Mind the Generation Gap

David Gosen, managing director of Nintendo Europe, has come under fire after he spoke at the ELSPA Games Summit in London two days ago. His speech put many noses out of joint, with its attacks on Microsoft, European retailers and the gaming press. I tend to agree with most of what he had to say.

He accused the gaming media of being overly pre-occupied with next generation hardware and software, to the exclusion the current generation.
"For every game magazine editor bored with current products, there are hundreds of thousands of gamers around the world just discovering them."
He slammed European retailers for bundling huge numbers of free games with consoles.
"If we give consumers ten games in a bundle, of which eight are sure to disappoint, what have we actually achieved?" he asked. "A disaffected consumer."

The key critical thrust of his speech was aimed at the "self-fulfilling prophecy" of generational hardware change in the industry, where "five to six years is right, and come what may, we're going to stick to it". He argued that this is a trend that the industry must break out of in future.

He claimed that for Microsoft, games profitability "is not their key motivation" in aiming to launch the successor to XBox during 2005, after only a four year lifespan for their first console.
"In every cycle, some manufacturer not profiting from the current cycle is eager to kick-start the next one."

Microsoft's Entertainment division lost around a billion dollars last financial year. That was precisely their business model: establish a brand, create a user-base and take a huge loss. Microsoft can easily afford to pull stunts like this. Nintendo can't. Microsoft's brute force approach has certainly proven successful in crushing competitors. It's easy to dismiss Gosen's comments as a case of sour grapes, with Nintendo having lost a huge market share in this generation, but I believe his concerns about accelerated generational change are well founded.

Microsoft are hoping to gain an advantage in the next generation by being first to the market. Many people attribute the PS2's success in this generation to its headstart on the Cube and XBox. This is a simplistic and flawed view - Sega's Dreamcast was actually the first console to the market in this cycle and look where it ended up (despite being a great console). 3DO, Atari Jaguar and Sega Saturn also spring to mind as early starters that died young. Pushing the jump to the next generation may or may not pay off for Microsoft, but its a move that will hurt the industry as a whole.

It puts pressure on Sony and Nintendo to get their next consoles to market earlier than originally planned (shortening development time), and forces games developers back to square one, abandoning their steady progression toward getting the most out of current generation hardware.

In the PC world, the continual hardware upgrade path, where developers never get to tap the potential of the current generation hardware, has proved to be a successful business model for the Wintel group (Microsoft and Intel), but its a no-win situation for the consumer. If the console world falls victim to the same rapid obsolesence, gamers will lose out. As a gamer, I certainly don't appreciate the mountains of first-generation drivel that games developers pump out at the start of a new cycle. It's necessary I know, but I much prefer times like now, when developers are getting very comfortable with the hardware and are starting to get the best out of it.

Look at the original Playstation. It survived through several PC hardware lifetimes, and prospered through software development. If you compare a first-generation PSX title (like Tekken 1 or Ridge Racer) to a late title (like Tekken 3 or R4) it's difficult to believe they're running on the same hardware. The benefits of fully matured software development are immense.


Ridge Racer and Ridge Racer Type 4 (R4), both on PSX

I can only hope that Microsoft's gambit fails. Continued losses in the next generation will not be sustainable, even for them. If Sony and Nintendo have the fortitude to stick to their timelines and do not bring their forthcoming consoles to the table half-baked, the gaming industry will be much better served.