What To Expect From Nintendo, Xbox and Playstation in 2011

From an industry perspective, 2010 was a fascinating year in video games.

We saw both Microsoft and Sony successfully release motion control add-ons to existing systems – something that a few years ago, would have seemed unbelievable. (And frankly, even though we here at Techi did predict it, we were all a bit surprised how successful Kinect was).

The Xbox 360 will likely outsell the Wii in North America, while Call of Duty: Black Ops outsold most games total sales in its first month. Meanwhile, depending on sales in December, the potential of Sony’s Playstation 3 may remain just that. And though you could hardly argue that the Wii didn’t sell well, it certainly slowed down from the blistering pace it set in previous years.

So, with so much up in the air, what might we reasonably expect from the big three in 2011?

Nintendo

3DS

This will be Nintendo’s big news in 2011 – and for good reason. The Nintendo DS has been incredibly successful, with an array of games that appeals to everyone from seniors to the most hardcore of gamers.

But the 3DS isn’t a guaranteed win. Although most of the gaming press was surprised by the forthcoming titles and how good the 3D effect is, mobile gaming has changed quite a bit because of smartphones. While it’s clear that smartphones don’t offer the same quality as dedicated devices, it seems unlikely that Nintendo will be able to replicate the success of the DS Lite in the face of iPhone and Android gaming.

But it still says ‘Nintendo’ and ‘DS’ on the box, so expect lineups and millions of sales – just not as high as its predecessor.

Wii

That Nintendo will cut the price of the Wii seems like a no-brainer. Ninty have been making a profit on the Wii from day one, and it’s likely their margins are high. But though an EA exec recently suggested the “Wii would explode” at $99, that seems like too steep a cut to us. Expect the Wii to drop to $149 well before E3. At that price, Nintendo will be able to kickstart sales again while maintaining profitability.

It seems possible that ‘Wii Relax’ will make its debut, but it’s tough to see that gaining much traction.Instead, look for Nintendo to rely on a price cut and an upcoming Zelda game to resonate with its core fans while possibly leaning on its casual franchises. Wii Fit 3 anyone?

Wii 2?

Will Nintendo announce the Wii 2? That seems like the million dollar question.

Yes, the Wii’s sales have declined. But they are still strong. No, the problem for Nintendo is now Microsoft. With Kinect having had a remarkably succesful launch, Nintendo is in a bind: do they hold off Wii 2 so as to protect Wii sales, risking Microsoft gaining a stronger foothold in the casual gaming market? Or do they announce the Wii 2 at E3 (to release in 2012) to build buzz, and rely on a price cut to push Wii sales for the rest of 2011?

It seems hard to tell, but if I had to venture a guess – which I do – I’d say we won’t hear about the Wii 2. Given that it’s almost certain Wii 2 will see a very Nintendo-approach to online, it’s likely the company will take the time and announce the Wii 2 in 2012, instead relying on the 3DS handheld for momentum and growth.

Conclusion: Expect Nintendo’s focus to be on the handheld in 2011, while the Wii will likely be bolstered by a price cut.

Microsoft

Xbox 360

Microsoft has had a pretty killer 2010. Kinect launched succesfully, while Halo: Reach and the 360 version Call of Duty: Black Ops sold more than most other games combined together. On top of this, the redesign of the system spiked sales to record highs. 1.4 million systems in November just in the U.S. is no mean feat, kids.

Still, it’s worth keeping in mind that worldwide, it’s possible that Microsoft might come in second or even third in sales in 2010. Yes, Sony had a disastrous November in the US, but given that the PS3 routinely outsells the 360 elsewhere, it’s possible it could come out on top. Crazy, but true.

That means that Microsoft’s 2011 will continue to be a sustained push behind Kinect. Like Nintendo before it, Microsoft will be going after two markets: its existing fans; and people who would have never before dreamed of playing video games.

As for the first part, it’s likely that we will see Kinect integration in some ‘core’ franchises. We already know something Kinect-related is coming to Gears of War, but it seems likely that some other big-name Xbox 360 games will get some kind of Kinect integration. What is less likely, however, is a Kinect-only hardcore game.

As for the second part – stealing Nintendo’s casual territory – expect Microsoft to use similar marketing techniques, aiming for new demographics like middle-aged parents, seniors and women. Hey, when you ‘are the controller’, it’s a lot easier to convince technophobes to get on board.

And lastly, a price cut? It all depends on Sony. If the Ps3 price drops precipitously, Microsoft will have to follow suit. But if Sony holds the line and 360 sales continue as they are, expect the $199/$299/$399 split between arcade, core and Kinect models to remain.

Windows Phone 7

Perhaps at E3, expect Microsoft to announce real interactivity between Xbox games and Windows Phone 7 games. No, it’s not like you’ll be playing Halo on your phone. But updating characters in an RPG? Making decisions in a massively multiplayer game? Quite possibly.

Conclusion: Microsoft will attempt to build on their strong 2010 by focusing on Kinect, appealing to new gamers while trying to cater to the hardcore. There will be nary a whisper of an ‘Xbox 720’.

Sony

PS3

Sony’s Playstation 3 had what many would consider a surprising 2010. In 2009, the price cut and redesigned system spurred sales to new heights, and it actually outsold the 360 in a few months. It looked like it was set to leapfrog the 360.

But in 2010, Sony didn’t have the killer lineup of 2009 or the upcoming one in 2011. Instead, God of War III and Heavy Rain held the first half, while the oft-delayed Gran Turismo 5 was essentially all Sony had for exclusives in the latter half of the year. Sony’s Move motion controller got pushed back from spring, and it’s hard to tell how well it’s doing. Sales of the PS3 in November were dismal, and you can be sure that Sony dollars are behind all those rebates/coupons now available at Amazon, WalMart etc. as they try and recover in December.

So what can we expect? Well, Sony’s game lineup in 2011 is huge. Killzone, Resistance and Uncharted will all get their third installments, while LittleBigPlanet 2 will appeal to those not looking to shoot anything.

But strategically, Sony will have to swallow toward a price cut. So far, it seems that Move and 3D have done little to spike actual sales of the system, and though the games lineup is killer – to make no mention of the amazing media offerings on the PS3 (PSN Video, Netflix, Hulu Plus, Vudu) – Microsoft really seem to have the momentum. Look for the PS3 to drop to at least $249. $199, however, is unlikely given how long it’s taken Sony to wrangle PS3 costs down.

Other possibilities may include a redesign on the XMB, and a continuing emphasis on paid services like Playstation Plus to generate revenue.

As for PS4… forget about it. Sony have sunk way too much into the PS3 to think about an entirely new system in 2011. What’s more, if they’re smart, they’ll seriously reconsider their ‘technology first’ philosophy and focus on building the PS4 around online ecosystems, media and accessibility. That will take time and rethinking, so expect 2012 for even an announcement of the PS4.

PSP/2/Phone

Well, it now seems pretty certain we are not only getting a PSP-like phone from Sony Ericsson next year – that won’t be called a PSP but will have a Playstation app with exclusive games – but also a new PSP2 that everyone seems to suggest is very powerful.

How will this play? It’s incredibly hard to say.

A game-centric Android phone that ships with Gingerbread 2.3 could be successful, but will need to gain considerable critical mass to become profitable. After all, if the games are dependent on that slide-out control scheme, then only this phone will play them. To support a platform, Sony Ericsson will have sell millions of them annually. Can Sony Ericsson successfully market what amounts to a whole new game platform, particularly since it’s almost certain this phone won’t play PSP or PSP2 games (the hardware in the first is too specialized to integrate, too expensive in the second)? Maybe, but it seems unlikely. Priced right, however, and it could do quite well. At $99 or $149 with a contract, and it could do well. Don’t hold your breath for that price, though.

As for PSP2, it’s even trickier. What is the market potential for a dedicated gaming device now? It’s true that there are millions of hardcore gamers who are not always satisfied with throwing birds at pigs. At the same time, the world has changed. Not everyone is willing to carry around more than one device. So in part, how well the PSP2 does will be dependent not only on games, but what else it will do. If it has an Android browser, also plays the games available on the PSP-like phone and has a competent music and video player, with store integration… then maybe it will have a better time of things than the PSP, which itself sold very well at first and then sort of dropped off the face of the earth. Of course, that all depends on price. Given that people are saying it’s very powerful, it could also be quite expensive, and if it comes in at a price $350, it will fall flat.

Conclusion: Expect Sony to rely on a price cut for PS3 and maybe even Move to kickstart sales, before coming through with a killer holiday 2011 line-up. In the mobile space, expect both their Android phone and PSP2 to receive good, but not exceptional reactions, as consumers figure out how each device might fit into their lives.

Predictions: This is bold, but in terms of sheer sales and mindshare, Microsoft will dominate 2011. Nintendo will be very successful with the 3DS but the Wii will lose ground to Kinect. Meanwhile, Sony will teeter on the edge for the first half of the year but gain serious momentum in the second half (thought not enough to challenge MS).