu-ray DVDs], and certainly the system will be online if we can come out with a service we’re confident in.” So far, Sony has given few concrete details about its online scheme for PS3. We know the system will have an always-on Net connection via its Wi-Fi or ultrafat Ethernet port. You’ll be able to surf the Web “if we determine that users want that function,” says Hirai. And you’ll use your PSP to access PS3 content from across the room or around the world. “You could fire up your PSP from a wireless hot spot in Japan,” Hirai says. “You could get right into your PS3 in America and access a role-playing game or whatever to continue what you’re doing or access other content you may have in your detachable hard-disk drive or Memory Stick. So literally, the PlayStation Portable becomes an extension of the PS3 you have in your home.”

But whether Sony comes up with a full-featured online service on par with Microsoft’s Xbox Live remains to be seen. “Microsoft seems to really put their eggs in the online basket,” Hirai says, “which I guess is one strategy. But we also don’t want to lose sight of the fact that it’s all about great content. It’s all about making sure you continue to grow the installed base of your hardware, making sure you continue that dialogue and relationship of the brand with the consumers that you’ve established over the past 10 years of leadership.” At the same time, Hirai says he’s not belittling the importance of online functionality, although he won’t say whether the PS3 will have a more centralized system like Xbox Live or if Sony will once again let third-party publishers sort out a strategy on a game-by-game basis, as was the case with PS2. “Online or broadband connectivity, whatever you want to call it, is kind of like air conditioning in a car,” Hirai tells us. “It was nice to have back in the ’60s. Now I don’t think you can find too many cars without air conditioning. So whatever final form that we decide to take, online is going to be an integral part of the PlayStation 3 experience, and by extension, the PSP and the PS2 as well. I want to make sure it’s a comprehensive online program as opposed to something that shuts out PSP and PS2 users or [is] just, ‘Here’s something for the next six months.’”

Microsoft’s soldiers, naturally, are keeping an eye on Sony’s online plans, which they say are just plain vague. “I think they’re right,” jokes Microsoft’s Allard, “the Internet’s going to be big someday. They should get one.” If you read our cover story last month on the Xbox 360.

Playstation 3 Weapons and Weak Points

Launch: Fall 2006 U.S. (Likely)

Price: $400 (Estimate)

Weakness: That Spider-Logo

OK, not to nitpick, but why does Sony’s PlayStation 3 logo use the same font as the Spider-Man movie posters (below)? Heck, Sony clearly has an obsession with Spider-Man. The company used footage from the second film in its PS3 demos and packed it in with the PSP. What gives? Anyway, we hope the PS3 logo is only temporary.

Weakness: Wireless Boomerangs

Courtesy of Bluetooth connections, the PS3 can support up to seven controllers wirelessly. But here’s the iffy part: Sony’s decided to change up the overall shape of the DualShock, giving it Batarang-shaped wings. We haven’t had a chance to test-drive the new controller, but at least we know it’ll always return if we chuck it in anger.

Weakness: The Hard Drive

Like the PS2, the PS3 will support an add-on hard drive for additional storage. Sony hasn’t decided whether the drive will come packed in, but we doubt it. That means say buh-bye to widespread hard-drive support from developers.

Strength: Slot Machine

But what PS3 lacks in surefire hard-drive support, it more than makes up for in other storage options. Aside from Sony’s own Memory Sticks (also used in the PSP), the system has slots for SD and CompactFlash memory cards.

Strength: USB 2.0 Slots

While the Xbox 360 has three of these and the Revolution has two, the PS3 has a whopping six. Expect to plug in anything from USB keyboards for Web browsing to EyeToy-style cameras and voice-communication headsets.

Weakness & Strength:Blu-ray Disc Drive

The choice to go with the Blu-ray disc format—which uses magical space lasers to hold six times more data than a standard DVD—is a gamble for Sony. “If Blu-ray becomes the standard for high-definition DVD movies, or if the two standards are merged, it makes the PS3 purchase much easier,” says Wedbush Morgan analyst Michael Pachter. But if Blu-ray goes the way of Betamax or the MiniDisc—two failed formats Sony has backed before—the company will be stuck with an expensive-to-produce format. Sony’s logic in all of this: Using the Blu-ray discs with the PS3 will drive the popularity of the medium and help make it the standard for high-def DVD flicks. The PS3’s drive supports standard-definition DVD movies, too.

Strength: Backward Compatibility

The PS3 will play PS2 and PS1 titles.

Strength: The AV Doohickeys

The PS3 supports every high-definition format known to idiot-box science, from standard 480i to the current HDTV standard 1080i to the next level of crystal-clear viewing: 1080p (see our “HD Dilemma” sidebar to understand this stuff). In fact, the system supports two 1080p screens working in tandem to build one enormous picture or to use one display for the game and the other for stats, videoconferencing, and so on (sort of like one giant, ultraexpensive Nintendo DS). Sony calls it “future proofing.” Microsoft and Nintendo call it overkill.

Strength: Superfat Ethernet Ports

The PS3’s Gigabit Ethernet connections are 10 times faster than the Xbox 360’s single port (PS3 also comes with built-in Wi-Fi connectivity). Ultimately, all that speed isn’t crucial to multiplayer gaming, which works just fine at conventional speeds. So why the turbo connection and, more importantly, why three jacks on the PS3 (two of them outputs)? We can only assume it’ll all factor into Sony’s eventual plans to distribute movies online, as well as PlayStation creator Ken Kutaragi’s vision of attaching multiple Cell-chip-powered devices (additional PS3s, for instance) to boost computing power. How this factors into gaming, we have no idea, but we’re positive very few people will buy two more PS3s just to pick up prettier prostitutes in Grand Theft Auto.

Top Secret Revolution Weapons and Weak Points

Launch: Sometime in 2006

Price: Between $200 and $250

Strength: Unsupersized

The final Revolution unit will be even slimmer than the one shown here. Simulate the size at home by stacking three DVD-movie cases and wrapping them in Scotch tape. Now stick a Revolution logo on your creation and sell it on eBay.

Weakness: DVD Support Sold Separately

In what can only be described as a major step backward, the Revolution won’t play DVD movies out of the box. Instead, you’ll need to buy a device to enable DVD play. “The fact is that most households now own one DVD player or two,” says Nintendo President Satoru Iwata. “We don’t want them to spend extra money just to have the DVD-player capability.”

Weakness: Wi-Fi Only

Yes, we’re happy that Nintendo is finally embracing online with its next console (better still, its online service will be free). The only downside: The Revolution doesn’t have a standard Ethernet jack; it only supports Wi-Fi connectivity. “We’ve come to the conclusion that Wi-Fi shall be the standard and Ethernet will be optional,” says Nintendo President Satoru Iwata. Better start saving for that wireless router.

Strength: Expandability

In addition to two USB 2.0 ports (a first for a Nintendo console), the Revolution will accept an SD memory card to expand the internal flash memory. Nintendo’s Iwata says these ports will give players the option of adding a hard drive. The more common use: You’ll be able to take downloaded games and other content to a pal’s system, unless you’d rather send it to their Revolution over the Internet.

Weakness: The HD Error

“HDTV for Nintendo is a lot like their online philosophy from this past generation,” says one analyst we spoke with. “They believe most gamers don’t care about it.” The Revolution will support resolutions no crisper than 480p—the same standard used by first-party GameCube games in the current generation. At least Nintendo is asking third parties to make all their games 480p compatible this time.

Strength: Super Backward Compatibility

Nintendo’s calling it the Revolution’s secret weapon: the ability to download (for a fee) and play games from the past 20 years of the company’s console library. That includes classics for the Nintendo Entertainment System, the Super NES, the Nintendo 64, and the GameCube. In fact, the Revolution’s self-loading drive accepts GameCube discs along with the new 5-inch Revolution discs, and the top of the system opens to reveal GameCube controller and memory-card ports (right). Nintendo won’t reveal pricing plans for game downloads, but Prez Satoru Iwata did tell us the company is experimenting with ways to improve the graphics of the older games.

The Mystery Controller

“I believe the analog joystick for the N64 changed games and the touch pad for the DS changed games,” says Nintendo President Satoru Iwata. “And I really want to change the game again with the controller for the Revolution. I think you’ll be surprised when you see it.” That’s great, so why don’t you show it to us already? Nintendo didn’t unveil the mysterious Revolution controller—rumored to be everything from a customizable touch screen to tilt-sensitive gyroscopes. One thing’s for sure: It’ll have conventional elements. Otherwise, how could we control all the old games you can download for the system?

Xbox 360 Weapons and Weak Points

Launch: Fall 2005

Price: Between $300 and $400

Weakness: “Just” a DVD Drive

When pitted against the Blu-ray media format supported by Sony’s PS3, the Xbox 360’s standard dual-layer DVDs come up short, holding a sixth of the data. But calling this a weakness isn’t quite fair; Blu-ray discs are expensive to produce and still far from becoming the standard media for high-definition movies. “It could very well be the wrong time to support Blu-ray,” says Shane Kim, general manager of Microsoft Game Studios. Plus, Microsoft claims that most Xbox games never came close to filling a standard DVD disc. Still, Xbox 360 titles such as The Elder Scrolls IV: Oblivion fill half a DVD with just voice acting alone.

Strength: Hard Drives for Everybody

Right now, the Xbox 360 is the only system confirmed to ship with a mass-storage device (we doubt the PS3 will come with its removable hard drive, and the Revolution will use separately sold SD memory cards). That means that because developers can count on every Xbox 360 owner having this 20GB removable hard drive, they’ll make games that take advantage of it. The hard drive also factors heavily into Microsoft’s online plans. You’ll be able to download game demos, more casual arcadey games, and other goodies to customize your experience.

Strength: Customize Me

Like it or not, Microsoft thinks of you as the “remix” generation, meaning it knows you like to personalize your cars and phones and, yes, even your videogame gear. That’s why it has given you the ability to go all Face/Off on your Xbox 360—you can change out its faceplate to match your game-room décor, your stereo components, or your passion for European death metal.

Weakness: Ethernet Port

The Xbox 360 is the only next-generation system without built-in Wi-Fi connectivity. Not a big deal—you’ll just need to spring for the separate Wi-Fi adapter if you crave a wireless connection.

Strength: Xbox Live

Microsoft’s online plans for the Xbox 360—honed by the 2-million-subscriber success of Xbox Live for the original system—are by far the most elaborate and concrete of the three contenders’. Xbox Live will be an integral part of the Xbox 360 experience, with vast community features and a free level of basic service to initiate online-gaming newbies and bring them together. See last month’s cover story for an in-depth look.

Weakness: Backward Compatibility

Last month in our Xbox 360 cover story, we said the system wouldn’t be backward compatible with games for the original Xbox. Well, Microsoft changed its mind. The company now plans to make the 360 compatible with the “best-selling” Xbox games—basically, “the games that matter most to consumers,” we’re told. (That’s the only reason we’re listing this feature as a weakness—because, unlike the other two new systems, Xbox 360 isn’t fully backward compatible.) Old games will even work on Xbox Live, meaning your Halo 2 skills won’t get rusty if you sell your original Xbox to fund your Xbox 360 purchase. The logistics behind playing these old titles, which will be emulated in software rather than driven by the hardware, have yet to be worked out. Expect to download a free fix for each old game you want to play. Microsoft is also working with third parties to help them make future Xbox 1 games playable on the Xbox 360.

Strength: Upgradeability

Microsoft execs hinted to us that they have the option to upgrade the Xbox 360 down the road if features such as higher-capacity media formats become crucial to gaming. “We’ll be able to evolve it,” says Microsoft’s Shane Kim.

Strength: USB 2.0 Ports

The system’s three ports will let you plug in digital cameras and MP3 players—even Sony’s PSP—to customize your Xbox 360 interface and play custom soundtracks. The PS3 may offer similar features, but so far Sony is staying vague.

Copyright © 2005 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in Electronic Gaming Monthly.






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