Three consoles launched into the same eight weeks and the industry has spent the whole year describing it as a war between them. I think that framing is wrong, because two of these machines are not really competing with each other at all.
The Xbox 360 and the PlayStation 3 are fighting over the same person. That customer is somewhere between eighteen and thirty-five, owns or wants a high definition television, cares about frame rates, and will happily explain to you why one machine’s architecture is more elegant than the other’s. Both consoles are built for him. Both cost what a serious hobby costs.
The Wii is not aimed at him at all. It is aimed at his mother, his girlfriend who has never owned a console, and the family down the road who thought the whole category was for children until somebody handed them a tennis racket at a party. Nintendo is not trying to take share off Sony. Nintendo is trying to grow the number of households that own any console at all, which is a completely different business and, if it works, a much larger one.
Where the year actually got decided was Sony’s execution, and it was poor in a way I did not expect from that company. The price is aggressive to the point of being a statement. Supply is short. Europe does not get a machine until March, which means the biggest brand in console gaming has voluntarily skipped Christmas across an entire continent. Any one of those is survivable. Together they have handed Microsoft a clean run at a market Sony has owned since 1995.
Microsoft, to be fair, used the opening. A year of head start turned into a library that can stand on its own, an online service that works, and a machine people already have friends on. The reliability stories are getting louder and I do not think that problem is finished, but a broken console you can replace beats a console you cannot buy.
The thing genuinely nobody is writing about is the handheld market, where the actual slaughter is happening. The DS is outselling the PSP by a margin that would be the biggest story of the year if it were happening on television screens instead of in coat pockets. Sony built the more impressive machine, obviously. Better screen, proper 3D, media playback, a genuine technical achievement. Nintendo built a device with two screens and a stylus and filled it with games that do not look like anything else, and it is winning so comprehensively that the comparison has stopped being interesting.
I keep coming back to that, because the same pattern is now running on the living room television and almost everyone is refusing to see it. Sony’s argument in both categories is that its hardware is superior, and in both categories it is correct. Nintendo’s argument is that the hardware is not the product. On the handheld side that argument has already won.
What makes 2006 hard to call is that all three of these companies can plausibly declare victory next December, and none of them would be lying. Microsoft will have the largest installed base and the best attach rate. Sony will have shipped its first-party studios and started the slow grind it has won twice before. Nintendo will either have made the category enormously bigger or have sold a great many machines that nobody plays after February.
My position, for whatever it turns out to be worth: Microsoft wins the next twelve months, Nintendo wins the units, and Sony spends the generation recovering from a launch it did not need to run this way. The bit I am least confident about is Nintendo, and it is also the bit I find most interesting, which is usually a sign that it is where the real story is.