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The Story So Far

by Ed Shih - August 30, 2000, 7:46 pm PDT

An informative look at the "Next-Gen" consoles. Compare the strengths and weaknesses of each in the following editorial

The following is an analysis of the next-generation consoles based on information as of 9/00. The analysis looks ahead to Fall 2001, when the last two entrants to the next-generation console war make their debut. This is not meant to predict any winners or determine which system is superior. It should, however, lay out the relative strengths and weaknesses of the systems as well as a description of the their status as of Fall 2001.

Sega Dreamcast

Released: 9/9/99

Estimated Cost at Fall 2001: $100-$130

Installed User Base: Dreamcast has around 5 million consoles sold worldwide as of 9/00. It may not have much appreciable growth in Japan as it has had slow sales for most of 2000 and the market there seems to have passed it by. The U.S. numbers have also slowed in the first half of 2000 after a brisk launch period. The success of SegaNet could greatly increase the user base, but this is threatened by the imminent release of Sony’s Playstation 2.

Hardware: As Dreamcast will be the oldest of the next-generation consoles, it will have the oldest technology. Unfortunately, there is a significant difference between technologies which should result in decidedly less beautiful games.

Expansion: Dreamcast is fairly strong here, as it was meant to be an adaptive machine. It can utilize a broadband modem, a zip drive, and digital camera. Also, Dreamcast can be connected to a VGA monitor with excellent results.

Ease of Development: This is another strong area for Dreamcast as it has a fairly user-friendly development environment. Also, because it will have been out the longest, developers should have an excellent feel for development on the system.

Exclusive Software: Sega’s internal development teams are excellent and can provide quality, innovative software on a consistent basis. Furthermore, their sports games are often among the best in the business.

Third Party Software: This could be a point of concern for Sega. If the user base does not grow significantly in the next year, publishers are likely to steer away from funding Dreamcast projects. At best, Dreamcast would be considered a niche market. Also, developers have a natural desire to work with the latest and greatest of technologies, which Dreamcast will not be. As it stands now, publishers and developers are eyeing the Playstation2 more favorably than the Dreamcast. Also, Electronic Arts, the largest publisher in North America, has made no commitment whatsoever to the console.

Network Solution: Sega release the Dreamcast in the U.S. with a 56k modem and is ready to fully implement SegaNet, its online gaming network. The network has been up and running since 2000, though only fairly simple games have been playable until 9/00, when the proper launch of the network occurs with online sports, adventure, racing, and role-playing games in the works. Sega has opted for a narrow band solution with the choice of the 56k modem which will allow all console owners to use SegaNet and will not restrict play to those without access to broadband connections.

Marketing: Sega has always had reasonable success with it’s advertising campaigns and will strongly back the launch of SegaNet. It may also make a large advertising push around the launch of Xbox and Game Cube to keep itself in the public consciousness, assuming it isn’t already obscured by Playstation2. Unfortunately, Nintendo, Microsoft, and Sony have even more resources at their disposal and should be able to outspend Sega in the marketing department.

Unique Features: SegaNet could prove to be Dreamcast’s best chance against its next-generation competition as it will likely have been up for over a year before any of its competitor’s implement their online strategy. Sony has described an online gaming network, but it has not announced any specific launch dates and also depends on wide spread adoption of broadband connections.

Sony Playstation2

Released: 10/26/00

Estimated Cost at Fall 2001: $200-$250

Installed User Base: Playstation2 has an effective user base of over 4 million as of 9/00. Roughly 3 million units have been moved in Japan in 6 months after the system’s launch and over 1 million pre-orders have been place for the Playstation2 in the U.S. and Europe. By Fall 2001, the worldwide Playstation2 installed user base could be enormous.

Hardware: Playstation2 utilizes has a lot of power under its hood and is a technological marvel. Its potential is well above that of Dreamcast but has not yet been fully tapped. However, according to company specs, it will not be as powerful as Microsoft’s Xbox and may be on par with the GameCube. Regardless, it is a very advance piece of technology and has much potential...though it does lack a basic next-generation hardware feature, anti-aliasing.

Expansion: Playstation2 will utilize a broadband modem and hard drive in the future. It also has several other ports (USB, fire wire) which may allow for further expansion. Also, the extra ports can be used for extra controllers (as there are only 2 standard controller ports).

Ease of Development: This may very well be the Playstation2’s Achilles’ Heel. It has been reported by many developers that it is very problematic to develop for the console. Several launch titles have been delayed due to developmental difficulties. It seems that while there may be excellent technology inside the Playstation2, it is very difficult to get good results from it. In time developers may learn to tame the beast, but they would probably rather develop in the more user friendly environments of Sony’s competitors.

Exclusive Software: Here lies another potential weakness for Sony’s next-generation console. Their internal development teams have proven to be capable of delivering solid games, however they have a disturbing tendency of being highly derivative and usually lack any significant innovation. Sony does have a fairly solid sports label, particularly with football. If Square remains exclusive to Sony, their popular franchises and consistently excellent software will significantly bolster Playstation2’s line-up of exclusive titles.

Third Party Software: Third party support is one of Playstation2’s greatest assets. Almost every major publisher and developer is supporting the Playstation2 and a large number of titles, over 100, could be available within one year. Of course, the difficulty of development may slow down the output of games, decrease the quality of the software, and potentially alienate developers who do not want to deal with the pains of Playstation2 development.

Network Solution: Sony has opted to use a broadband modem, which must be purchased separately, for its future gaming network. While this should allow for more complicated games to be played online, it forces users to adopt a broadband connection. Ultimately, games are better played online via a broadband modem but Sony is depending on the willingness of its customers to go broadband, which may actually be impossible for some as not all areas are wired for broadband and may not be for several years.

Marketing: Sony will back its U.S. Playstation2 launch with a huge advertising campaign. Of course, this may not be completely necessary as they have already worked into the public consciousness with Playstation, and the Playstation2 already following in its predecessor’s footsteps. Sony is a very large company and has plenty of resources to pour into one of its main products for any marketing that may be necessary.

Unique Features: Playstation2 has a definite advantage over its competitors in that the original Playstation was wildly successful. Sony is attempting to capitalize off this by making the system compatible with most existing software and peripherals. Also, Playstation2 is capable of playing DVD movies. This is an attractive feature to those who do not own a DVD player yet. In fact, this has been a major factor in its Japanese launch. Of course, if people do not buy many games (as is currently the case in Japan), Sony will lose money (profits are made on software sales, consoles are sold at a loss) and the feature could become a negative factor. Finally, Sony has an uncanny ability to quickly copy any innovations its competitors make and may be able to negate the advantages of their competitors’ ingenuity.

Microsoft Xbox

Released: Fall 2001

Estimated Cost at Fall 2001: $200-$300

Installed User Base: Zero because the system has yet to launch and will not launch anywhere until the Fall 2001 release date.

Hardware: Xbox, according to company specs, will be the most advance of the next-generation consoles. It has been designed specifically to cater to the needs of developers. Of course, as final hardware is still in a state of flux, such specs are suspect to speculation. However, the end result should be quite impressive and well above and beyond Dreamcast and should be very competitive with Playstation2 and Game Cube.

Expansion: Few details about expansion for Xbox have been announced, though it will have a USB and ethernet ports. Also, a normal modem will be available to those without a broadband connection. Xbox will also have full HDTV compatibility.

Ease of Development: As Xbox has been designed with heavy input from various developers, game development should be fairly easy. It is almost guaranteed that Xbox will be easier to develop for than Playstation2, however, it remains to be seen how much easier it is to develop for Xbox than Game Cube or Dreamcast.

Exclusive Software: This is Xbox’s biggest question mark. While Microsoft has published some quality games for PC, it has no experience in the console market at all. Their internal development teams may be competent have nowhere near the expertise of Sega’s and Nintendo’s teams. To compensate for this short-coming, Xbox will follow the usual Microsoft solution, spending large amounts of money to buy developers or keep software exclusive. It remains to be seen how effective this solution will be.

Third Party Software: Third party software is another question mark. Xbox seems to have the backing of a good deal of American and European developers, but it does not have strong Japanese support. Also, many companies have expressed interest in developing for the Microsoft console (which has been interpreted by Microsoft as support) but have not fully committed to making games. However, a good number of developers should support the system because of the ease of development. Also, the Microsoft solution can again be applied here to insure good third party support.

Network Solution: Xbox will ship with a broadband modem. This will allow for a superior online gaming experience for all users, assuming they have broadband access. Like Sony, Microsoft is depending on wide acceptance of broadband connections for its gaming network.

Marketing: Microsoft is going to spend obscene amounts of money into launching their first console. They are one of the biggest companies in the world and can probably outspend all of its competitors...which may be necessary seeing that Microsoft is definitely not associated games, much less console gaming. Of course with all the money they may spend on marketing, courting developers, and acquiring exclusive games (not to mention the inherent loss from console sales), one wonders how exactly Microsoft will make a profit.

Unique Features: Xbox will come with an 8 gig hard drive in addition to the broadband modem. This will provide developers with unique opportunities for game development and could open up possibilities that are not possible on its competitors consoles. Like the Playstation2, Xbox will be able to play DVD movies (which I suppose doesn’t really make it a unique feature) and may very well become an entertainment machine like Playstation2. And, although Microsoft is constantly preaching that Xbox will be a dedicated game machine, Bill Gates, while unveiling the new console, described a future of computers in cars, portable notepads, and elsewhere with a central connecting device, Xbox.

Nintendo GameCube

Released: 10/01

Estimated Cost at Fall 2001: $150-$200

Installed User Base: None, as the Game Cube has not launched yet. It may have up to 1 million units sold in Japan by 10/01 if its summer launch is very successful.

Hardware: Game Cube, like Playstation2 and Xbox, uses advance technology and should be able to stand up to its competition. Just as importantly, the console is well designed and very efficient. In an interesting twist, it seems that the company specs actually understate the system’s abilities rather than exaggerate them.

Expansion: The Game Cube offers the ability to utilize either a broadband or narrow band modem, as well as an ethernet port. Also, connection to the Game Boy Advance should allow Game Cube access to a digital camera and printer. Nintendo has also included the ability to output video from Game Cube to a VGA monitor, like Dreamcast, as well as to an HDTV.

Ease of Development: Nintendo has stated from the beginning that they wanted Game Cube to have a developer friendly environment. Judging from the hardware design and word from developers, they have succeeded in making a system that is far easier to work with than Playstation2. It may be easier to develop for than Dreamcast and perhaps on par with Xbox.

Exclusive Software: Exclusive software is Nintendo’s trump card. No other company has internal development teams better than Nintendo, though Sega’s are very close. Nintendo has been putting out excellent and innovative software for well over a decade. Their game franchises excel in both quantity and quality. Also, Shigeru Miyamoto, arguably the world’s greatest game designer, works exclusively for Nintendo. As if that wasn’t enough, Nintendo has steadily been gathering an elite team of second party developers including the likes of Rare, Retro Studios, Left Field, HAL, and Silicon Knights who can further supplement Nintendo’s line-up of exclusive games.

Third Party Software: Perhaps Game Cube’s biggest concern is third party support. Nintendo already has enough exclusive titles to insure some degree of success, but real dominance hinges on third party titles. Third parties will keep a steady supply of games coming and bolster the Game Cube’s library. Since Game Cube should be easy to work with, developers and publishers should be willing to give the system a chance. Also, with a proprietary and highly secure medium, publishers may find Game Cube particularly attractive given the ever present fear of game piracy.

Network Solution: Nintendo has both broadband and narrow band modems for Game Cube. It has not, however, announced any details regarding an online gaming network. They may be waiting before committing to a network solution and will probably watch the launch of SegaNet very closely.

Marketing: Nintendo has plenty of experience marketing its games and consoles. They will definitely spend a lot of money on marketing and also have the advantage of being closely associated to video games (though not as much as before thanks to the Playstation).

Unique Features: Nintendo is in the unique position of having a near monopoly of the handheld market and they are clearly looking to leverage this by creating a strong synergy between Game Cube and Game Boy Advance. This connectivity could open up many unique advancements for developers to utilize in their Game Cube software. Game Cube will also be able to use the 64 Mb SD card which will allow for large amounts of game data to be saved. Nintendo partner, Matsushita, will likely offer a DVD player that is Game Cube enabled so that there will eventually be a multipurpose entertainment system to directly compete with Xbox and Playstation2. Also, Nintendo will offer a wireless controller for Game Cube, an industry first (though Sony and Microsoft are likely to follow suit). However, Nintendo has stated that there are other features with regard to the controller, and possibly elsewhere, that will remain hidden for the time being so they can prevent their competitors from copying them.

The Bottom Line

So what does all that mean? Well, here’s a simplified version of the above as well as the extremes in failure or success for each console...with a touch of humour.


Strengths: Established user base, excellent exclusive software, first to establish online network, low system cost.

Concerns: Slowing sales, waning third party support, significantly inferior technology, least amount of marketing muscle, stagnant Japanese market, company has not been profitable for some time.

Best Case Scenario: SegaNet is a huge success and drastically increases the U.S. and European user base. As a result, third party development is re-energized. Meanwhile, Playstation2 continues to be an inexpensive DVD player in Japan and gamers there adopt the Dreamcast as the console of choice. Sega finally consistently finds itself in the black and the Sega scream becomes a fixture in gaming again.

Worst Case Scenario: SegaNet is a flop and does little increase the user base. Third party support evaporates as a result. The Japanese market remains ambivalent to the Dreamcast which becomes a glorified dust magnet. Cinnabon wins a lawsuit against Sega and the Swirl costs Sega millions. As a result, parent company CSK decides to cut losses, Isao Okawa is forced to resign, Sega leaves the console market for good. Meanwhile, Bernie Stollar leads Mattel Interactive into a software powerhouse.


Strengths: Large third party support, excellent Japanese launch and expected early success in all other markets, excellent name recognition, plays DVD movies, should have large installed user base when Xbox and GameCube launch.

Concerns: Very difficult to develop software on the system, network strategy relies on wide scale acceptance of broad band technology, heavily relies on third parties to provide innovative software, lack of hardware anti-aliasing and limited texture RAM.

Best Case Scenario: Playstation2 has record setting launches in all other markets and continues to sell them for many months afterwards. The Japanese discover that Playstation2 can play games. Developers learn the secrets of Playstation2 development and begin to tap the systems full potential. Playstation2 then follows in the footsteps of the Playstation1 and Sony’s domination continues so that by the time Xbox and GameCube launch, they already have a stranglehold on the world market.

Worst Case Scenario: After excellent worldwide launches, console sales drop off as excellent titles are few and far between. Developers continue to struggle with the system which results in either software delays or mediocre software. Also, broadband remains a few years off from entering mainstream use and Sony’s network plans never see the light of day. Playstation2 becomes a DVD player that can play mediocre games and has an unfulfilled promise of a gaming network. Sony decides to use remaining Playstation2 parts as guidance systems for missiles. The Chinese government becomes Sony’s best customer.


Strengths: Friendly development environment, broadband modem and hard drive are included with console, may have the most advanced technology of all next-generation consoles, plays DVD movies, the Microsoft solution, solid system design.

Concerns: Internal development teams inexperienced with consoles, first entry into the console gaming market, lack of brand association with gaming, may cost the most of all consoles when it launches, potential lack of quality exclusive software.

Best Case Scenario: Microsoft’s internal development teams turn out to be incredible console developers and the Xbox launches with several excellent exclusive titles. Also, third party support is very good, thanks to an easy development environment, and many other titles are either available or in the works. With the games, excellent marketing by Microsoft, a competitive cost, and superior graphics, the Xbox is a huge success at launch and only picks up steam as time passes...and Bill Gates sets his eyes on another monopoly.

Worst Case Scenario: Xbox fails to launch with any compelling exclusive software. Third party support is not bad, but mostly consists of PC ports and some Midway games. Consumers fail to associate Microsoft with gaming and support Playstation and Nintendo because those are real game systems. PC enthusiasts jump on the Xbox bandwagon only to take them apart and install the components into their computers. Bill Gates is irate with the Xbox sales and personally buys 5 million Xboxes to improve the user base numbers.


Strengths: Superior line-up of exclusive software developers, owns many popular game franchises, very competitively priced, excellent system design, easy system to develop for, compatibility with Game Boy Advance.

Concerns: Potential lack of third party support, uncertain online network solution, no modem included with system and no hard drive add-on announced.

Best Case Scenario: GameCube launches with a great price point, several of Nintendo’s best franchises as well as solid third party support, and revolutionizes gameplay with Game Boy Advance connectivity. Also, thanks to the superior development environment and piracy-proof media, third party developers adopt GameCube as their primary development platform, abandoning Playstation2 and Xbox. Panasonic later releases a DVD player that also plays GameCube games and Playstation2 sales cease in Japan. The success of GameCube launches a new golden era of video games, especially for Nintendo. Their competitors fight for scraps and consider using cartridges for their future consoles. Hiroshi Yamauchi finally retires as he sees Nintendo back to the top.

Worst Case Scenario: Game Cube is obscured by Microsoft’s marketing and cannot get a foot hold thanks to Playstation2’s continued sales. While their games are great, people ignore them since they’re obviously for kids. Third party support never materializes nor does a concrete online strategy. Nintendo’s highly valued second parties produce lackluster software, especially Rare who incorporate Infinite Collection Theory into their games as the ultimate form of replay value. Hiroshi Yamauchi refuses to give up and has cloned bodies ready for him should he die before he brings Nintendo back on top. Yamauchi decides that DVDs were a mistake and demands they return to cartridges for the next system.

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