***E3: Walking the Floor
By John Latta
Walking the Floor at E3
One of the best examples of 3D was shown by Microprose with
Falcon 4.0 under Windows 95. The terrain was excellent. Microprose
used an unreleased version of Intel's 3DR which runs with
Microsoft's Direct Draw. Microprose sees Direct 3D as not being
ready and the only game in town is 3DR because it works. At the
same time Microprose was very optimistic about Windows 95 and
how this will enable better games. The impact of the 3D fx
accelerator, with no other changes in the game, was to go from 10f/s
to 40f/s - based on only 8 days to do the conversion.
We took notice of the no-shows: Cirrus Logic; Panasonic/M2; 3DO;
Atari; Autodesk and Apple.
Throughout E3 it was clear the home entertainment market is under
assault. Microsoft is being successful in building the image that the
PC is the game platform of choice - it was impossible to miss its
lavish booth. The PC has the inherent advantage of its flexibility -
add on expansion via cards, superior image quality due to larger
screen area and non-interlaced displays, a host processor and O/S
based on industry standards and variety of content. This latter factor
will be responsible for making the PC a much more appealing
platform for more than just the 12 - 18 male age group. Thus, the PC
industry is seeking to decimate the home video game business while
this same business spends lavishly on advertising, image building
and product development. The best example of the dilemma which
the home video industry faces is the quandary which Nintendo is in.
Its business model is out-of-date. Cartridge based games are over. As
Sony said at the press conference announcing the price cuts to $199 -
'If it does not spin it does not win." Developers are increasingly
reluctant to embrace a platform, no matter what its 3D engine is,
where they carry the financial burden of expensive cartridges. At the
Computer Game Developers Conference it was stated by an industry
analysis - "I know of no company who feels they can make money
writing for Nintendo 64."
While the PC is encroaching from the top of the market Sony, Sega
and Nintendo are engaged in a money losing blood bath. Sony began
the conference announcing that it had lowered the price of the
Playstation to $199. The next day Sega matched the price. Nintendo
resisted and remained at $249. Sega was touting its under $400
Internet solution. We came away with the sinking feeling that this is
a game of who can lose the most the fastest. Our scan of the
platforms on the floor provided a significantly different view. In
terms of machines in booths showing titles it was a hands down win
for Sony Playstation. PCs were present but no where near the
numbers of the Playstation. We could hardly find a Sega Saturn
except in the Sega booth. Nintendo, in spite of a massive booth, was
only showing a few titles, many of which seemed to have been
quickly brought over from Japan, Kanji characters and all. Tucked
away in the Nintendo booth was Virtual Boy and we played a
number of the games. We cannot fathom how this platform will go
anywhere. Thus, in spite of a major shakeout in the market, where
Atari and 3DO have left, we feel that what was at E3 is very
transitory. Specifically, unless Sega makes major strides in
upgrading its platform it stands to continue to lose significant market
share. Sony is riding the crest of its popularity but when compared
side-by-side with even the early PC 3D capabilities the Playstation
image quality seems crude. Nintendo, does break new ground in 3D
but again 3D on the PC is moving very quickly into the same quality
and better territory in terms of selection of titles. The business model
at Nintendo is under assault and highly problematical. Out of all of
this we only see the PC as having an ever increasing role in home
entertainment. If the Simply Interactive PC (SIPC) catches on this
only spells more problems for the home video game industry.
One of the reasons for this turmoil is the rapid change in the home
media market. All the current players - Sony, Nintendo and Sega are
Japanese companies. As the PC begins to dominate the home
entertainment market product cycles the time frame goes from 2 - 3
years in the video game market to 6 - 12 months in the PC market.
Note that this is especially the case with the product cycles in the
Internet market which are now running at 3 - 4 months. As a result,
these Japanese companies are not effective in rapidly changing
markets. Nintendo clings to its proprietary storage technology,
cartridges, and Sega to its brand identity, while the computer
industry seeks to surpass the video game business. We are seeing
early signs that the home video game market is being absorbed into
the mainstream of personal computing. Thus, for Sega, Sony and
Nintendo to play a strong role in the long term they must respond to
market changes driven by the competition, that is, their product
cycles must approach 6 months. To date, the Japanese companies
have not been agile enough. What we saw in the price wars is really
the last battle they can fight - competition for market share in a
declining market defined by their own players.
Wave Issue 9601 6/23/96 Article 91-01