Console War – IV Part I October 10, 2010

It all started with Sega.  After the abysmal failure of the Sega Saturn, Sega, now under new management in the US, made the intelligent decision to fix every problem the Saturn had with their next console, the Dreamcast.  They developed not just a high-powered graphics chip and CPU, but the developer tools to build games for the system made development easier, and allowed the designers to focus on quality.  It also had a built in 56k modem, which was standard on most PCs of the day, but unused in most consoles.  Multiplayer gaming since the days of Doom and Quake on the PC were becoming one huge thing that PCs were holding over consoles, and Sega US knew it.  To truly revolutionize, they needed online multiplayer support and that meant including a modem.  One thing it would not have would be DVD support.  A new physical medium on the block, it was literally the best format at the time for home media viewing, blowing away VHS and Laserdisc in quality. It also offered a larger storage capacity for games.  However, the technology would just be too expensive to include in the console at launch and had to be left out.  A slightly larger capacity CD-ROM would be used for physical media, and at the time, it would be enough.

Sega launched the Dreamcast with a high price point and one of the best launch lineups in gaming history.  They also had one of the biggest advertising campaigns ever. As the first console of the new generation and graphics that made all the current generation of games just look stale in comparison, the Dreamcast sold out its initial shipment almost immediately, and became the must own item of Christmas 1999.

However, something was brewing which would shake the very foundations of Sega’s plans for dominance.  With the CD-ROM storage solution, excellent hardware, and unbeatable third party support, Sony’s Playstation had been the winner of the previous console generation.  Sony’s successor to the Playstation, the Playstation 2, would launch a year after Sega’s Dreamcast, and while it wouldn’t have an amazing launch lineup like the Dreamcast did, it would have something at launch that the Dreamcast would not have, something to offer customers that would for the first time have a console trancend past just gaming unit, but make it an integral part of a new generation of home-theater technology, DVD.

The Playstation 2 shipped November 2000 and with only half the amount of consoles at launch than what was initially pre-ordered, and no must-own games at launch.  All Playstation 2s were sold before the start of the working day could even begin, and no one knew when more were coming.  At $299, the same price as a standalone DVD player, the Playstation 2 was a great value to early technology enthusiasts and gamers, two types of people who weren’t mutually exclusive.

The early launch may have helped Sega in the beginning, but it had also cost them dearly.  By not waiting for DVD to become affordable, it was not included in the Dreamcast and that was their undoing.  The release of Sony’s PS2 brought the death of the Dreamcast.  DVD was just too important to early consumers, and at Christmas 2000, a machine that did not have this functionality was passed up.  After Christmas 2000, and the clear winner of that Christmas being Sony by far, Sega threw in the towel and discontinued manufacturing Dreamcasts.  Games would still be released for a while, but third parties started switching gears to work only with Sony.  Sega, without a first party platform to develop games exclusively for, would become a software company making games for all platforms.

By March 2001, Sony could finally meet the heavy demand for the Playstation 2, which you could finally find in stores.  However, there were still two more consoles getting ready to launch, could they possibly see the same magic after the tremendous success of the launch of the PS2, or would they share Sega’s fate?

Nintendo was getting ready to release their next generation console, the GameCube, originally codenamed the Dolphin, and it would be ready to launch in the next near.  And there was a new contender in the ring, software publisher Microsoft, the most successful company in the world, and they had their own console and unlimited funds to produce it, the Xbox.

A lot of the gaming press was skeptical of Microsoft’s place in the console war, but Microsoft was not to be completely written off.  Sony was once a newcomer in the previous generation, and they were able to completely knock out Sega.   Microsoft was no stranger to games.  The Windows Operating System had been running games since it was founded, and technically Microsoft had already been a major player in the console war for years prior with the PC format.  The problem was Microsoft was and always had been a company that only made software, hardware had always been someone else’s job, and by selling software for hardware, Microsoft’s business plan had made them billions.  Now they would be making software and hardware and they had to compete with Sony and Nintendo.  However, Microsoft had an ace up their sleeve.  The success of the Xbox can all be staked on the greatest business decision Microsoft ever made, the purchase of game developer Bungie.

The Xbox was by far the most powerful console of the generation.  It had the fastest processor and the best graphics chipset.  It also had a built in hard drive, something that Sony had teased would be coming for the PS2 but would not launch with.  It also had an integrated network port which could be used for LAN play in games that supported it, something that would not launch with the other consoles either but was promised to come later.  This was just as essential to Microsoft’s business plan as the Dreamcast’s modem was to Sega.  People didn’t know it yet, but Microsoft was getting ready to launch a full broadband online gaming network which would revolutionize online play forever.

The last entry would again be Nintendo with the GameCube, but unlike the release of the Nintendo 64, people were just not waiting on the GameCube this time around.  Nintendo was really bringing nothing new to the table.  They had superior graphics to the N64, but they were still playing by the same rules.  A cartridge based game release was completely impractical (it was through most of the N64’s lifespan) but Nintendo was still going to try for a proprietary format to prevent piracy.  Instead of using a full DVD as the other companies were using, they would manufacture a smaller DVD, which would be difficult to copy.  However, this would still limit capacity per disk to less than half of what could be offered in the PS2 and Xbox, and make DVD playback impossible, the very thing that killed the Dreamcast.  But it did have a superior graphics processor than the PS2 and the exclusive software support of Nintendo’s first party, the very thing that made the N64 hold it’s own against Sony’s original Playstation.  At $199, it was priced to compete, but Nintendo would be taking a loss for every console sold.

It was now November 2001, Sega was out of the picture, and Sony’s Playstation 2 was quickly becoming the most successful product in history.  But now Nintendo and Microsoft were ready to lauch their products, hoping to take a piece out of the numbers the Playstation 2 were selling.

Would they be successful?  Stay tuned for Part 2, coming soon!