Gaming Business

The Gaming market is set for very interesting times. All three consoles on the market (from Nintendo, Sony and Microsoft) are now priced at USD 199, after PlayStation 2 and Xbox prices were slashed by USD 100 last week. Hardware (the console) is now becoming a commodity. Which means software makers are going to get increasingly important and the differentiators. Unlike the computer industry, software is not yet interoperable. So, for the game makers, the consoles are the razors (they are willing to lose money selling them) while the software sales (their own or royalties from others) are the blades. Expect a lot of innovation in this “emerging market”.

Some recent stories:

  • on the price cuts
  • Microsoft’s USD 1 billion bet on building out an online games network (NY Times)
  • WSJ on Philip Rosedale of Linden Labs, who is creating an open-ended alternative to online games: “Mr. Rosedale envisions a virtual space and society that evolve every day through the creativity of their users. People are expected to roam through a three-dimensional landscape in cartoon-style bodies, design homes and artwork, chat with other users and customize their clothes and appearances. Above all, they are expected to invent the games, social relationships and mock financial enterprises that will shape what is tentatively called Linden World.”

    What interests me about the Gaming business is its similarity to what we want to with the Thin Client-Thick Server concept. Need to get enough of the TC-TS combos out there to ensure there is a lot of developer interest to build applications for SMEs.

    Gaming is also the one market where Microsoft is the underdog: Sony leads it by 10:1 in the console installed base. Would be very interesting to see how Microsoft builds out its strategies — there is a lot to learn from them. Writes the NYT on what they are trying:

    On Monday, Microsoft will announce Mr. Allard’s next big gamble: an ambitious billion-dollar-plus investment in an online game service to be called Xbox Live. Microsoft hopes to create what it describes as the equivalent of an online Disneyland, globally accessible over the Internet, where gamers who subscribe can find partners for dozens of different adventure, racing and sports games.

  • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.