When the Xbox 360 launched in November of 2005, the console wars were largely viewed as a two-horse race. Nintendo’s Wii was an afterthought in the minds of most industry analysts and executives — a belief that would be proven correct in terms of relevance among the traditional gamer audience, but so very wrong on the sales front, as it marched on to over 95 million units sold worldwide as of March. Rather, both popular and informed opinion said the battle would be fought between Sony and Microsoft.
Sony had spent the past 10 years decimating Nintendo and Sega’s positions as dominant forces in the industry by appealing to an older consumer and making the PlayStation 2 the best-selling home console of all time with more than 150 million consoles sold as of the end of last year. After having replaced the name “Nintendo” with “PlayStation” as a synonym for video games, the Tokyo, Japan-based electronics empire was feeling as invincible as Superman. With Nintendo having done its damnedest to torpedo its relationships with third-party developers and the software behemoth in Washington looking like the proverbial babe in the woods when it came the console biz, Sony could see no kryptonite in sight. Of course, few outsiders did either at the time.
Had it not allowed the pride that success brought to convince it that sinking so much of its PS and PS2 profits into the foolhardy enterprise of out-muscling the Xbox 360 with the PlayStation 3, however, it might have foreseen that it was on a path to learn the same hard and humbling lesson it had itself taught Nintendo. Instead, it produced an expensively priced machine that arrived a year late to the party and quickly built a reputation, fair or not, of being notoriously difficult to develop for. Geekwire reports that when he spoke to the Northwest Entrepreneur Network last week, Robbie Bach, former president of Microsoft’s Entertainment & Devices Division, highlighted how Sony’s miscalculations and mismanaged generational shift opened the door for the 360 to become the hugely profitable success that it is today.
“When you’re doing a startup, you need friends. It’s just the way life works,” Bach said. “It turned out we were able to convince retailers and publishers like Activision, Electronic Arts and others, that it was a good thing for Microsoft to be successful, because if we were not successful, the only game in town was Sony. Being dependent on somebody else was bad for them, and so they supported us disproportionately to what they should have, mathematically.”
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