Wii and PS3 launches a study in contrasts

The games industry moves pretty fast, and there's a tendency for all involved to look constantly to what's next without so much worrying about what came before. That said, even an industry so entrenched in the now can learn from its past. So to refresh our collective memory and perhaps offer some perspective on our field's history, GamesIndustry.biz runs this monthly feature highlighting happenings in gaming from exactly a decade ago.

PS3: Pricey for Everyone

Who doesn't love new consoles? OK, PC gamers, sure, but who else? I suppose developers probably don't enjoy putting together launch games on hardware that's still being built underneath them. And publishers can't relish the thought of paying ramped up development costs to access a non-existent installed base. And come to think of it, hardware manufacturers in most cases don't see the sunk costs of a new system recouped until quite some time after launch. And it's not like the console gamers are sitting out there bemoaning hundreds of extra bucks in their pockets that could be spent on more plastic boxes, spare controllers, and launch-quality games.

OK, all those people aside, everyone loves new consoles, and November of 2006 saw the launches of two console gaming giants. First, there were the Japanese and North American launches of the PlayStation 3, Sony's anticipated follow-up to the absurdly successful PlayStation 2. Right after that was the world premiere of the Wii, which would debut in North America before rolling out in Europe and Japan the following month. Conveniently enough for the purpose of this column, the pair of launches were almost polar opposites.

In hindsight, it probably should have been a red flag when the PS3 marketing campaign eschewed gameplay footage to instead show people creepy baby dolls

The PlayStation 3's run up to launch was a vortex of bad headlines, much of it surrounding the console's price ($499 for the feature-stripped 20GB version, $599 for the 60GB standard edition). The feedback to pricing was so negative that Sony actually cut the price of the PS3 in Japan before the system even launched. When asked if the US market would see a similar cut, then-SCEA head Kaz Hirai said he was "comfortable" with the pricing. Analysts and consumers were considerably less comfortable with the pricing.

That said, Sony had essentially painted itself into a corner with the PS3's design. Between the system's highly touted Cell processor and its inclusion of a Blu-ray drive before that standard had established itself as the future ahead of HD-DVD, it was clear the PS3 wouldn't come cheap. But according to an iSuppli teardown of the launch systems, calling it "not cheap" was understating the problem. As high as the US retail price of the PS3 was, Sony was still losing up to $300 on every system.

"There is nothing cheap about the PlayStation 3 design," iSuppli senior analyst Andrew Rassweiler said. "This is not an adapted PC design. Even beyond the major chips in the PlayStation 3, the other components seem to also be expensive and somewhat exotic."

By comparison, Nintendo would be selling the Wii at a profit from day one, and that same month iSuppli calculated that Xbox 360 manufacturing costs had fallen below the retail price of the system after less than a year on shelves.

But good software can still drive hardware, right? Possibly, but the PS3 wouldn't be a good example of that. Sony announced its PS3 launch lineup in October, and it was looking thin even then. On the first-party front, there was Resistance: Fall of Man, NBA 07 and Genji: Days of the Blade. We could even be kind and count Sony Online Entertainment's Untold Legends: Dark Kingdom. The third-party front was a bit thin and port-heavy to start with, but got downright stark just one week before launch when The Elder Scrolls: Oblivion and Sonic the Hedgehog were delayed (although in hindsight, the Sonic delay could be seen as a kindness). In hindsight, it probably should have been a red flag when the PS3 marketing campaign eschewed gameplay footage to instead show people creepy baby dolls.

It all added up to an underwhelming debut when the PS3 launched first in Japan. With a disproportionately high number of speculators to actual customers in the market, the PS3--which did not come bundled with a game--actually averaged less than one game sold per console at launch.

Nearly everything that could go wrong for Sony in the lead-up to the PS3's launch did, so it's no small testament to the company that the system went on to sell over 80 million systems. That may not be as impressive as its predecessors, but it's still an incredible achievement for a company and a system that stumbled out of the gates.

As GamesIndustry.biz columnist Rob Fahey said quite accurately the day before the system launched in Japan, "It's been a long, tortuous road - but even the console's most ardent critics should find it in themselves to raise a glass to Sony and the PS3 this Saturday. Competition will benefit everyone, after all - and regardless of your views on the different platforms, there's no question that the next five years will be one of the most competitive, and hence the most creative, in the history of the interactive medium.

Wii takes off

On the other end of the spectrum, we have the Wii. At $250, it was the least expensive of the consoles on the market at launch, and as mentioned, profitable on every unit sold from day one. Between The Legend of Zelda: Twilight Princess, Wii Sports, ExciteTruck, and the controller-bundled minigame collection Wii Play, it had a strong first-party launch lineup bolstered by a deep (if not particularly thrilling) assortment of third-party offerings and a Virtual Console library of retro Genesis, NES, Super NES, and TurboGrafx-16 titles well worth exploring.

While Sony was leaning hard on the supposedly future-proofed tech and unmatched computing power of the PS3 for its marketing message, Nintendo was going in the opposite direction.

"Originally, I wanted a machine that would cost $100," Nintendo's Shigeru Miyamoto said of the machine. "My idea was to spend nothing on the console technology so all the money could be spent on improving the interface and software."

"Because of demand, we're urging shoppers not to get complacent. The level of demand we're seeing goes beyond the ordinary"

Reggie Fils-Aime, before the Wii launch

He acknowledged there was some resistance to his vision internally as developers pushed for high-definition graphics, but Miyamoto considered that unnecessary for the Wii's ultimate objective, saying, "Our goal was to come up with a machine that moms would want - easy to use, quick to start up, not a huge energy drain, and quiet while it was running."

Moms weren't the only ones who wanted the Wii. The Wii would sell out at launch, and remain that way throughout the 2006 holiday season. And the 2007 holiday season. At one point, Nintendo even had concerns about meeting demand in the 2008 holiday season. Nintendo of America president Reggie Fils-Aime even tried to warn people before launch, saying, "Because of demand, we're urging shoppers not to get complacent. The level of demand we're seeing goes beyond the ordinary."

The hype for the Wii was so strong and Nintendo did so much right in the run up to launch that not even a smattering of ill-advised executive quotes could dent the enthusiasm for it. Whether it was Fils-Aime insisting that Nintendo isn't arrogant (unlike Sony and Microsoft), or Canadian marketing director Pierre-Paul Trepanier saying Sony and Microsoft's use of Blu-ray and HD-DVD were "unfair" to gamers, any missteps were washed away in the overwhelming tide of Wii launch buzz.

The Lesson

Perhaps the most interesting part of this a decade down the line is how the PS3's failure out of the gates and the Wii's incredible success set both Sony and Nintendo up for a tremendous reversal of fortune.

As much as the Wii boosted Nintendo's bottom line, one could argue it hurt the company in the long run. Its overwhelming success validated Nintendo's design philosophy at the time, which was to pursue new audiences with underpowered but novel hardware that differentiated it from the competition. Nintendo never made a compelling case for why we needed two screens on a portable device, but the system thrived regardless. Wii Sports made a better argument for motion controls, but few developers were able to use them for anything more interesting than a minigame collection.

Sometimes you have to hit rock bottom before you're able to fundamentally reconsider your approach

The lesson Nintendo took from the success of these products was that a bit of hardware novelty was a vital component in expanding beyond the traditional gamer audience. It didn't really matter if the novelty didn't change the experience significantly, or if it had limited substantial applications. It's not an uncommon philosophy in tech, and you can probably see bits of it any time an exec at a press briefing tells the audience, "We can't wait to see what developers do with it." The problem is that more often than not, what they actually mean is, "This seems cool but we don't know what to do with it so we're hoping someone else solves that problem for us." You can see that philosophy reflected in the Wii Balance Board, the never-released Vitality Sensor, the superfluous glasses-free gimmick of the 3DS, and the second-screen shrug of the Wii U, just as you can trace the downward trajectory of the company's hardware business through those products.

On the flip side, Sony was humbled by its experience with the PlayStation 3. The much-vaunted Cell processor never really paid off, as third-party titles generally appeared on both Microsoft and Sony's systems, with the PS3 version frequently facing performance issues. When it came time for the PlayStation 4, the company's approach had changed. The system was designed to be easier for developers to work with and port to. Sony put an emphasis on developer outreach, bringing indies to the platform in droves and lowering the barriers to entry into its ecosystem. The company was more accommodating to players as well. Where Microsoft insisted on an always-on console and tying a physical game purchase to the system, Sony scored major points with fans by simply saying used games would work as they always had. Where Microsoft had assumed the role of arrogant and out-of-touch anti-consumer monolith, Sony cannily took advantage of each misstep as an opportunity to emphasize that PS4 was about the games, that it was for the players, that it was a developer-friendly system.

Granted, the good vibes around the PS4 have dimmed considerably since launch, but Sony is still clearly leading the pack this console generation, and I don't think it would have happened if the PS3 launch hadn't been such a debacle. Sometimes you have to hit rock bottom before you're able to fundamentally reconsider your approach. I think Sony hit that point with the PS3 launch last generation, and I hope Nintendo did the same with the Wii U. The good news is Sony showed how quickly a company can rebound from that, and if the Switch has really reflects a new philosophy from Nintendo, perhaps it can follow suit.

Remember, you can find plenty more historical perspective on how far we have come as in an industry in the last decade (or not come, as the case may be) on the @GIbiz10YearsAgo Twitter account.