Hello,

We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

A View from Brad King

Nintendo Announces Console Launch, Leapfrogging Sony

Nintendo will begin selling a lower-cost next-generation game console in December, which could make a dent in Sony’s armor.

  • September 14, 2006

When the last generation of game consoles hit the market, Sony’s Playstation 2 quickly became the talk of the game world. The company seemingly hit on all the right cylinders: the right game developers made exclusives, the graphics were top notch (even if they were a step below the Xbox), and the controllers were easy to use.

This time, the going is not so easy.

On Thursday, Nintendo announced that the Wii, its next-generation game console, would hit the market in December, retailing for a paltry $250, or $150 less than Microsoft’s Xbox 360.

The price discrepancy is due to Nintendo’s insistence that consoles primarily be game machines, and not entertainment systems for the living room – in stark contrast to Microsoft and Sony, which both have packed their systems with DVD and CD playback capabilities, plus online networks.

Nintendo’s announcement means that Sony will be the last console maker without a console in all three major markets (Asia, Europe, and the U.S.), which could hurt its standing in the marketplace.

The console makers sell their hardware as a loss leader, which means every time someone buys a console (Xbox 360, Wii, Playstation 3), the manufacturer loses money. The real money comes from software sales, which means the company with the greatest installation base makes the most money (in very simple terms).

Sony has lead this race for the last decade. Now, delays in production of the PS3 may allow both Microsoft and Nintendo to leapfrog it, drastically reducing Sony’s clout.

Want to go ad free? No ad blockers needed.

Become an Insider
Already an Insider? Log in.

Uh oh–you've read all of your free articles for this month.

Insider Premium
$179.95/yr US PRICE

Want more award-winning journalism? Subscribe to Insider Online Only.
  • Insider Online Only {! insider.prices.online !}*

    {! insider.display.menuOptionsLabel !}

    Unlimited online access including articles and video, plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    What's Included

    Unlimited 24/7 access to MIT Technology Review’s website

    The Download: our daily newsletter of what's important in technology and innovation

/
You've read all of your free articles this month. This is your last free article this month. You've read of free articles this month. or  for unlimited online access.