The video game industry is a hotly contested space that's currently being dominated by three major companies: Sony, Microsoft, and Nintendo. And although companies like Sega and others have tried to solidify their brands in the console space, they've failed in the face of those three giants.
But just because the past is littered with companies that have failed miserably at trying to capture a place in the world of hardware, does that mean that no company ever will do it again? Microsoft is a late entrant into the space and Sony came on the scene in a big way when columns were being written about the same basic premise: companies can't break into the console war.
Sorry, but I just don't buy the logic.
That said, I don't think any company can break into the console space. In fact, I would say that only one company can do it. Not because it has worked in the video game business for such a long time or that it's uniquely positioned to break in. No, the real reason why I believe this company could make a splash in the video game business (and why it possibly will) is because it commands the kind of hype and respect that no other company in the space does.
If you ask me, Apple could (and should) release a video game console. And not just because it'll be a success, but because it's the only company that could make a dent in the market.
The App Store has taught us a few things about Apple. It has taught us that the company is ready and willing to work with developers trying to create sound businesses and it's taught us that Apple can create a device, albeit a bit small, that can provide users with a powerful gaming experience.
But because of the App Store, everyone is looking in the wrong direction. Everyone believes that the App Store is how Apple will break into the gaming business and make the iPhone a compelling gaming platform.
I think that argument is pure rubbish.
In reality, the App Store is the first step in Apple's would-be plan to dominate the video game market by providing a service that can handle the console business and capture a significant portion of the market that it's trying so hard to be a part of: home entertainment.
Rest assured that Apple is a hardware company. If Apple was really concerned about software, it would have licensed Mac OS X again and it wouldn't have spent so much time trying to find unique ways of bringing Apple products to people in different ways. There would have been no iPhone, no iPod, and Macs may have been irrelevant.
Suffice it to say that Apple is inexorably tied to hardware.
But Apple's vision for the future is also tied to its obsession with controlling all the facets of your life. It already controls the music enjoyment part of your life and has taken a significant slice of the communication pie. It has Macs for those who want to be productive and an Apple TV for those who want to extend the capability of their home entertainment rig. But what about gaming?
The gaming market is one of the largest and most important industries in technology. But it's also one of the few key markets where Apple doesn't have a presence. Beyond that, it's one of the few places in the technology space that may actually be receptive to an Apple device.
One of the key success factors in the console market is playing well with developers. And although, its work with video game developers on the App Store is the ideal entree into coaxing them to support Apple's game console.
Even better, Apple has the infrastructure in place through iTunes to create a real value proposition for those who want to extend the capability of their console beyond gaming. Also, the company has the cash--about $20 billion--to not only invest in the best components on the market, but in an online gaming experience that could rival Xbox Live.
That cash could also be put to good use by acquiring major developers (did someone say Take-Two?) that could go from third-party powerhouse to Apple's first-party publisher.
And all the while, Apple can solidify its position in the space as the de facto "cool company."
Apple has a number of things going for it: it's successful, people love the brand, and people will buy its products regardless of their usability. And although the Apple TV could have performed a bit better, a video game console is the kind of product that would make Apple zealots and hardcore gamers flock.
That's not to say that it'll be easy for Apple to solidify itself in the gaming business; it's a tough industry, after all. But Apple's track record of working with game developers, its unprecedented control over the general population, its cash on-hand, and its ability to understand what people want make it the ideal company to break into the video game industry and supplant the major players.
Will it happen? Who knows. But if you ask me, it should. And soon.