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GIN _03 pt 2.qxd 1/23/04 11:18 AM Page 1 VOLUME 1, ISSUE 3; JANUARY 23, 2004 What’s Happening Out There Everyone is chasing living-room nirvana. son that saw the company hold off specialty chain to tell us which new titles at Microsoft has a strategy for connecting its Nintendo. According to Sony, while PS2 CES excited them the most. Every single one Xbox to computer-based media—all you sales dipped, the company maintained its was a sequel. With game-production costs have to do is install a home network. Sony lead position during the holiday season and through the roof and game-console margins has a strategy for connecting its PS2 to all shipped its 70 millionth PS2. Even the objec- about to be sliced by discounting, everybody sorts of media—all you have to do is buy a tive analysts we’ve talked to can’t agree on wants a sure thing, now more than ever. So PSX. And now the consumer-electronics who’s up and who’s down. This reflects a when a striking new game like Beyond industry is seeing handheld makers offer console cycle that has entered its second Good & Evil appears, publisher Ubisoft devices that pack PDA, phone, and half, a time when the battle for market share won’t put much muscle behind it because BlackBerry functionality in one tiny unit, is fiercer and meaner than ever. Every execu- there are truckloads of Rainbow Sixes to and as one game-console exec tells us, “If tive we asked predicted Xbox and PS2 price move. This can’t go on. Nine of the top 10 you own the single device at the center of cuts this year, most likely in the first half. best-selling PS2 titles in December were everything, you wind up owning everything. “They’d be wise to couple the price cut with sequels, but among the top 10 highest-gross- Sorry if that makes me sound like the guy in the release of a long-awaited new game and ing films in December, only two were The Matrix.” With hopes of ruling this new put out an irresistible package,” one devel- sequels or remakes. An industry that contin- world where one remote delivers Internet, oper CEO says. “As the prices go down, the ues to feed on itself will one day devour television, and games, consumer-electronics whole image thing isn’t a differentiator any- everything and will then somehow have to companies and their gaming compatriots are more. It’s all about what games people want start over from scratch. Hopeful observers rushing to deliver all-in-one devices. They’re to play.” This jockeying for position in the maintain that the new Nintendo DS and interim devices, though, in part because of market is already spilling over into the jock- Sony PSP handheld platorms, due late this the many competing standards—the idea of eying for position that’s taking place inside year, will force more innovation in console resolving all format incompatibilities with console-maker boardrooms. The recent games. Is this the beginning of a new con- one unit resides somewhere between wishful high-profile departure of the Xbox team’s sole cycle or something much, much bigger? thinking and willful ignorance. Early sacri- Vice President of Games Publishing Ed Fries, In our next issue, we’ll explore why we fices in this area are likely to be the a situation our sources at Microsoft and think the latter is far more likely. ■ Phantom (assuming it exists) and elsewhere tell us is the result of a fierce Apextreme, both of which received a good power struggle, is only the beginning. NINTENDO SEES DOUBLE deal of attention at the recent Consumer Indeed, in next month’s issue, we’ll catch up Electronics Show. According to our man at with the members of the original Xbox As this newsletter went to press, Nintendo Sony, which is betting on the success of the team. revealed the first skeletal details of its next PSX, “This space won’t hit the mainstream device, a “Nintendo DS” handheld that will for years,” perhaps not until the next ver- EA, EA, EA. Which mountains are left for include dual 3-inch color screens, giving play- sion of Windows emerges. If even relatively Electronic Arts to climb? In North America ers multiple views of the same game. More entrenched companies like Gateway are hav- this past December, the company sold four details are promised for E3 in May. Apparently ing trouble inching toward convergence of the top 10 PS2 titles. In the United geared for older players than the GameBoy, from the PC side, the executives we’ve Kingdom, according to Chart-Track, it sold the DS will battle the Sony PSP for more talked to insist there’s no room for the five of the top six titles on all platforms. Its upscale players. Don’t compare the two, said upstarts. With console prices continuing to biggest franchises are spawning new sequels one developer CEO: “The PSP is do-every- drop, it’s likely that a large percentage of this year. Activision and THQ have earned thing, a handheld PSX. The DS is for gamers gamers just want a device that lets them competitors’ respect, but as one THQ exec and only gamers.” Added a biz-dev exec: play games. tells us, “EA is the only publisher that actu- “Great. Another platform that only Nintendo ally spawns fear. They’re unstoppable.” will write for.” Those are only the earliest, As a result of convergence mania and However, when you hear executives talk most knee-jerk comments. Is this what tighter margins, the console war is getting about EA—which they do all the time—they Nintendo’s legions want? Sixteen hours after nastier. According to Nintendo, its dramatic rarely talk about nonfranchise titles, which the announcement, enthusiast boards offered GameCube price cut helped the company brings us to… more chatter aboutLinux-based GameCubes take first place this holiday season. than the DS. We’ll have in-depth coverage in According to Microsoft, its outstanding Too many sequels. We asked buyers from our next issue, mailing February 20. At the Xbox Live service led a “great” holiday sea- a consumer-electronics chain and a gaming- very least, E3 just got more interesting. GIN _03 pt 2.qxd 1/23/04 11:18 AM Page 2 All the Wood Behind One EDITOR-IN-CHIEF Microsoft Gaming Arrow? Jimmy Guterman Dean Lester has big plans for Windows gaming. First, he’s working to [email protected] make the Xbox team play nice with the Windows one By Mary Jo Foley Our sister newsletter Microsoft Watch cov- Windows Client Extended Platforms divi- ZIFF DAVIS MEDIA ers the Redmond Giant with unparalleled sion. That unit is composed of the rigor. We’re delighted to have Microsoft Windows eHome division and the 500 UNICORN PARK DRIVE Watch editor Mary Jo Foley share what she Windows Tablet PC and Windows WOBURN, MA 01801 learned at CES. You can find out more Hardware Experiences groups—basically about her publication at www.microsoft- all the Microsoft businesses that are 781-938-2639 watch.com. –Ed. extending the Windows core. Interteam rivalries are a way of life at Lester admits Microsoft has done little to ART DIRECTOR: Jason Babler Microsoft. For years—maybe even since extol the virtues of Windows XP as a Microsoft was born—the company brass strong gaming platform. But he says the has pitted one team against another, with company won’t make the same mistake COPY DESK: Tom Edwards, Greg Ford, the intention that the best team’s products when Longhorn ships two years from now. Susie Ochs, Maritza Refuerzo would triumph. In Longhorn, he promises, gaming will be treated as an experience on par with shar- Gaming has been no exception: The ing photos, shopping, and other key groups Xbox team has been no friend of the of tasks. PRODUCTION: Carlos Lugo, Michele Windows team. But Dean Lester, general Manousos, Anne Marie Miguel manager of Microsoft’s Windows Graphics While Longhorn will feature its own pre- and Gaming Technologies, claims the tide sentation/graphics subsystem, code-named is turning on that front. Avalon, DirectX 9—not Avalon or even the CIRCULATION DIRECTOR: Chris Wilkes next version of DirectX—will power We chatted with Lester in his well-hid- Longhorn’s graphics. But don’t think that [email protected] den suite at the Hilton during the DirectX 9 won’t be up to the task, Lester Consumer Electronics Show. Lester has says. “DirectX 9 has two generations of been with Microsoft since 1996 and was graphics support built into it,” he explains. ZIFF DAVIS GAME GROUP responsible for all of Microsoft’s simula- “There’s hardware it can support that peo- SENIOR VICE PRESIDENT: Dale Strang tion titles. Before that, Lester worked at a ple haven’t seen yet.” number of gaming-related companies, PUBLISHER: Lee Uniacke including Disney and Sega. But Lester has- Lester’s team is also working to guaran- EDITORIAL DIRECTOR: John Davison n’t been all about gaming at Microsoft—he tee that existing games will run on also did a stint with the Office team. Longhorn. Just as they did with DOS BUSINESS DIRECTOR: Cathy Bendoff games for Windows 95, the graphics and These days, Lester is touting Windows— gaming developers are building configura- both the current Windows XP release and tion files for each and every Windows XP Copyright © 2004, Ziff Davis Media Inc. the future Longhorn one—as a gaming game so they will run on Longhorn, he platform as palatable as Xbox.