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Question of the Week Responses: 'First Mover' Advantage?

With the Xbox 360 launching this fall with a six month window over its nearest rival, Gamasutra presents the responses to: "Is the 'first mover' advantage an important factor in launching a next-generation console? What factors could potentially outweigh it?"

Quang Hong, Blogger

July 14, 2005

16 Min Read


The latest Question of the Week asked of our game professional audience: “Is the 'first mover' advantage an important factor in launching a next-generation console? What factors could potentially outweigh it?”

While most respondents agreed that there is a definite advantage to being first-to-market, the consensus was that there were many factors to be considered in exploiting that advantage, from having powerful hardware available, through having a solid library of quality games, to a marketing blitz to quickly capture marketshare - first isn't definitively best.

Being the “First Mover” is an Important Factor

A majority of those that replying thought that being first-to-market is extremely important. However, with the Dreamcast being cited on several occasions, there are clearly pitfalls to avoid in order to properly take advantage of being first out of the gate.

Illustration by Erin Mehlos

For first mover advantage to work, the new platform must have credibility in two areas. First, it must be seen as being a significant technical advance over the current generation, otherwise it has no real purpose in the market. Secondly, there must be confidence in the new platform from both the public and the industry, without this the new platform will struggle to reach critical mass. The second mover can negate the first mover's advantage by having a higher level of credibility in these two areas. This explains the current tone of Sony spin.

Being first to market is always important in any industry. As for wildcards, I'd like to know if the PS3 will ship with an open source Linux development environment. I'd drop Windows in a heartbeat if a large alternative market with inexpensive development tools and few/no licensing strictures was available. Another factor is the underlying hardware architecture. Each system's CPU are very different beasts; it is not going to be trivial to target both PS3 and Xbox 360 to full advantage. Some pundits believe that the architectures will necessitate rather different content production pipelines.
-Brandon Van Every, Indie Game Design

Being first mover can definitely be an advantage, but it can also be a disadvantage. It all depends on how far ahead you are of your competitors. If, for example, the Xbox 360 is fairly close in power, quality, number of games, and the overall experience to PS3, then their "first mover" status will be a nice advantage. If the PS3 ends up being substantially more powerful and/or with better games then the Xbox 360 will be a disadvantage because gamers will view it as obsolete already. The amount of time between two consoles launching is also a big factor. Many people will be willing to wait up to a year to see what the other guy has to offer, but after that, people become impatient and for some, the window is much smaller. Sega released their Dreamcast almost a year ahead of the PS2, but the lack of games and marketing muscle allowed Sony to convince players to wait off for their system, even though first gen PS2 games didn't even look as good as the Dreamcast's. Brand loyalty can also be a factor, but it's a fairly small one. If the Revolution comes out a year after the Xbox 360 and over 6 months after the PS3, yet has less powerful hardware and less titles to offer, then only the people with strong brand loyalty are even going to care. The only other factor will be price, but we still don't know anybody's final numbers yet. In the end, it's really all about who has the best games, though.
-Derick Eisenhardt, EMH Games

In terms of business, having your product out first is strategic and helps set the pace and tone of your market. Thus, having “first strike” will force your opponents into a reeling frenzy. In terms of development, it's up in the air. If the developer/designer/creator has a completed product ahead of schedule (rare, but possible) and the console has passed the testing and debug phase, then by all means give to the public. However, having the product out at its designated date takes precedence. One company that is notorious for pushback (despite making their products higher quality this way) is Nintendo. 'First Mover' does not impress me. Having a properly working product out at its designated timeframe - that impresses me. Now, as far as launching goes, having it early doesn't mean it's ready. The purpose of any gaming consoles (old or new school) is to have a lineup of games ready to: (1) display the potential/limitation of the system to consumers and designers alike, (2) define its place in the Gaming Arena, and (3) determine if improvements can still be made in the years to come. Having a console early with no solid lineup of games to enforce the system is equivalent to a fishing rod and no bait: Little catch, if any. Regardless of the release date, these new consoles will set the tone and direction of the gaming arena's new generation of heroes, villains, and visionaries. I trust the companies are, at least, prepared. That's my two cents.
-Michael Rivers, Game Designers in Training

It's obviously an important factor: it's one of the most important factors when you have two, three, or even more consoles competing. Being first was a huge part in the PS2's success - by the time other consoles could make it out into the stores, many people already had a PS2 in their homes. Clearly many of these people wouldn't be interesting in buying another expensive console so soon. Of course, I'm talking about the mainstream audience who don't know or care about technology or the numbers behind the different systems, people who wouldn't have brand loyalty to a specific console that would drive them to wait and ignore the next-gen console that's already out. This is an important factor, but I think it can be potentially overcome if the "first mover" console is a big disappointment compared to the others.
-Stephen Mokrytzki

This strategy always seems to be the lucrative one when the competition is still on the horizon, but history has shown us that in the long run, it seems to be diminished when the competition finally does arrive. When Sega released the Dreamcast, the Playstation 2 was still far off, but when the months for its release shortened Sega knew it needed to penetrate the consumer market with a large quantity of the product in order to even compete. Unfortunately for Sega they could not reach the number and so the system died. Will this be the case for the Xbox 360?
-Alan Cruz

Being the first mover has its obvious advantages. When you look at the Playstation 2, you can see this clearly. Even though it is technologically inferior to the GameCube and Xbox, it sold better in due in part to the fact that it simply was released first, so people bought it because it was out and no other consoles were. Also, first movers have the advantage of an established library of games by the time other consoles come out, to some degree. They can use this advantage to release major hit games to coincide with the release of other consoles and force people to reconsider buying them, such as what Microsoft plans to do upon the release of the PlayStation 3. On the other hand, brand loyalty is a much stronger factor. It's unlikely that a PlayStation 2 fan would buy an Xbox 360 simply because it comes out first, unless the difference between the release of the Xbox 360 and the PS3's release is substantial. The same goes for Nintendo fans.
-Lucas Fairhurst

"You never get a second chance to make a first impression." The Atari 2600, NES, Genesis, and PlayStation were the leaders of their respective generations. They were also the first. Of course, the Genesis stole and then lost quite a bit of market share to Nintendo's SNES. It proved that being first out the door can yield rewards, but you need to sustain success with game titles. The PlayStation 2 and Xbox generation marked a change in the console market. Sony was an established leader, Microsoft was an X factor: a newcomer to the console market, but by no means a new company. They bought their success through extensive R&D and selling the Xbox under cost. Sacrificing the profits of an entire console generation to force a foothold in the genre. For the next generation, Microsoft will not only be the first one out, but also the only one available this Christmas season. In my opinion, the Xbox 360 will keep their faithful and gobble up a bit of the PS2 owners. PS3 will maintain most of its marketshare through game title strength, but Microsoft will gather up most of the new console buyers. Sony will join IBM as the big boys unable to stave off Gates' drive to dominate.
-Patrick Lister, Computer Sciences Corporation

Obviously, there is always going to be an advantage in releasing first, especially in an industry that is as popular with our fickle youth as gaming, but past experience shows that there are more important things out there. There are many factors to outweigh it in this case: The Revolution's backward-compatibility/game downloading service, for example, is one factor that weighs heavily on me, personally. Of course, after the successes of the PlayStation and the PlayStation 2, there will be the fan-factor there to help Sony through, and the same will be helping Xbox 360 as well.
-Aaron Sarazan, Mi-80

You Gotta Have a Solid Launch Library

A few respondents felt strongly that these questions always come back to the games.m and they responded that, regardless of hardware, it is the software that moves product. For them, having a solid launch library was the most important factor when introducing a new console.

It is my personal belief that the “first mover” doesn't necessarily have an advantage over the “late bloomers” because it has been, and always will be, about the games. If there's a system released that doesn't have any good launch titles, it won't sell until there's at least one title that appeals to the mass market people. Although it's not next gen per-se, the PSP is a good example of this. There aren't really any “must-have” games on the system and most of the games are ports of existing PSOne or PS2 games, or are racing/sports games. That's why I didn't buy one at launch. Same with the DS. The other factor that plays into this is price. If the prices of consoles keep going up and they don't include any incentive (game, demo disk, extra controller, memory card (if applicable), etc), console makers will probably notice a trend of gamers waiting for a pack-in deal, for the console to drop in price or for some holiday sale of sorts. My personal thoughts are that if the PS3 is going to come out at $399, as rumors are stating, there's no way I'd get it for at least 6~8 months. Once you factor in a $60 game (since “experts” are saying that the cost of games is going up again in the new wave of gaming machines), an extra controller and a memory card, you're easily looking at over $500, and that's just to have ONE GAME with a brand new system. It's just not cost effective for me.... and I'm a gamer! That's it from my soapbox. Thanks!
-Robert Givnin, Humongous Entertainment

While the “first mover” next-gen console will certainly set the bar for performance and style, it's really all about the games! The launch titles and exclusives secured by each console will predicate success more accurately than any other factor. The core features of the system and the effectiveness of the long-term marketing campaign are also important. That said, most buyers aren't buying consoles to boot them up and look at the pretty system interface. They're buying consoles for the games they can play on them.
-Coray Seifert, Large Animal Games

The "first mover" is a blessing and a curse. On one side, you're the first next gen console on the market. If released during a drought of games, consumers will gladly receive it. On the flipside, what you sacrifice to get your console to market first will haunt you. Any shortcuts taken will blow up in your face and the consumer will be the one burned. Most importantly, there is one shortcut you must never take and that is launching without a solid library.

It's just like chess; first mover doesn't necessarily mean the game goes in favor of that player, but it helps. It's all about how the first mover follows through. First-parties need to have a stable marketing program that doesn't just focus on launch but also the weeks and months following. We usually see this huge build-up right before and then it really tapers off afterwards. Hardcore gamers and early adopters are already sold on your system, it's the rest of the population with money to spare that need convincing. Above all else, they must also provide release of titles in a variety of genres to cover as many consumers as possible because software sells hardware. Strong first-party releases and strategic partnerships with other publishers seems like a must at this point in order to have compelling line-up all throughout the system's lifespan.
-Carlo Delallana, Ubisoft

Hasn't this been answered years ago by the failure of Dreamcast? The main factor for success of a new console is the wide range of killer games either available at launch, or shortly after. The Dreamcast is an example of a launch that didn't have enough killer games available. Xbox did well with its exclusive title Halo. And Nintendo's handhelds have found no match in competitors so far. It is up to the console manufacturer to approach as many as big developer/publisher to work on promising titles for their next-gen systems. Another factor will be manufacturer support: development, manufacture, and distribution/marketing. Last, though with less impact are technical specs and price, as long as the price is not outrageous, consumers will purchase the console – the PS2 still sold very well, though it was more pricey than the GameCube.
-Dien Wong, Mythic Perspective

Superior Tech

Another respondent felt that is was innovative new technology and “something new” that provides that incentive for consumers to buy in.

Obviously releasing the new generation of technology first will grab the market for the tech-heads who want to see the latest graphic and hardware developments straight away. However, this will simply be more of the same from Microsoft. In my opinion, just improving the graphic, sound and multiplayer capacity of the games is not enough to win over cash strapped gamers who won't want to pay the possible £300 release price for the new Xbox. I hope what will really grab the market attention is advances in the gameplay aspects and the possibility for new kinds of interaction with your console over and above the use of a standard gamepad. In the transition from 16- to 32-bit gaming, we also had the introduction of analog directional controls, and I think people forget what a great advancement this was adding a whole new dimension of control, especially in free-roaming games. This has been developed further so now all the buttons on gamepads have some kind of analog aspect, be it the triggers on the Xbox and Dreamcast pads or the 200+ varying degrees of pressure that the DualShock2 can sense. This has allowed game gamers heightened control over their in-game character particularly in e.g. driving games, currently very popular. In this respect, I find it intriguing that Nintendo have yet to reveal the controller for their Revolution, considering the current trends set by Donkey Konga , Mario Party 6 , and the new DS system. Nintendo have proved that sound aspects can be easily and simply incorporated into games to improve the interactive experience and I look forward to seeing where they will take this with the Revolution. The possibility for more use of gyro, sound and touch-sensitivity could provide the revolution in gaming of which they are referring. If so then this will be definitely be the console I would be interested in. Do graphics need to get any better? I believe not; instead developers should be looking to branch out into new and yet undiscovered areas of interactivity and above all fun.
-Bass Ollie, DMU

With this Generation there's no Advantage to Going First

Finally and conversely, one responder felt that being first-to-market in the next generation doesn't provide any sort of advantage, and the later, more powerful machines would win out.

With the last release of consoles (PS2, Xbox, Gamecube), it was beneficial to launch first because the gaming population was hungry, even starving, for better graphics, better AI, etc. But they have been satiated. They're not done eating up the power from the present consoles. But dessert is coming around. We want all the sweet goodies that can be piled on top of a gaming machine and we are willing to wait for the best. During the last release of consoles, the last ones released had better specs. We know from the PC world that the longer you wait before buying, the better your hardware is.
-Ken Wester


[Article illustration by Erin Mehlos. Please note that the opinions of individual employees responding to the Question Of The Week may not represent those of their company.]

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About the Author(s)

Quang Hong


Quang Hong is the Features Editor of Gamasutra.com.

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