E3 '07: Analysts size up big three

A handful of industry watchers share their reactions to the news from Nintendo, Sony, and Microsoft.

SANTA MONICA, Calif.--The E3 Media and Business Summit kicked off with press conferences from Microsoft, Nintendo, and Sony each dropping its own salvo of bombs (be they poorly told jokes or big announcements).

Microsoft showed off a slew of games, including Viva Piņata: Party Animals and an Xbox 360 edition of the trivia game Scene It. The company also dated Project Gotham Racing 4 and Mass Effect, and gave new looks at Call of Duty 4 and Resident Evil 5.

For Nintendo's part, the company basked in recent financial successes with a wealth of stats and showed off three new peripherals: the gunlike Zapper, a steering wheel meant for the new Mario Kart Wii, and the Wii Balance Board, which comes with the conference's main event game, Wii Fit.

At Sony's show, the electronics giant showed off a revamped PlayStation Portable, announced a deal with NCsoft for exclusive PlayStation 3 massively multiplayer online games, announced that Unreal Tournament III would be PS3-only for this year, and showed off Killzone 2.

With the show now in full swing, GameSpot stole a few moments from a handful of industry analysts to get their gut reactions to what was (and wasn't) announced during the conferences.

Wedbush Morgan Securities' Michael Pachter said before the show that he expected an Xbox 360 price cut by the end of the Microsoft conference as an answer to Sony's $100 PS3 price cut from earlier in the week. With no such cut materializing, Pachter admitted he was wrong, and said that Microsoft is in a tough position right now because of the recently announced warranty extension for the system. He said a price cut now might send the wrong signal to consumers about the quality of the hardware, and they could save the price cut until they can reassure consumers that whatever was wrong with the system has been fixed.

Nollenberger Capital Markets' Todd Greenwald said the lack of a 360 price cut was probably the right move. "A price cut in July or August probably doesn't do much," Greenwald noted, "especially when there still isn't a compelling reason to buy a PS3 (despite the big $100 price cut)."

As for Sony, Greenwald gave the PSP redesign a yawn. And while he called the company's conference "underwhelming," he said it appeared as though they were lining up a strong slate of games for next year.

Greenwald seemed most impressed by Nintendo, saying the Wii maker can basically call its own shots for now. "I think the Zapper looks great, really great," Greenwald said. "Wii Fit should expand the market even further for Nintendo, and maybe some nimble publishers like Ubisoft and Majesco can benefit from it. I don't think it will be as big as Brain Age or Wii Sports, though."

The Yankee Group's Michael Goodman thought Wii Fit was "really cool," but doesn't expect it to meet the same success as other Nintendo breakout hits like Brain Age and Wii Sports.

"The reality is that the Wii is not expanding the market as much as Nintendo wants us to believe," Goodman said. "According to a publisher I have spoken to, less than 10 percent of Wii buyers did not previously own a console. So basically, Wii growth is coming at the expense of other console manufacturers--mainly Sony--not by expanding the market. It is only once a Wii enters a household that others start using it. Wii Fit will require those 'non-gamers' to go out and buy the board and software, which I'm skeptical of."

Lazard Capital Markets' Colin Sebastian was perhaps a little more optimistic about Wii Fit, saying it "looks good and will appeal to the casual audience that Nintendo is tapping into." He still expects a price cut on the Xbox 360 to arrive later this summer, and overall he said the conferences went pretty much as he expected, "which probably favors Nintendo."

526 Comments

  • YukoAsho

    Posted Jul 27, 2007 9:08 pm PT

    quincy0191 - There's more to the "console war" than hardware. Month after month, we've seen that games outside of the traditional Nintendo franchises just don't sell for the Wii. Even in what is supposedly a "banner month" for Wii in June, the only things outside the big three that have sold are Wii Remote + Wii Play (I think we both understand it's not selling on its' own merits), Resident Evil 4 (a title aimed squarely at core gamers that has been released THREE TIMES before), and all the way at 19, Big Brain Academy. Victor Ireland once said this of the Dreamcast, and I'm going to say it about the Wii: "Who cares if there are 55 million if they're all in closets?"

  • Emperor_Ming

    Posted Jul 26, 2007 2:46 pm PT

    The problem with Nintendo is they cut costs at every corner to produce a console just for games, that is nothing more then a gamecube with a gimmick controller that Sony stole the thunder of (I admit, unfairly, but thats big business) In three or four years, the Wii will not sell any longer, regardless of how cheap, because frankly, 640 resolution games arent going to cut it against the 360's supposedly 7 year cycle, and the Ps3's supposedly plus ten year cycle.

    Also, these analysts are full of crap. PS3 price cut in summertime influenced a 135% sales surge, thats a huge surge when even a 20% sales increase would have been healthy.

    And Microsoft has basicly lost, they lost all their cummalative costs (1.8 BILLION United states benjamins) Have gimped hardware that even they admitted have no idea what the specific problem is, and lost a bunch of third parties to PS3 (Haze by Ubisoft, UT3)

    Sony's strategy if they can keep it up might be slow, but its been very effective thus far in a console war. Stay quiet and outlast the competition.

  • quincy0191

    Posted Jul 23, 2007 1:46 pm PT

    I can't see Nintendo losing this war. They already make money on every console, games are cheaper and easier to develop, as well as offer more possibilities (The Wii controller has enough buttons to support a simple port of a PS3 or 360 game), and SCE lost $2 billion developing the PS3, while MS's warranty extension caused their gaming division to lose $1.89 billion, and though MS's gaming division is making money without the cost of the warranties factored in, SCE is not. Both are posting huge losses overall, while Nintendo is doing so well their shares rose above Sony's a little while back, despite the fact that Sony has six times Nintendo's revenue. Sure, it's a marathon, but the tortoise and the hare is bull. Nintendo is not showing any signs of needing to rest.

  • AgentA-Mi6

    Posted Jul 23, 2007 1:09 pm PT

    Sony will win

  • MysticDynamite

    Posted Jul 23, 2007 8:47 am PT

    Even if Blu-Ray emerges as the dominant laser format, people are still going to buy the much cheaper but still efficient DVD.

  • celticpyro

    Posted Jul 23, 2007 8:25 am PT

    I Disagree Plumjoose, The Ps3 and 360 (the 2 current Superpowers in this war) will eventually settle their differences and merge. making the ultimate system... The Playstation360!!!.

    Itl happen, youl see .......

  • plumjoose

    Posted Jul 23, 2007 6:05 am PT

    Ok, the truth is simple. This is MY sizing up the big three. XBOX 360 has the best games, PS3 has the best hardware, and the Wii.. well... is the most innovative. Oh, I'm selling my Wii. The games.. well.. suck. The PS3 is going to win in the long haul. Sony is quality, and the games coming out are insane. And BluRay format has potential to make much bigger, and mroe detailed games than XBOX360's DVD format (an aged format). Ps3 wins BARELY by the end of this generation, with the wii and 360 tied behind it.

  • Worsley_ngw

    Posted Jul 22, 2007 11:56 pm PT

    I think that that they don't know what they are talking about right now because it is still to early in the game.

  • bradg82

    Posted Jul 21, 2007 5:20 pm PT

    I think it is funny that so many people are writing nonsense like "What do analysts know LOL. They aren't hardcore gamers LOL!" Analysts don't care about what YOU think. They care about what will make money and sell the most. I agree with them that the Wii will not only continue to outsell the other consoles, but will widen the gap in the coming months and years. The average person will never spend more than $300 on a game system. Seeing as how Microsoft and Sony are already losing money on their hardware sales, I think it will be a long time before they can lower prices to become competitive with Nintendo. On top of this, I read an article stating that it costs half to develop a Wii game as it does a PS3 game. Once the Wii gets a big enough hardware lead, third parties will switch allegiance to the Wii because it is cheaper and easier to make games for a system that has a larger user base. Microsoft is doing about how you would expect, selling decently. However, if their XBOX losses continue, I wouldn't be surprised if this is the last XBOX...MS doesn't like losses. Sony really blew it by making such an expensive console. Like it or not, Nintendo has this generation in the bag.

  • clawboy

    Posted Jul 21, 2007 1:14 pm PT

    I"m glad I own a ps3. This isn't the 100yr dash it's a marathon that Sony will win after it's all said and done. Why spend $400 on a xbox 360 that's going to overheat and die. You mail it in and microthief sends you a used xbox 360 that dies. Do you see where this is going. BREAK THE CYCLE AND STOP THE INSANITY!

  • ch-ch-chaoguy

    Posted Jul 20, 2007 11:25 am PT

    PS3 is still quite a rip off , i shall spend my hard earned 500$ elswhere...and for the bashers of nintendo I really didn't see much coming of sony this year, frankly I think nintendo did have the bragging rights this year with how much they've sold... and about the balance board, if you would have used your imagination you maybe wouldve seen that it can be used for other games as well!

  • massey123

    Posted Jul 20, 2007 3:41 am PT

    ye i agree with quincy there is just no point in having a ps3 unless ure rich and just using it as a paperweight

  • quincy0191

    Posted Jul 19, 2007 3:51 pm PT

    Oh, I'm not saying that Microsoft (I assume that's what you meant) is doing any better. There's that article detailing their $1.89 billion loss in the gaming division. But Gears of War is far better than Resistance, Sony's only newish game, and Xbox has stuff like Viva Pinata too. My point was that the PS3 wasn't lacking hard drive space, so why should Sony increase the drive space without addressing the issue of good software (of which there is an issue), and compounding the problem of price. What's the cheapest and hottest selling system? Wii (Go Nintendo!) Second cheapest and second best selling? 360. Most expensive and worst selling? PS3. The software issue and surprisingly hard drive sizes correlate as well.

  • Laxe84

    Posted Jul 19, 2007 2:48 am PT

    I'm sorry quincy0191 but how has M§ done much better with their "innovative games" and original games? Not making sequels? Does a certain Halo 3 sound vaguely familiar? Can I emphasise the "3"? I'm sorry but these reasons for bashing Killzone 2 and Sony's E3 can't really be used unless you see through the same lenses regarding Sony's competitors. Only then will you see that Sony are did just as well (if not better but that's my opinion) as the other two companies in E3.

  • quincy0191

    Posted Jul 18, 2007 4:08 pm PT

    Sony has managed to screw itself a little harder with this price cut thing. Sure, an extra 20 GB is great, but the problems plaguing sales were NOT storage space, they were games and price. And though making UTIII Sony exclusive was a great move, it and Killzone 2 are not going to propel this console to the front. Sony has shown no new, innovative games; making sequels is not the way to sell consoles, and forcing people to shell out $600 without giving them the $500 option will just depress already nonexistent console sales. 1m sold in eight months? Woooo.....

  • mazniq

    Posted Jul 18, 2007 8:51 am PT

    Better than usual, indeed.

  • keinuveye

    Posted Jul 18, 2007 7:26 am PT

    I am in the camp that they were all pretty unimpressive. I was slightly surprised by Sony who seemed to be doing better than usual.

  • thomas10soa

    Posted Jul 17, 2007 12:45 pm PT

    360

  • mixup1258

    Posted Jul 17, 2007 7:35 am PT

    Nice TTDog u shot them down for awile* hopefully* and im tallking about all the fanboys

  • rolla020980

    Posted Jul 17, 2007 6:57 am PT

    E3 blew, we all know this. The biggest news is a zapper??? Come On! I think the Wii will continue to be popular with casual gamers, and the 360 with the more adult type of gamer (yeah, Wii owners are always asking for more adult titles, and the good ones will never come). BTW, The Darkness Rules!!!

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