Wednesday, June 15, 2005

Asking for ketchup without knowing what´s for dinner.

I´m very disappointed with how the exciting banter about the Revolution´s secret seems to have largely turned into a debate about why Nintendo is not going to jump on the high-definition bandwagon. My first thought about that is: You don´t know just what revolutionary feature that console will bring to the market. It might be something that would make us go ´wow´ for reasons other than pure resolution. In fact, I am sure it will do just that. That is what Nintendo has promised, anyway. If the Rev really will make use of some form of AR or Haptics, who´s going to demand HD then? Noone. So, firstly, wait until you know what´s for dinner before you ask for ketchup.

Secondly, let´s imagine we are Nintendo. It´s down to a simple economic principle: The question for any console manufacturer considering HD relates only to the installed hardware base. If everyone had it, everyone would cater for it. But not everyone has got an HD set, so you ask yourself: To what extent has HD penetrated the market already? Further, to what extent will it grow within the average life cycle of the next generation consoles (say, about four years)?

Looking at the US, about six million people have HD-ready equipment in their homes right now. That is very little compared to the entire population and is not sufficient for us to consider supporting it. Near the end of the next-gen life cycle, it could be the majority of households, though. That would support the argument to include HD. But there is a little contention here: it could, it is expected to, it will according to analysts... This is where I may even compare HD technology to something like the Blu-Ray standard, see below. HD may not have a direct competitor, but there are a variety of standards and, furthermore, there is always the chance that a new technology will just not catch on. Often, even, it is the high quality option that becomes unpopular with the users.

VHS won against the far superior Video 2000 and Betamax. The Nintendo Gameboy won against the far superior GameGear and Lynx. And why is that? They simply turned out cheaper. Bottom line. And, as I said, even without any direct competition, quality might just not catch on. Remember the Laserdisc? Where did that one go? Didn´t it have the same industry support to begin with that HD enjoys now? So, to put it plainly: Without a sufficient user base at this moment, it may not make economical sense to include HD technology in a next-gen console. It all depends on how that technology sells in the next four years. And we don´t know. The next four years could prove Microsoft and Sony right. They could prove Nintendo right. But we´ll just have to wait and see. So, a lot of people out there should stop acting as if they know already.


Anonymous said...

And how many people have HD tvs in their bedrooms? (the place where most people age 5-17 play games)It'll be years and years until HD becomes so common that people have HD in every room, for now, it'll be staying in the living room

Falafelkid said...

Hey, I didn´t think of that. Anyway, the whole discussion seems so futile when you´re from Europe and a) HD is years away from impacting on our market significantly and b) you have become quite sceptical of the industry analysts predicting something "will be the next big thing in only a few months..." I think a few people complaining to Nintendo today should go down to their cellars and dust off that old Sega GameGear, the Betamax player and that Laserdisc collection. if they truly think consumers will naturally go for better quality and accept a higher price, they all must own one of each. ;P

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