Prophecy has been brought to us! First, the original
scripture has been found proclaiming the future of the Xbox!
And the prophecies have come true!
And now, the GameCube Prophecy! So it is written....
(Pretty much final version. Less hostile, more facts)
So, GameCube. It's here. It's pretty. $98 million in total
Sunday and before. That includes everything (systems, games,
that sold on Sunday, that shipped from online retailers on
customers for delivery on Monday, and units sold to rental
Blockbuster who received some 30,000 units last week. What the
happened? Contrary to popular mythology, that is not really
The Dreamcast had a better launch at $150 million in the
Nintendo 64, about the same. PS2, around $300 million. Wow,
the GameCube did $98 million. That's before you factor in that
the GameCube had more units available than both, and was
launching at the busiest shopping period of the year.
Nintendo announced that there were to be 700,000 Gamecube's
available at launch for anyone who wanted one. But supply far
exceeded demand for this launch. Less than a 50% sell through
on the opening salvo. Good news if you want a GameCube as you
get them pretty much anywhere, not so good news when you're
trying to release a system and not have it killed by the PS2
as this industry is momentum based.
Then you factor in that the GameCube launch was the result of
2 years of
announcements, 1 year of promises, 6 months of endless
screenshots and media coverage, 3 months of magazine and
in-store advertising, one month of television advertising, and
everything else that goes along with the finest
promotion that $50 million can buy. Things starts to look
When you factor that in, suddenly that $98 million starts
Last week, over a half billion dollars worth of new consoles
and games sold in the world had the word "PlayStation" stamped
Putting things in perspective certainly changes things.
Before we continue, let's clear up a few items. For those of
you who know me, I am Gord and need no further introduction.
For those of you who don't know me, you'll need an
I am Gord.
This is not an article to debate the merits of the GameCube
and whether you should as an individual buy one. Quite
frankly, I don't care. I'm a person who owns a TurboDuo just
in case one day I come across a copy of Panic Bomber and I own
a Genesis CDX just because it's smaller than a Genesis even
though I have no Sega CD games in my personal collection.
Rather this is an essay to discuss the survivability,
marketability, and long term software development of the
In reading this, undoubtedly many people will disagree with
much that is
said. Sadly, this industry has some of the finest propaganda
myths known to man. What's made worse is that many of these
driven into us before adulthood. It's never nice to look back
"everything I learned as a child is a lie!"
No amount of playing games will make you an expert in the
field of video
game retail. This is one thing that escape many people. If
run a video game company, video game retail stores wouldn't
have a 95%+
failure in the first year, and Sega (which produces some of
the finest games
in the world) wouldn't have lost money for 5 straight years.
Try getting a loan from a bank to open a game store, they'll
pretty much just laugh at you and say they've never loaned
money to a profitable one yet. Riding in a
plane doesn't make you a pilot, driving a car won't qualify to
run GM, and
being able to order off a menu won't qualify you to get on
This essay is written with regards to financial end of things.
companies aren't here just to make people happy. They are here
money. If they aren't making money on a particular console,
they move to
where they believe the money is.
But this does not exclude you from debating ideas and
possibilities. Remember that when I say something that you
disagree with, my position is of someone who probably knows a
lot more than you.
So unless you own your own store, or sport an MBA in marketing
and have direct video game experience, you know as much about
this industry as I do talking about making spacecraft. Sure, I
know some of theory, but I sure as hell couldn't build one.
If you buy video games, you are the result of marketing, not
Anyway, GameCube. What does it's future look like.
Before we even get into the merits of what the system offers,
let's look at
the market it's entering.
The home console market is absolutely dominated by Sony. The
hard hard facts are that in the last 34 months, Sony has had
an over 90% market share on home console hardware sales, and
95% on software total software sales for home consoles have
been on a PlayStation console. That means everyone else is in
the "other" category on the pie chart.
The PlayStation brand alone has outsold the NES, SNES, N64 and
GameCube unit sales combined! That is no small number, and it
was done in the span of seven years compared to Nintendo in
seventeen years. Next, there have been more games sold with
under the PlayStation banner than the rest of video game sales
in history combined!
(edit: Many people have emailed me and spoken of a list from
Edge Magazine that claims the NES sold 62 million units
worldwide. Nintendo's own published figures claims 33.7
million world wide (source: www.icwwhen.com ), not inclusive
of Japan's 1988 sales (estimated to be between 4-5 million)
and worldwide sales in 1993 and and 1994 of less than a
million. That brings the total to around 40 million. A far cry
less than 62 million. Anyway, I've fired off a note to
Nintendo do get some figures from them.)
(edit: SNES sales. The last number I could find regarding SNES
was 36 million when they launched the redesigned unit. At this
SNES was a non-contender in the market and didn't rack up more
than a few million in sales before it ceased to be. 40 million
units maybe. Same
story, I've emailed Nintendo to get sales figures.)
Further, the PS2 is the fastest selling home console ever.
It's past 22
million units sold worldwide, and it has only been outside of
Japan for a
year. The Genesis in it's glorious 6 year run only sold 21
Dreamcast? 7 million before Sega pulled the plug on it.
Further more, the PS2 has set TEN monthly sales records. Every
month of this year, it has broken the previously existing
record for system sales. And
this during the "quiet" time.
So what does all this mean? It means the GameCube has some
obstacles to hurdle.
First, the problems.
This is a Sony industry. Everyone knows Sony, everyone loves
Sony, Sony is the ticket to the fun. Whatever you may think of
the PlayStation and PS2, it owns this industry. The GameCube
not only has to prove why you should buy it, but also why you
should NOT buy a PS2. And that's not even considering the Xbox
In the last console generation (circa 1995 to 2000), nearly
90% of consumers bought one console. ONE CONSOLE! That is the
market. The theory that people will buy two consoles is a lie.
And the overwhelming majority of people who bought two
consoles were N64 owners migrating over the PS1. Nearly one
half of the people who bought at N64 between 1996 and 2000
also bought a PS1.
Obviously this is going to cause some claims of "lies!" so
let's do the math.
To date, Sony has sold nearly 100,000,000 PS1's. That's a lot.
And for the
sake of the argument, we'll pretend Nintendo sold nearly 30
(though sales data suggests between 20 to 24 million, but who
assuming every N64 owner also bought a PS1, that means 70% of
the market bought ONE console. One console. Just one.
Now, obviously this didn't happen. Somewhere near half of N64
owners bought a PS1. Now, so we have 15 million N64 owners who
remained exclusive, and 15 million who were multi-console (and
15 of the 100 million PS1 owners).
So, you've got 85 million PS1's who belong to one system
owners, and 15
million N64's who belong to one system owners. That's, well,
Add in the 15 million owners who bought multi-systems, and
there you are at a market peak of 115 million users.
Basic math shows that 87% of owners owned one system.
Now knowing this, the market has shown that the overwhelming
them will be owners that will only buy one system. The market
has also said
"Yes, we love the PS2" so that makes the GameCube crippled out
of the gate. If the market was not happy with the PS2, things
would look better for the GameCube.
Trying to sell a product
the public does not want when in their mind a current product
on the market is better and offers more is a very uphill
Next, never has a system sold well that was less powerful than
what came out before it. Never. Ever. Not once. In fact, one
could argue it is retarded
that a company would release a system that offers less than
what came about before. Well, guess what boys and girls,
that's exactly what the GameCube is. Even Nintendo says "it's
less powerful than the PS2." Here is an exact quote:
"Instead of going for the highest possible performance, which
contribute to software development, our idea was to create a
developer-friendly next generation TV game machine that
above-standard capabilities." - Nintendo
Why did this happen? Because prior to Sony showing up,
everyone just bought the parts off the shelf and built their
own machine. Everyone was on a level playing field. Everyone
Sony shows up and says "Hey, I've got a better idea. How about
I just make everything in the machine instead?" and designs a
super console from the ground up. There is no way to compete
with that short of doing the same. Nintendo would have to
spend every penny they've got to match Sony's R&D and
manufacturing facilities, so that isn't really an option. So
go with Plan B, do enough to get by.
The GameCube is no slouch. The GameCube is a lot easier to
make games I am told by developers who contact me, but the
Xbox is the
easiest to deal with of all the three current consoles
If you believe that the GameCube is more powerful than the
PS2, please note that you have been lied to. Welcome to the
world of PR.
The hard facts: Nintendo claims the GameCube can do 12 million
polygons a second peak performance. That's pretty nice. Sega
claims that Virtua
Fighter 4 runs at 63 million polygons a second on the PS2.
That's where you have someone remind you that you're drooling.
(edit: As this seems to be the most disputed part of the
essay, I contacted a few programmers who are actually working
on the GameCube. The consensus was that the GameCube is
easier to make better looking games on in a short time, but if
given longer the PS2 would outperform it. Another point
raised was that the GameCube has 24MB of RAM that can easily
be used for program data. The rest is reserved for audio
and is too slow to be used for anything useful. They
would like to send out a big thank-you to Nintendo on that
complete lack of foresight.)
Next up, developer support.
The Dreamcast had more developer support. The N64 had more
support. The Saturn had more developer support. The Bandia
Wonderswan might even have more developer support. The
GameCube is the least supported system since the Virtual Boy.
While everyone is making PS2 games, and a lot of people are
making one Xbox game in cases it takes off, Gamecube support
is very much in the minority.
The public does NOT buy a system unless they feel it will give
them lots of
new games down the road. Look at MS. They are screaming "Xbox
developers! Honest! More than we can fit into a bus!" which is
approach. Joe Average will NOT buy a system if he feels that
there won't be lots of new stuff coming out. And Nintendo
burned a lot of bridges with
their barren N64 release schedule for good games. They need to
come out and say "hey! Hundreds of games are coming out!"
except that would be a lie.
A quick peek over to GameSpot to sneak a peak at the previews.
After you remove the previews for games already out, you come
up with the following:
GameCube has around 60 titles previewed.
Xbox was around 140 previewed.
PlayStation2 has more than 300 previewed.
Well, that's a lot. And that doesn't even factor in the sheer
number of PS2
games that will only be available in Japan and weren't in the
list. Nintendo's website lists some 100+ games to be
coming out, but GameSpot doesn't count a preview as "this game
was announced." It's safe to expect that all the
consoles have a lot more games in development that were not
Nintendo's plan is to go with fewer games. Uhm, ok. And they
plan to be the biggest developer on the GameCube. When you're
making nearly 100% of the money on a game sold, it's easier to
remain profitable. Assuming the system sells.
The GameCube launch in Japan. Call it what you want, say
anything nice you can. In the non-sugar coated version, the
GameCube imploded on the launch pad.
After the first week of sales, it sold less than 140,000 units
out of nearly
500,000. Imagine walking into a movie theatre on opening night
to see the
latest blockbuster movie that everyone was talking about, only
you get there
and all of three people in their seats when the movie starts.
To date, the
GameCube still hasn't broke 300,000 units sold in Japan. Go
team Nintendo. On or about November 17, Nintendo issued a
statement that they had shipped a grand total of 510,000
GameCube's in Japan. An entire 60,000 extra units since it
launched. That just screams trouble.
On top of that, sales for the third party titles were abysmal.
At least in
the early days of the N64, anything that said "64" sold by the
everyone thought they would all be as good as Mario64. So
developers kept thumping out games. Granted, they mostly
sucked, but the masses bought them in hopes of another
Publishers are around to do two things. Sell games and make
money. Not one or the other. It's both. As soon as they aren't
doing either on a console,
they move on. The complete lack of software sales on the
GameCube (outside of Luigi) has raised a lot of eyebrows. The
hope that the few people who bought the system would buy many
games has evaporated. On the PS2, they know they will
accidentally sell games by the truckload. On the GameCube,
it's looking very hopeless.
Not only did the system not sell as expected, but it had the
lowest level of
software purchases with a major system launch EVER (outside of
the N64 where you had a choice of Mario and Pilotwings). In
Japan it launched with
software selling at 1.3 titles per system on average. That's
The U.S. launch wasn't much better, at 1.7 titles per system.
And if you were a third party developer, you'd notice that
third party games on the GameCube have not been selling. A
better metaphor would be to say that the third party titles
have been murdered and left for dead on the shelves. It's been
all Luigi and Rogue Squadron that's been selling. The beauty
that is Super Monkey Ball sits at the stores unloved, and for
that I shed a tear.
Important note: The average game has a very limited shelf at
full retail. More than half of a games sales will be had
within 21 days of it reaching the distribution channels. There
is no "sales might pick up later" for most games. With 3rd
party titles having a very visible lack of sales, that cuts
right into future developments.
Fifa for the GameCube in Japan went on sale a couple weeks ago
and racked up 4,400 copies sold in the first week. Odds on
favorite it won't pass 10,000 at full price. That gives EA a
grand total of about $250,000 total in profit assuming 10,000
copies sell. Factor in advertising, promotion, and the costs
in producing the games and you just know EA is going
"well, we just lost money."
Fifa at 4,400 copies was the top selling third party GameCube
game from November 12-18 in Japan. Konami's soccer title on
the PS2 during the same time sold 11,000 copies bringing it's
sales total up to more than 50,000 copies. That is what gets
noticed. PS2 games sell, GameCube games don't. (source:
Dengenki Sale Charts) If you were a publisher, where
would you publish your games? The consoles where you
will lose money, or the one where money is there waiting to be
Culture note: The 2002 Fifa world tournament is being held in
Korea and Japan next year and Fifa interest is very high at
And with the lack of a GameCube market in Japan
that is buying third-party games, that means third party games
will greatly slow down in both development and release.
And by will, I mean already has. Then the trickle down
affect occurs as fewer Japanese games get released here.
And companies here know there is less of a market for their
games in Japan and becomes a factor in deciding how much spend
on making the game.
The mass market will not buy a system unless they know it's
getting lots of
games in the future. Period end. The theory that "as long as
it has good
games now" is a lie. Good games now get the interest, and the
needs to know more is coming out to commit to purchase.
Otherwise, it's not worth paying much for the system.
The mass market has shown it cares not for the GameCube. For
it to sell in any serious numbers, Nintendo is going to have
to do something very creative in it's marketing. The current
plan is not working.
This is a money industry. Consumers go where the games are,
publishers go where the consumers are. Right now, consumers
are in Camp Sony. Camp Sony is huge. Camp Sony is growing at 2
million new members a month.
Camp Nintendo is producing less than 500,000 GameCube's a
month. Camp Nintendo is less than 4% of Sony's size. The Japan
model shows that GameCube failed to slow down PS2 sales there
after it's release. That would be safe to say the same thing
will happen here.
Right now everyone is making more PS2 games than GameCube
games. And by simply looking at these numbers, they will
continue to make more PS2 than GameCube games. Shifting to
exclusive GameCube support is financial suicide for a
publisher. While Nintendo will undoubtedly use their support
and money to gain some exclusives (i.e.: Resident Evil), it
won't matter. It won't be enough to sustain the machine. It
will garnish some sales and some attention, but it won't
change the market (the Dreamcast had an exclusive Resident
Evil that was for the time THE best looking game on the
At this point, it's called inertia. The market will continue
to support the
dominant console simply because it has the most to offer. The
doesn't offer any appreciable advantage over the PS2, and it's
seletion will always be lacking. It would be very inconvenient
consumers to choose the GameCube over the PS2.
Assuming the impossible, the market said "Damn it, we love
Rogue Squadron and little monkeys!" and completely stopped
buying PS2's, there would be no market left by the time the
GameCube hit critical mass. Assuming Nintendo were to
immediately double production to one million a month and then
began a scaled increase each month, it would be 2003 before we
saw enough units to sustain the market.
In the meantime, this industry would collapse. There would be
but Nintendo. Imagine if you ran a business, and then suddenly
had to run
it with 4% of the business you had before? It just isn't going
As such, developers will continue to make PS2 games. The PS2
could turn out to be a tool of the devil, and they would still
make most of their games on it. It's the only way to survive.
Nintendo needs to focus on becoming "the great second console"
or target the child's market which they are good at. But the
mini-DVD's are hardly child friendly, and this does not help
Nintendo's cause in targeting this demographic.
Perhaps a better example would be to look at the Dreamcast. It
slightly better launch, for the time it had a hell of a lot
better games, a
distinct graphical advantage, and it sold about the same
number of units to
begin with. And it had to deal with Sony.
Sega produces a lot of good games. And I'm not talking
Nintendo (where Nintendo now outsources most of their games
publish), they actually write their own games on the most
part. And Sega
targeted the largest demographic group that purchases video
games with their games (males 16-24).
And in the end, the Dreamcast failed to become an economically
machine. It had the games, it had the power. It didn't have
willing to keep buying games. The machines are now sitting on
$50. And yet they still don't sell!
This is the fate of the GameCube.
If all it took to be a successful console was a nice price and
games, we would all own Dreamcasts.
In the end will it outsell the Xbox? Not a clue. Will anyone
care in a
year? Only the zealots.
Even Nintendo is saying their main money maker for the next
will be the GameBoy Advance, and that the majority of their
be poured into that.
Even Nintendo doesn't believe the GameCube will be #1 when
it's all over.
And the final question:
Should you buy a GameCube? Hey, it's your money. Just make
buying it to play what's out now, as it's long term viability
is highly suspect. In every respect the Dreamcast was a better
contender, and it's now sitting on store shelves with a $50
price tag and a little note saying "please love me."