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Harrison warns of hardware market's expense

Harrison warns of hardware market's expense

Harrison has had experience working on both Xbox and Playstation consoles.

Microsoft Studios executive Phil Harrison has issued a warning to anyone gearing up to enter the console market.

Speaking at a press event, Harrison warned of the huge development costs and logistical challenges required to compete against the Microsoft's Xbox, Sony's Playstation and Nintendo's Wii machines.

'CES is always very interesting,' Harrison told journalists. 'But entering the hardware business is a hard thing to do. You need to have deep pockets. Hardware can be successful but it's rare to get new hardware to scale. I'm talking tens or hundreds of millions.'

He also warned that a supply chain, distribution model and manufacturing capacity are just as important as having a strong brand or software experience.

Harrison has previously worked on both the Xbox and Playstation brands and issues his warning as several new contenders are lining up their entrants to the console scene. The Ouya and the Gamestick Android consoles have hit headlines with their Kickstarter pitches and this week has seen the announcements of Nvidia's Project Shield handheld and Valve's Steam Box.

There is undeniably precedent for newcomers to the console market to be able to carve out a niche for themselves as both Sony and Microsoft entered the console market against highly established competition.

The original Playstation launched in 1994 and went head to head with the Sega Saturn and the Nintendo 64, managing to commercially outperform both machines despite Sony's relative inexperienced in console manufacture.

Microsoft first entered the console market in 2001 with the original Xbox, managing to carve out a part of the market that was largely dominated by the Playstation 2, acknowledged as the best selling console of all time.

14 Comments

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Corky42 12th January 2013, 11:41 Quote
No mention that all the new hardware coming out is leveraging an already establish software market, It sounds to me like M$ is worried about losing market share.
MrGumby 12th January 2013, 14:13 Quote
PS2 sold so well because DVD players were expensive at the time and so represented a good way of getting both a console and a dvd player for kids and adults alike.
do_it_anyway 12th January 2013, 15:33 Quote
Translation -
"Please don't make new consoles. We know ours are outdated, but we are still trying to get new money for old rope. Anything you bring out is bound to look better than our xbox360, and we aren't ready to announce the xbox 720 yet. Console gamers may start to realise that we have been screwing them over for a year or two"
AlphaAngel 12th January 2013, 16:12 Quote
Steam box fears maybe?
Gradius 12th January 2013, 20:17 Quote
PC is the only future way to the games P-E-R-I-O-D !
Kastagir 12th January 2013, 20:27 Quote
September? O.o
Corky42 13th January 2013, 02:05 Quote
Some one has been watching to much fringe :)
Malvolio 13th January 2013, 04:44 Quote
In spite of the obvious truth to the statement, I cannot help but join in with the others in stating that this is more than likely a ploy to undermine the hopes of some of these start-ups. However, realistically speaking here the next iteration of the xBox, PS and the WiiU are competing in a different market to things like the Ouya and Gamestick, in much the same way that the Wii and xBox/PS3 are viewed as targeted towards different demographics. Though I do see some overlap in the casual market and with certain smaller, "simpler" games (as provided through the different marketplaces), I very seriously doubt there will be any true competition in the AAA field, or indeed any marginally big budget type game provided from the Android riff-raff.

Following from that thought process - that of reality - I very seriously doubt there were too many nefarious intentions behind this speech. Sure, MS/Sony may be worried about a portion of their current marketplace, but by no means is the market ready to abandon high-fidelity consoles quite yet (do not misread me, PC gaming master race: compared to what is possible on even the most powerful Android device, the current crop of consoles quite easily out paces them visually, and it is this I am referring to).

Continuing on with this topic I would like to state what I really do feel could be a threat towards the current incumbent console makers, and that would be ideas such as that new Razor tablet and the idea behind the Steam box (or other mass-market SSF computers), but these would have to be really rather simplified and games more easily installed for them to take hold, otherwise demand will remain for the current model behind consoles: throw a disk at it and done.
Bazz 14th January 2013, 07:40 Quote
Quote:
Originally Posted by AlphaAngel
Steam box fears maybe?

Yes!
Griffter 14th January 2013, 09:01 Quote
so far M$ has only said... dont go into the console market cos its too difficult. and gave two examples of sony that came in and took the market, then themselves and took the market again. not really demotivating anyone with those examples... why dont they rather just say: valve, pls dont come out with the steam box..
Guinevere 14th January 2013, 13:48 Quote
Quote:
it's rare to get new hardware to scale

It's rare to get expensive new consoles to sell if you're business plan is to sell them at (or below) cost and them make your money by selling £50 games.

It's easy to get new hardware to market if you're selling low cost hardware with a profit built into the very first sale.
[-Stash-] 14th January 2013, 15:41 Quote
Quote:
Originally Posted by Malvolio
Continuing on with this topic I would like to state what I really do feel could be a threat towards the current incumbent console makers, <snip> the idea behind the Steam box (or other mass-market SSF computers), but these would have to be really rather simplified and games more easily installed for them to take hold, otherwise demand will remain for the current model behind consoles: throw a disk at it and done.

I don't know how much you use Steam, but it really can't be that much if you think it's complicated to buy, download, install and play a game on Steam. Seriously, it's much easier than actually going out and buying a physical disk (or ordering one online) and then "throwing the disk in". After you've completely the transaction on steam, you have a one click install if you choose (or not, up to you). When it's ready downloaded/installed it notifies you. That's pretty damned easy.

And if you keep Steam running (I would imagine most PC gamers do, I know I do) then you don't even have to worry about updates either – something I know plagues the PS3. I have a few friends and they often mention having to wait for updates to download and install on their new games. I'm not saying that happens all the time, but I can't think the last time this happened for me on Steam. It's just there, ready and patched. And recently, even with my configs and saved games.

Steam Box could certainly threaten next gen consoles, especially since there's no reason you can't have a high end one running those "AAA" titles far faster and more beautifully than consoles.

The main down side for Steam Box will be it's initial higher price for the hardware. But seriously, have you seen the Steam Sales? Yes, multiple ones each year. You can pick up tens of games (including AAA titles) for under £100. Over the lifetime of the device, that's a massive saving.

I welcome the next gen of consoles, means my PC games will start looking significantly better again :)
Krikkit 14th January 2013, 15:59 Quote
[QUOTE=[-Stash-]]
Quote:
Originally Posted by Malvolio
And if you keep Steam running (I would imagine most PC gamers do, I know I do) then you don't even have to worry about updates either – something I know plagues the PS3. I have a few friends and they often mention having to wait for updates to download and install on their new games. I'm not saying that happens all the time, but I can't think the last time this happened for me on Steam. It's just there, ready and patched. And recently, even with my configs and saved games.

I've experienced this too - nothing worse than seeing a big bunch of updates being needed before you can get your game on.
Malvolio 14th January 2013, 16:33 Quote
Quote:
Originally Posted by [-Stash-]
I don't know how much you use Steam, but it really can't be that much if you think it's complicated to buy, download, install and play a game on Steam. Seriously, it's much easier than actually going out and buying a physical disk (or ordering one online) and then "throwing the disk in". After you've completely the transaction on steam, you have a one click install if you choose (or not, up to you). When it's ready downloaded/installed it notifies you. That's pretty damned easy.

And if you keep Steam running (I would imagine most PC gamers do, I know I do) then you don't even have to worry about updates either – something I know plagues the PS3. I have a few friends and they often mention having to wait for updates to download and install on their new games. I'm not saying that happens all the time, but I can't think the last time this happened for me on Steam. It's just there, ready and patched. And recently, even with my configs and saved games.

Steam Box could certainly threaten next gen consoles, especially since there's no reason you can't have a high end one running those "AAA" titles far faster and more beautifully than consoles.

The main down side for Steam Box will be it's initial higher price for the hardware. But seriously, have you seen the Steam Sales? Yes, multiple ones each year. You can pick up tens of games (including AAA titles) for under £100. Over the lifetime of the device, that's a massive saving.

I welcome the next gen of consoles, means my PC games will start looking significantly better again :)

Yeah, because when I want to play a game I don't currently have installed, but have purchased, that six or seven hour wait is so totally not a mood-killer. Obviously some peoples connections are better than others, but the fact remains: low initial buy-in, simplified and streamlined "To the start screen" process, and ease of use are all very much on the current incumbent console manufacturers side. From a users standpoint that initial expensive buy-in will be a killer, no matter how cheap you make the games later on (anybody remember the absurdely priced NES cartridges that had multiple games on them, offering a "deal"? Yeah, they sold well, right? Or how about things like the Pandora?), history has proven this.

If you want to talk about updates: on the PC Steam works well enough, but what if the game I want to play is updating right then? With a console I can just choose not to update right then, opting to update at a later time or after my current gaming session, whereas I would have to wait with Steam. Plus on the PC there are many games where I have to do questionable fixes just to get it to run, which is generally caused by patching in the first place (though typically fixed in a later patch). While this is a very minor annoyance and largely superficial, you are the one arguing for it, so there you go.

This might be a bit controversial, but: Steam sales suck. Seriously, they do! Sure 50-75% might seem good (and it is), but most of the other services available have much better sales going on at the same time. GOG regularly are better priced than Steam, and are a much better site to deal with. Your point is therefore moot. But this entirely ignores the fact that I can pick up used console games for a tiny fraction of their initial price in the used market, generally much less than I can get the same game through Steam for - even during a sale.

For reference I have close to 50 games on Steam, plus more than double that which are not on Steam for the PC, plus a few hundred games spread between PS/PS2/PS3, xBox/360, so I do well know the difference between the purchase, install, and loading process of all of the above.

Steam is great because it is easier than pirating a game, but massive initial cost for questionable ease of use does little to make me think a "Steam Box" concept will fare well in a market of simple, cheap consoles with equal or better graphics capabilities (remember: the Piston - one of the only so-called "Steam Box" style concepts so far shown - is only marginally more powerful than current gen consoles, and whatever games you run on it it will not be running natively on hardware nor will they be designed specifically for it, and therefore will probably not run as efficiently).

But let us wait and see what actually comes out to market over the next year, as everything at this point is merely speculation and theory.
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