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Console Wars: Why Do Companies Care So Much?

The concept of companies competing for customers isn’t anything uncommon, but you’d be hard pressed to find a more direct competition with such vocal customers as the videogame console wars. As far back as the coming of the Sega Genesis in 1989, gaming companies have done all they could to get customers to choose their console instead of their competitors. The Genesis and the Nintendo Entertainment System, or NES, began this trend with Sega’s legendary advertising phrase “Sega do what Nintendont” claiming their 16-bit processor as a selling point. The tradition continues with the past console war between the PS4 and the Xbox One. As the article shows, the two companies go at lengths to get the upper hand through lower price points, exclusive titles, timed-exclusive content (which the article focuses on), and giving up some console functionality that would have benefited the company, and developers greatly. Namely, the Xbox One just about shot itself in the foot even before launch by sticking to its guns on not allowing the functionality to play used games, which would allow for a new family game sharing functionality and more game revenue going to developers that only get paid for copies sold and not resold used copies. As a result, they gave in and doubled back on their decision.

Which brings us to the question; why would these companies go at length to give up beneficial functionality as well as mounds of money on price cuts and exclusive deals? Well to answer that question we need to apply what we know about networks and understand that, with multiplayer becoming more and more prevalent, having friends with the same console is very preferable. These companies know that getting a lot of customers will make their online games and message boards the bustling communities every developer desires. As other players in these context add to the game experience, players essentially make for free content. And, as we’ve seen, as a community on one console grows, they will pull more and more people as they find their friends bought that console. This is something Nintendo has down to a very steady science. By lowering its specs allowing it to sell consoles cheap along with making their own heavily anticipated and loved series, they can get a quick community by getting young players. So when other demographics buy the console for the inevitable Zelda title or Smash Bros instalment, there’s already plenty of consoles out there, and with an audience with the time to play videogames all day no less. This draws more and more people into getting their console.

http://www.forbes.com/sites/insertcoin/2015/07/24/the-ps4xbox-one-console-war-has-taken-a-decidedly-stupid-turn/

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