Being a hardware platform holder is not easy, there are so many pressures waiting to destroy you, technology, competition, piracy, fashion. So, over the years we have seen many platform holders leave the arena, Atari, Sega, Sinclair, Amstrad, Acorn, Commodore and many more. Each loss weakens gaming. Every platform holder is precious and adds to our industry.
Nintendo are an entertainment company, Microsoft are a software company and Apple are a marketing company. Sony, however, are a manufacturing company so their solutions to the PS3s problems came firstly from manufacturing. The PS3 was obscenely expensive to manufacture, the unit loss hit that Sony was taking was untenable and unsustainable. So they quickly re-engineered it taking out many features, including backwards compatibility. After this they were still taking a huge unit loss, but not one that would kill them. Then last year they made another big manufacturing step change with the Slim, this gave them enough leeway to do a little to become more competitive with retail pricing, but they were still taking a hit on every machine.
Underneath the skin the PS3 was following Moore’s law with the chips starting out using 90nm fabrication, this moved to 65nm in 2007, then 45 nm with the slim, which reduces the silicon acreage by 75% compared to the original machines.
But still Sony seem set to come third in this generation of home console, behind Microsoft and Nintendo, just because of momentum, if nothing else. Sony still rake in profits from PS2 and PSP so overall they are very healthy indeed.
Sony are still massively well placed for the future, they have the brand and the heritage and everything that goes with it. But they do need to get their finger out with smartphones. In just a few years time more of the computing power on earth will be in smartphones than in desk top computers, over a billion a year will be shipped. So they will become the main gaming device. Currently Apple, Android and Nokia are running away with the market. But Sony are uniquely positioned to challenge this, with the PSP they have built an understanding of mobile gaming and they have a large mobile phone division. Let’s hope they have the insight to convert these assets into platforms.
In all the current excitement and hype about Android and the Apple iPhone and iPad people have seemed to lose sight of Nokia, this is a very silly thing to do. Nokia make about 40% (actually 39% last quarter) of all the mobile phones in the world, compared with Apple’s 2%. Nokia has 123,000 employees to Apple’s 35,000. Of the 52 million smartphones sold in the world in the last quarter 21 million came from Nokia, a 40% market share.
Who owns the smartphone market is headed to become the most important factor in all of technology for the foreseeable future. To explain why we need to go back to Moore’s law (again). This says that the number of transistors on a chip doubles every two years. Compound. This means that a given chip halves in cost or doubles in power every two years. This is easy to see in the price and capabilities of the game consoles, mobile telephones and computers we use every day.Other, lesser, components are not governed by Moore’s law. But we are at the beginning of a display revolution that will see complex, power hungry LCD displays replaces by simple, cheap, elegant OLED displays, which will drop prices further and faster.
There are companies that tear down these electronic devices to work out how much they cost to manufacture. Currently this is around $180 for a top end smartphone. So in 24 months time this could be $90. And due to the compound nature of Moore’s law this would be just $22 in 6 years time. You can see that at this price non smartphones have had their day. All new phones will be smartphones. And we are talking about a billion new phones every year.
A billion new smartphones is a billion new computers connected to the internet. It is also a billion new gaming machines. Every year. This is going to be revolutionary. It is going to put so much power and so much capability in the hands of so many people. It is going to totally dwarf the computing power in all the world’s desktop computers and it will make game consoles look like a small sideshow. It will be the biggest democratisation of knowledge and the means to use that knowledge in human history.
So if Nokia can hang on to owning 40% of this they will be the biggest computer company on earth. And if you look at what they are doing right now there is no reason why they won’t. They may lack the showmanship of Steve Jobs but they are more than making up for it with great products that people want.
It is not just the hardware. Nokia are covering their bets by having two different operating systems. Symbian is now open source so expect more rapid development to build on it’s ten years of development that make it the most fully features smartphone OS. Which is why it is on more smartphones than any other OS. Maemo is also mostly open source. It is a clean sheet of paper, state of the art, linux based OS and it is what drives the new N900.
Ovi is the online portal for Nokia smartphones, it is an App Store, an iTunes, a Google Maps, email, file storage and sharing service and so much more. It is where nGage now resides. Ovi is the most comprehensive suite of online services currently available for a smartphone.
By now you must be getting the message, if you are in the game industry you ignore Nokia at your peril. If you develop smartphone games they need to be on Ovi, not just Android and iPhone. And if you don’t develop smartphone games then you are going to miss out. Massively.
The Wii isn’t clinically dead yet, but its best days are well behind it. Sales are massively down, and with that so are Nintendo’s profits and their share price. So they must do something soon, not so much for their gaming audience and fanboys, but rather to keep their investors happy.
The Wii was always just Gamecube V1.5, it was not truly a machine of the current generation like the Sony Playstation PS3 and the Microsoft Xbox 360. It lacked the power and it lacked the HD graphics. But to make up for this it was cheaper, it had that breakthrough gesture interface and it had a catalogue of amazing Nintendo first party games that were must haves for any keen gamer.
The problem now is that the Wii no longer looks cheap, the cupboard is pretty bare of first party titles (most third party titles having missed the mark) and the gesture interface is looking old hat compared to what the competition are about to unleash.
Now, the people that run Nintendo are not fools, they know all of this better than I do. So it is obvious that the successor for the Wii is already designed, that the first party studios are working on games for it and that production is just about to start. So the Wii will be discontinued with about 68 million units made, it will be interesting to see if the Xbox 360 can catch up with this figure over the next five years.
The new machine, if Nintendo keep to their previous naming rules, could well be called the Super Wii. Moore’s Law tells us it will be about four times more powerful than the Wii. And the market tells us that it will be HD. Obviously it will be backwards compatible. But this specification, on its own, will not be enough to compete. Nintendo need to do more. Much more.
Over three years ago I wrote an article in this blog entitled What is Nintendo? That article is just as true now as it was then and mirrors much of Satoru Iwata’s thoughts. The key here is that Nintendo is an entertainment company first and foremost, they are not a hardware or a software company, it is just the entertainment that matters. And they use technology and innovation to provide this entertainment.
So I don’t know what to expect. They know that they need to innovate, so they could do just about anything. The only thing that is for sure is that it will be fun.
The Microsoft Entertainment and Devices Division was able to start the year by telling the world that they are three times more profitable than they were a year ago. Q4 ’09 profits from the division were $375 million, compared with $130 million for Q4 ’08. The increase comes from Moore’s law bringing down hardware manufacturing costs and from the ever increasing user base buying proportionately more software and Live services, which are a lot more profitable than hardware.
The Xbox 360 also currently heads the game sales chart with Mass Effect 2 and are by far the most popular platform for the monster hit that is Modern Warfare 2. This presages a year in which there will be a succession of huge titles that are not available on the other consoles. Halo: Reach, Fable III, Tom Clancy’s Splinter Cell Conviction, Alan Wake, Crackdown 2 and Scrap Metal for starters. For any game enthusiast these make owning a 360 essential, even if it is in addition to owning other consoles.
On the hardware side Microsoft are starting to roll out 250GB hard drives. And this autumn we have the much anticipated release of Project Natal. Microsoft have changed the design slightly to reduce the hardware by doing more in software (using 10-15% of the 360s cpu resources), this is to keep to the $50 price target and to increase the flexibility of the device. At this price Microsoft expect to sell several million units in the ’10 holiday season and so there is impressive game support coming from publishers. Pretty soon around half of all 360 owners will probably buy Natal and they will want Natal enabled games to play on it. Expect a surge in more family friendly titles, which will take the 360 to new demographics, further enhancing its success.
All is not sweetness and light at the Microsoft Entertainment and Devices Division, though. Their mobile strategy has been an unmitigated disaster with Google and Apple trampling all over them. This is the biggest possible problem for Microsoft as mobile devices are set to dominate computing and the internet. Even if they continue to dominate the office and grow to dominate the living room they could still be beaten by the owners of the mobile space.
Finally let’s risk making a prediction for the next generation of Microsoft home console, the Xbox 720, Xbox 3 or Xbox Phoenix. It is inevitable that Microsoft must do this because Moores law will leave the Xbox 360 looking less and less powerful. They will produce a scaled Xbox 360, so it will be backwards compatible. The new machine will have many more features and benefits such as 3D. It will be announced, probably at E3, in Q2 ’11 and will be available at retail Q4 ’11. Expect it to be 8 times the power of an Xbox 360 (Moores law says it will be) and expect the 360 to stay in production as the junior model in a two model range, retailing for $100.
You may never have heard of ARM microprocessors, but you use many of them every day. They are in virtually every mobile phone and every PDA made, there are lots of them in every car, running systems like airbags, fuel injection and ABS, in fact they are embedded in most of the world’s electronic devices. Many billion of them are made every year, 90 are made every second.
And they are one of the cornerstones of the technology that makes video gaming possible. They are in the Sony PSP and the Nintendo DS, they power the iPod Touch and the iPhone and they control many of the world’s hard drives and internet routers.
ARM is an acronym, with another acronym inside it.
A stood for Acorn, a British manufacturer of home computers between 1978 and 1998. Successful models include the Electron, BBC Micro, Archimedes and the Atom. The earlier machines used 8 bit 6502 processors, but when Acorn wanted to create a graphics user interface the 6502 was not powerful enough. They discovered that a class of students in America had designed their own processor, this emboldened Acorn to do likewise. It was largely designed by an engineer called Sophie Wilson and was made as simple as possible for a 32 bit processor with just 30,000 transistors. And in 1987 it went into the Acorn Archimedes.
In 1990 the A changed from representing Acorn to representing Advanced when the processor was farmed off into a separate, new company, Advanced RISC Machines Ltd, jointly owned by Acorn, Apple and VLSI technology. When they went public in 1998 they changed their name to ARM Holdings because they thought that the investing public would not put money in a company with RISC in its name!
R stands for RISC, as I have already said. RISC is itself an acronym, it stands for Reduced Instruction Set Computer. This does what it says on the tin. If you reduce the number of different instructions that a microprocessor can execute then it can execute them more quickly. This can be a big difference as each instruction takes less clock cycles (mainly just one cycle with the ARM). Also the processor will be a lot simpler, so will be cheaper to make and use less power. The downside is that you need to use more instructions in your software than with conventional microprocessors.
M stands for Machine, which is what a microprocessor is. But you need different powered machines for different jobs, so now ARM create a whole range of these machines (over 580 different processor designs) to perform everything from the simplest task to being the main processor in a portable computer.
ARM don’t actually make the chips, they license the designs out to most of the world’s chip manufacturers, over 200 separate companies make them. These people in turn use the ARM designs in a myriad of different ways, often embedding the ARM processor on a chip with lots of other components. In fact today it is not uncommon for all the components of a computer to be on the one chip, this also has an acronym, SOC, or System On a Chip.
An example of an embedded ARM is the Wii, which has one embedded in the Hollywood graphics chip, this works with the main (non ARM) Broadway processor, controlling input and output. The hidden, embedded nature of this ARM was what made the Wii system so hard to crack.
An example of an SOC is the Apple A4 chip in the new iPad tablet computer. This one chip contains an ARM Cortex-A9 processor and an ARM Mali 50-Series graphics controller with all the electronics they need to make up a complete system.
One feature of ARM chips that has made them so popular is their very low power consumption. They give the most processing power possible for a given amount of electricity. Part of this come from their fundamentally simple and elegant designs, they contain less components than the alternative solutions to getting the job done. Part comes from the fabrication techniques and actual silicon technology. And part comes from very clever power management. The speed at which different parts of the chip work is controlled to be as slow as possible commensurate with getting the job done. From flat out to total stop. This efficiency brings secondary savings when heatsinks and cooling fans aren’t required. Overall it makes them the processor of choice for any portable device.
ARM is a British company, based in Cambridge and with offices all around the world. They turn over about £300 million a year and employ nearly 2,000 people.
I have predicted in the past that eventually Microsoft’s Xbox/Live/Zune business would grow to become bigger than their PC business. If you look at the trends over the last two years this looks to be eventually inevitable, Microsoft have been amazingly successful with this generation of home game consoles. But there is a caveat, they are being extraordinarily unsuccessful with Zune and with Smartphones (which should be the same thing) which shows that they don’t get everything right.
Against this background Microsoft have made two pronouncements in recent days that are very strange indeed and which have got me a little worried.
Microsoft’s Xbox group product manager Aaron Greenberg was at CES, which was a 3Dfest, he said: “We’re unsure what level of interest there is from consumers to really want a 3D experience in the living room. Many, many years from now when it becomes a reality, we absolutely can support it.” and “there’s a lot of challenges about 3D in the living room. I don’t know about you, but when I play games or watch TV, I’ve got my phone, I’ve got all kinds of things going on. I get up, I get down, I’m looking outside at the weather and it’s…I’m not in a dark theater, wearing glasses, staring at a screen. I think it’s just a different environment.”
Compare and contrast that with Howard Stringer of Sony, who said: “We intend to take the lead in 3D. We are the only company fully immersed in every part of the 3D value chain”.
So who is right? Having experienced 3D gaming myself and looking at the way that all the world’s electronic companies are moving over to 3D I think I will side with Mr Stringer on this one.
This is in total denial of the beating heart of game platform history, Moore’s Law. This says that the number of transistors that can be put on a chip doubles every two years. So, for a given price, a game console can double in power every two years. This is why we have generations of consoles, normally every 5 or 6 years. The Xbox 360 was launched at E3 2005, so already a successor would be over 4 times more powerful. And this is very easy to do, the architecture of the Xbox 360 is such that it can very easily be scaled up with more powerful CPU and GPU whilst remaining backwards compatible.
So what is happening here? Do Microsoft really think that Natal is a substitute for a shiny powerful new console? There are tens of millions of consumers out there who want the latest, best, most powerful toy. And they are prepared to pay for it. So whoever delivers will take their money.
What seem to be happening here is that Microsoft are looking at their competitors instead of looking at the market. Nintendo are still half a generation behind with their hardware and a full generation behind with their online offerings. Sony are battered and bruised by losses, especially from their Playstation division, and so are in no fit state to launch a new console just yet. So against these competitors Microsoft can relax. But if Apple were to announce their state of the art home console then Microsoft could find themselves suddenly on their back foot.
Personally I hope that both these statements were bluff. That Microsoft have both coherent 3D plans and a new game console on the drawing board. If not the chances are that at least one of these will catch them out.
On the face of it the Vitality Sensor is a very simple device that reads your pulse. It then sends this information, in a continuous stream, to your Wii console. This is called biofeedback. The console knows what effect it is having on you and can adapt what it does accordingly. The potential applications are infinite, limited only by the imagination of the development community. It is possibly the cleverest video game input device ever.
Biofeedback is an area of science of some respectability which is currently going through a boom. The Association for Applied Psychophysiology and Biofeedback (AAPB) is the main body in the world advancing this science. Their website says: Biofeedback has evolved from a fascination in the 1960s and 70s to a mainstream methodology today for treating certain medical conditions and improving human performance. This evolution has been driven by years of scientific research demonstrating that the mind and body are connected, and that people can be taught to harness the power of this connection to change physical activity and improve health and function.
If you have any imagination you will be beginning to see the potential now. The Vitality sensor could be used as a pure gaming device, or as a pure health device. Or knowing Nintendo they will find some amazingly innovative way for it to do both.
Biofeedback in gaming goes back a long way. In about 1973 there was the bio-mechanical Will Ball Games from Charles Wehrenberg, which was about competitive relaxation. In 1984 he implemented it on the Apple 2 computer. He even wrote a novel about it which you can still buy at Amazon. In 2001 a company called Journey to Wild Divine created biofeedback hardware and software for the Apple Mac and Microsoft Windows. They are still at it and make a good starting point for anyone in the game industry trying to get up to speed. They say: With just a few minutes of practice each day, Wild Divine’s products can transform your computer into a beautiful and engaging experience of relaxation and balance, helping you to increase your energy level, restore balance and improve your ability to connect to the world around you in profound ways.
And Nintendo themselves have previous. In 1998 they release the N64 biosensor, which clipped onto the game player’s ear and read their pulse. This was used in a game called Bio Tetris which was a game within Tetris 64, which was only available in Japan. IGN reviewed an import copy of the game and they had this to say: When playing in Bio Tetris mode, there are two basic settings for the feedback function. Normal makes the game easier if you get more excited (or nervous), resulting in slower dropping pieces and a more relaxed gamer. Reverse, or maybe they should call it “heart attack” speeds up the pace of the game as your heart accelerates. While this may all sound incredibly exciting, it really isn’t all that great. Truth to be told, the bio sensor is a neat little gimmick for health freaks, but it doesn’t really add much to the whole gameplay experience. It’s a cool extra, but we wouldn’t want to pay extra to get it.
The fundamental of what we are talking about here is how the human animal connects with the electronic gaming machine. The man machine interface. The ultimate aim must be something like Tron, or the Holodeck out of Star Trek. In the meantime the available input and output methods available to us are pretty crude. This is why the gesture interface (also popularised by Nintendo with the Wii) has had such a huge impact on gaming recently. And it is why biofeedback could be of great significance to gaming. Whether it is or not depends solely on the creativity, imagination and vision of those creating the software that uses it.
It is not just the immersiveness of gaming we are talking about here. It is an expansion in the range of possibilities. Video games will be able to do far more things with biofeedback. So it could be a further step on the inevitable road to gaming being the dominant form of popular culture. And because it is Nintendo that is doing it my expectations are very high.