The PS2 Factors

Playstation 2 has been regarded as the most successful console in the history of video game. It has sold 120 million units as of 20 September 2007(according to Kaz Hirai on TGS 2007) and it is still selling at an amazing rate in its 8th year now (1.1 million units in December 2007). With this amazing success, just like what iPod is to the MP3 player industry, there must be factors that determine its success. So, this post would basically outline what those factors are and which current-gen video game consoles already have them. Ok, without further a due, here's the lucky 7:

1. Long Launch Shortage
Affect: Nintendo Wii

Playstation 2 started with a boom. According to Wiki, one day after the launch of PS2, 980,000 units were sold in Japan. After that, you could not find it anywhere in the store shelves, but ebay. And sometimes, you have to bid as high as $1,000 to get it.

Sounds similar to something recently? Yeah, the current-gen Nintendo console, Wii. Wii is selling like hotcakes, 20.13 million units by December 2007. This is amazing, considering that Wii was just launched a year ago. It is this success that creates Wii shortage almost everywhere in the world. According to Wiki, as of March 2007, some UK stores still had a shortage of consoles, and as of June 2007, demand still outpaced supply in the US.

This shortage could mean that a lot of people who could not get a Wii would be forced to buy another console. However, this shortage could also lead people to follow the hype and buy the Wii. According to the survey performed by a Japanese website kakaku.com, forty-three percent said they wanted to buy the "most talked about console" (hype). This survey might be limited to Japan, but expect a pretty similar number in US and Europe since Wii and PS2 success with shortage have been evident enough to prove this percentage.

2. Launch Price Point
Affect: Nintendo Wii, XBOX 360

Playstation 2 was sold at $299 on the day it launched in US in the year 2000. If we take inflation rate of roughly 3% into account, that would translate around $ 360 by the end of 2006( the period where PS3 and Wii was launched). Seeing the success of PS2 with that price on its launch, Microsoft provide 2 SKUs for its 360 console, one with the cheaper price of $299(as of launch in 2005). And Nintendo priced its Wii console, as much as you want to argue that its specs is inferior, at $250.

This relatively cheap price really help Wii to establish itself in the market by selling 20,13 million units, as I've mentioned above. This number even outsell XBOX 360 by almost 3 million units that launched a year earlier. How about PS3? Playstation 3 was also launched with 2 SKUs, 20GB version and 60 GB version. The cheaper of the two was priced at $499. We know that it is packed with features, Blue tooth, Wi-Fi, and BluRay. But the price is just overkill for  a video game console. So, while PS2 sold roughly 980,000 units on its first 24 hour after launch in Japan, PS3 only manage to sell 81,639 units.

Price point at launch is very important as it is the first period to create a good momentum for the console sales. Thus, as much as PS3 is doing fine by selling respectable number of consoles every month, it could have done much better if it was priced at a reasonable price points at launch.


3. One SKU at Launch
Affect: Nintendo Wii

PS2 come with one SKU at launch (ok, basically all last-gen consoles only have one SKU), and so did Wii for this generation. So, why did 360 and PS3 have to offer 2 SKUs, or even more now? The more SKUs a console have, the more confused the buyers are. Especially for someone who is not a hardcore gamer, those that did not actually follow game news, etc. This confusion makes it hard for consoles like 360 or PS3 to expand its market to a casual gamer demographic which mean a loss of a very large market.

4. Third-Party Success
Affect: XBOX 360, Playstation 3

Playstation 2 taught one very important lesson. Third-party success equals to an amazing console success. The more third-party games sold on one console, the happier the publishers are and the more eager of them to publish games for a console, be it multi platforms or more importantly, exclusives. For example, we could compare PS2 with Gamecube in term of the success of third party titles and its effects for last-gen console war. Gamecube have lots of exclusives from Japanese publishers at first, like Viewtiful Joe, or Resident Evil 4. Even though they are great games, the sales of these titles just fail on Gamecube, unlike Gamecube's own first party titles. This leads the publishers to think twice before they did an exclusive for Gamecube and choose multi platform instead. Furthermore, most Gamecube's exclusives become multi platform in the end. Dreamcast lost to PS2 was also because the lack of third party supports from EA or Square Enix, etc.

XBOX 360 has done very well in this generation of console in providing an amazing market for third party games to succeed as could be seen from, for example, the December 2007 NPD sales in which Call of Duty 4 sold 1.4 million copies for 360 version alone. Or Assassin's Creed 360 version that sold 893,700 copies. PS3 is also a good market for third party titles as the Call of Duty 4 was able to sell 522,000 copies on PS3. This number is pretty good considering PS3 only have 1/2 install base that of 360.

Wii itself is doing what Gamecube did, sell first-party titles, forget about third-party. It is only because it have such a 'different' control system and therefore gameplay mechanics, other than its large install base for a 1-year-old console of course, that it managed to get some decent third-party exclusives.

5. Focus Aggressively on One Market then Expand
Affect:Nintendo Wii, XBOX 360

PS2 focus on games. As much as PS2 could play DVD, it is not a good DVD players. It lacks features and it breaks easily (my one cannot play DVD anymore a year and a half after I've bought it). But rather than becoming its disadvantage, it became its advantage. It helped focus PS2 market, not as a DVD player, but as a GAME MACHINE. And a hardcore one at first, as it offered titles that was similar to PS1, in term of gameplay, etc. But then it improved by providing more casual games, like Singstar or Buzz and did it successfully. This is one of the reason PS2 has sold well and still selling well. It is appealing to EVERYONE, be it hardcore gamers or casual gamers.

Learning from PS2, XBOX 360 did roughly the same. It could play DVD, sure. But nobody buy it as a DVD player or HD-DVD player for that matter. It focus on games through its advertising campaigns, hardcore games that is. It started with Gears of War as the first high-selling exclusive hardcore title, followed by Forza 2, Bioshock, and Halo 3. Those titles are selling well and so does 360. However, Microsoft was not successful when they tried to expand their wing to casual gamers demographic through games like Viva Pinata or Scene It. If they want to be as successful as PS2, then they have to successfully exploit this market as well.

Same could be said to Wii which, through its advertising campaigns and first party titles, aggressively target casual and non-gamer market. Wii advertising really de-emphasize hardcore games like Metroid Prime 3, even though it's first party. Although, it is now trying slowly to expand to hardcore gamers through games like Mario Galaxy or Super Smash Bros Brawl later on.

Therefore, it is really disappointing to see Sony lose focus for its PS3. It tried to be the best BluRay player on the market, the best multimedia center for home entertainment, and the most advance game console at once. These have caused a high cost in production, resulted in loss in every PS3 unit sold, and slow sales. Because a budget  and casual gamers would reconsider buying it since all they want and need is to play games, not watching HD movies. And 360, or even Wii for casual gamer, is the cheaper alternative.

6. Franchise Exclusives Rule
Applied by: XBOX 360, Playstation 3, Nintendo Wii

No matter how you want to argue, this is also a very important factor in determining a console winner. PS2 have Gran Turismo franchise, MGS franchise, Final Fantasy franchise, Tekken franchise, Resident Evil franchise, etc that followed it since the PS1 era. Add this list with new or newly famous exclusive franchises (like Devil May Cry, Kingdom Hearts, Grand Theft Auto 3) that appear in PS2 era, it is no wonder that PS2 rule the last-gen console war. Compared to XBOX 1 that only have Halo and probably Fable to be proud of.

This gen, however, it is more evenly spread. 360 get quite a bit of ex PS2 exclusive franchises, like Devil May Cry, Resident Evil, or Grand Theft Auto. And 360 itself got quite a bit of good new exclusive franchises like Gears of War or Mass Effect. PS3 still have Gran Turismo, Metal Gear Solid, and Final Fantasy, and other first party exclusives. While Wii happen to get some new third party exclusives, other than its famous first party titles, due to its motion controller. So this generation of consoles, there is no console that is really overpowering the other in term of exclusives, unlike the PS2.


7. The Mod Power
Applied by: Nintendo Wii

Whether you believed it or not, the modchip contribute to the success of a console. I am living in Australia now, and all my friends that have PS2, have modded PS2s which allow them to play erm...backup games (read: pirated games). This situation is even worse in countries like Indonesia, Malaysia, China, or Thailand. Almost half of my class when I am in my high school in Indonesia, which is around 20 people, have PS2s and all of them are modded. Some of my friends there actually, at one point, thinking about buying Gamecube for some of its exclusives but cancel it because there is no pirated discs yet. And  this situation is not only happen in  Asia, I believe, it also happen in US and Europe, although with a much smaller number.

So what console have already been modded now? The answer is Wii and 360. But since 360 hardware is very unreliable, one of my friends who  open a  game store in Indonesia have decided not to mod them anymore (except the buyers want it to be mod at their own risk) since it would void the warranty. And I believed the others have done the same. But Wii is a different story, it is reliable. Thus, I have my 2 cousins have 2 modded Wiis, and 2 other friends with 2 modded Wiis as well. None of them have 360 or PS3 with the reason that the games are expensive. Even though they all have PS2 and love its exclusives, like MGS series or FF series or GT series.

In conclusion, there are many factors determining a video game console to be successful. These factors is complementing each other. Therefore, missing one factor could result in missing another and in the end cause a console to fail. Anyway, thanks for reading.