GamesIndustry.biz: The meaning of Christmas

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Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer a day after it goes out to GI.biz newsletter subscribers.

Although both Sony and Nintendo are launching consoles this Christmas, and Microsoft will be pulling out all the stops to dampen those launches, it's actually quite hard to quantify what, exactly, the battle to be fought in the coming months actually means - or whether there's any useful data that we'll be able to glean from it, even once the dust has settled in the early months of next year.

Take Sony, for example. We all know already what's going to happen when the PlayStation 3 launches - it's going to sell out. It's going to sell out every single unit of its allocation, regardless of the eye-wateringly high launch price or the as-yet mysterious launch line-up, and no remotely sane analyst or industry observer will tell you otherwise. The same is almost certainly true of the Nintendo Wii - the system is going to sell out, with a similar number of units hitting the market at a much lower price point than PS3, and a huge buzz among hardcore gamers about the system.

So in reality, the number of units which Sony and Nintendo sell by the time we're all getting frighteningly drunk on mulled wine and singing Scottish songs we only know five words of on New Year's Eve is absolutely meaningless, in market terms. It will be a reflection not of consumer acceptance of the price point, nor the concept - but simply of how many units both companies have managed to ship to retail. That, in itself, is a relatively interesting figure, but again has little or no bearing on the future success of either platform.

What about Microsoft, then? Here at least is a platform holder whose console is established enough in the marketplace that not every early adopter already has one - so this Christmas will represent a real test. Microsoft wants to hit the ten million unit mark by the end of the year, and to do this, will almost certainly have to break out of the hardcore audience that bought Xbox as a games system and into a wider demographic, so in a sense, this will be a telling few months for them. Even at that, however, demand for the Xbox 360 may well exceed supply - and only if the supply is consistently good will the figures actually be meaningful.

A few possible scenarios should be considered - chiefly, the question of what happens to the money people planned to spend on PlayStation 3 or Wii, but are inevitably left with when they cannot get hold of either console. The proportion of those buyers who convert over to the Microsoft camp rather than holding on to the cash until after Christmas or blowing it on a new iPod or other piece of similarly priced consumer electronics will be interesting to watch - and no doubt Microsoft feels likewise. Expect Xbox 360 to be by far the most heavily marketed of the three systems this Christmas, as Microsoft rushes to capitalise on the inevitable stock shortages of its rivals and build its installed base as high as possible before the real contest begins in the new year.

So, while we can expect much to be made of the media frenzy that will inevitably surround the stock shortages, the queues, the inflated eBay prices and the angry parents and upset kids on Christmas Day, in reality, few questions will be answered in the coming months - except, perhaps, the question of just how well Microsoft has done at integrating the Xbox 360 concept into the minds of consumers in the past year. If the Xbox can pick up sales from disappointed punters who wanted a PS3, then Microsoft will have won a serious victory over its rival - but if that doesn't happen, whether because the marketing message is too weak or, more likely, because Microsoft itself cannot meet demand, then the game will still be very much open as we head into 2007.

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