Why the Xbox 360 will win the console war

Lately, there has been a considerable amount of discussion on which console will win this generation's war. Will it be the Wii with its established base and strong sales? Will it be the Xbox 360 with its steady growth? Or will it be the Playstation 3 with its strong sales over the past few months?

The Xbox 360 will take the day

(Credit: CNET News.com)

If you ask me, it'll be the Xbox 360.

Now I know what you're thinking -- "how?" The answer is actually quite simple: the Wii is not nearly as strong as some want to believe and Sony's strong growth is the result of a lower hardware price, which is allowing it to catch up to the pack.

Of course, Sony's Kaz Hirai doesn't agree with that sentiment. According to the company's gaming chief, Sony will follow a "ten-year cycle" with the PS3 that should propel it to the top spot in the industry once it's all said and done.

And while his desire to do that isn't quite rooted in reality, I guess you can't blame a guy for trying.

According to Hirai, Sony is prepared to battle it out in a "marathon" race against Nintendo and Microsoft and he believes his platform has what it takes to win the day.

"I am very confident that after the 10-year life-cycle we will have the installed base that we are looking for and that is obviously to be in the leadership position," he said in an interview.

Sadly, Hirai totally missed it on this one.

According to the latest sales figures, Sony has sold roughly 13 million Playstation 3 units worldwide, while Nintendo has sold 25 million Wiis and Microsoft has sold 19 million Xbox 360s. And while Sony won't cite those figures, it chooses instead to mention "velocity" -- the rate at which its sales are increasing.

There's no debating the fact that Sony sales are stronger and although the Wii still reigns supreme, it's viability is running low and the chances of it maintaining such a lead in the industry is quite slim. All the while, the Xbox 360 is the forgotten player in this market that's still enjoying hearty sales without any major price drop -- a contributing factor to Sony's gain -- in sight.

With that in mind, you're probably wondering why I think the Xbox 360 will take the day when it's all said and done. Suffice it to say that as it stands, Microsoft has the best strategy in place to appeal to the biggest group of gamers and create a greater value proposition for its customers.

Here's why:

Games, games, games

I don't know how many times I've said it on these hallowed pages, but I need to say it again -- games mean everything to hardware sales once the first year in the new console generation is over. By then, everyone who wanted the new hardware has it and everyone else who doesn't want to spend money on something that doesn't entice them, waits for something big.

In previous generations, this is where Sony performed extremely well. With exclusives from Square-Enix and even Rockstar Games, the company was able to enjoy huge upswings in hardware sales prior to and after, the release of major titles like Final Fantasy and Grand Theft Auto. On the other hand, Microsoft and Nintendo were forced to play catch-up with first-party titles and other semi-major hits.

But today, that game has changed. Nintendo is still clinging to the value of its first-party titles and Sony has lost a slew of exclusives, including GTA IV. And although the company still has Killzone 2, Microsoft had Halo 3. Although Sony has Metal Gear Solid 4, Gran Turismo 5, and Little Big Planet, the Xbox 360 lineup of games overall is much stronger.

Of course, you don't need to take my word for it. Kaz Hirai, in a severe understatement, admitted his company has a problem: "There was also some concern in the media and from customers about the lack of titles available at launch."

The way I see it, those problems are still present.

But let's not forget that Nintendo is not innocent in all this. If it weren't for first-party titles, I'm not convinced that the Wii would be nearly as popular as it is today. And now that almost every major Nintendo title is already available, how much longer should we expect the company to enjoy such strong sales?

The online component

There's no debating the fact that in the video game industry, Microsoft reigns supreme in the online space. Over the past few years, Microsoft has single-handedly create an online experience that not only manhandles Nintendo and Sony's attempt at online entertainment, but has millions wanting more. Beyond that, it's an important selling point when customers need to decide between the PS3 or Xbox 360 versions of a title. Let's face it -- wouldn't you rather play GTA IV on Xbox Live?

Sony's online experience is junky, at best. And although it continues to promise more in that arena, it still doesn't seem nearly as focused as it should be. According to Hirai, Blu-ray discs are still the "best and most efficient way to deliver content" and "when you consider that content that plays on PlayStation 3 can go as high as 50GB it's going to be very difficult to deliver 50GB to consumers in some parts of the world in a timely fashion."

In other words, Sony's online experience will continue to stink.

On the other hand, Nintendo is working diligently to look like a company that cares about online gaming, but most of the integration on that front has been mediocre. To make matters worse, the company's online roadmap is practically forgotten and it seems like it's more focused on "innovation in gaming" than anything else. That's a mistake.

Surely, Sony and Nintendo are downplaying the significance of online gaming, but how can they justify that mentality? According to "Online Gaming 2008" from NPD, 42 percent of Americans play games online and more than half of worldwide gamers play online. Among console gamers, more than 50 percent use the Xbox 360 to get their fix. But as NPD notes, "there is still a large, untapped market for gaming in general and online gaming in particular."

Are Nintendo and Sony really willing to forego that opportunity and surrender to Microsoft? It certainly looks that way.

Although it's currently sitting in the second spot, Microsoft's Xbox 360 will come out the winner of this generation as long as it maintains its strong relationship with developers and continues its dominance in the online space. If nothing else, Sony has shown that it will continue to cling to its outdated business model hoping for a redux of the 1990s, while Nintendo will try to stay true to its innovation plan.

That said, I just don't think either of those strategies can last much longer and both companies will be forced to adapt. When that happens, they will try to play Microsoft's game and fail miserably.

Regardless of what's going on right now, Microsoft is in the best position to win this generation's console war. Now we just need to sit back and wait for it to happen.