If you are passionate about console gaming, this E3 may have made you think about the future of video gaming. The three major platforms seem to be moving into very distinct directions and can be easily differentiated. There was an underlying trend towards much more family-friendly group games, often mistakenly called casual games, and as an enthusiast gamer you may wonder whether you still matter and whether you may be abandoned in favor of a much greater number of general gamers. You should not worry too much. A game platform lives and breathes because of hardcore gamers and every platform needs them to survive. Sony, Microsoft and Nintendo.

Editor’s note: Our most recent article that covered consoles and suggested that one console could use a price cut was described as a “flamebait”. Depending on the platform you are rooting for and your willingness to accept other opinions, there is the possibility that this article could also be considered as flamebait. If you decide to read this article, I am kindly asking you to be open to other opinions, engage in a constructive discussion and refrain from posting comments using inappropriate language. You are entitled to disagree, but use your vocabulary in a way you expect it from others as well. Please remember that we do not tolerate offensive language and any such comments will be deleted.

E3 2010, I am quite sure, will remain in our memory for some time as the time when console gaming was recalibrated. If it is just me, then I somewhat feel that Microsoft is now aiming for a new mass market of general gamers, Sony is going after wealthy gamers and Nintendo has not quite figured out what it needs to do to answer Microsoft’s and Nintendo’s new hardware and is trying to buy some time with new games.

I won’t go into much detail about the why. Enough has been written about it and if you are interested in answers, you can find them here.

But as far as Microsoft is concerned, I remember its extensive demonstrations of Kinect and general games much more than the relatively brief demos of hardcore games. And I remember Phil Spencer’s remark that Microsoft is after not just a few dozen million of gamers, which clearly goes beyond hardcore gaming. I remember Microsoft’s near perfect presentation of Kinect. Sony, on the other side, focused almost exclusively on hardcore games and had a tough time explaining Move. Nintendo was, subjectively, a disappointment until the presentation of the 3DS: 60 minutes of game demos just did not cut it this year. For the enthusiast gamer, 2010 is an interesting year with new choices, but E3 could have left you confused.

So I chatted with Billy Pidgeon, an M2 analyst and one of the most knowledgeable people in the video gaming market I know and asked for his opinion.

Sony: Too Little Too Late?

My personal thought was that Sony may have trouble getting the necessary traction to make Move successful. Pidgeon noted that the PS3 could have used some price cuts and upgrades at an earlier point and if such cuts came now, they would be a bit late in the game. He said that 3D looks “amazing” for games and movies, but the technology is simply too expensive for the mass market. Over the past two, three years the industry told people to buy plasma and LCD TVs. Now they are asked to shell out a few thousand dollars for a 3D TV – in a time when we are still in a tough economy and another downturn may be just down the road? It won’t happen. Everyone I talked to seems to agree that a mass adoption 3D is still five years out, when TVs are below $1000 and when you won’t need extra glasses anymore to get the 3D experience. Plus, Sony’s Move is expensive. $400 for a 4-player controller system is a brave bet. Plus, Sony can’t explain Move. You really need to see it and play with it to understand it. Sony’s best opportunity at this time is, according to Pidgeon, “to make the graphics on the other consoles look inferior.” He believes that Sony may be able to grab some hardcore gamers from the Xbox 360 over time. There are few advantages to position the PS3 out of reach for many gamers, with the exception that you may be able to capture those who are willing to “upgrade”, if Sony can establish a perception of better graphics.

Nintendo: Where is Wii 1.5?

You could easily feel that Nintendo came empty handed to E3. Just games (we will forget handheld gaming in this article, even if Pidgeon remarked that Nintendo is likely to point to the 3DS every time it is asked about a Wii upgrade) just did not feel appropriate. Suddenly, the Wii feels old and you wonder whether there should be an upgrade. Pidgeon said that Nintendo hopes to ride its wave a bit longer and penetrate the market with the existing Wii further – a strategy that may or may not work out. Nintendo could already be working on a new game console, but the company has invested a lot in the current-gen console market, which it still leads by a significant margin. However, there is no doubt that a Wii 1.5, similar to what Sony and Microsoft have done, could help the company to stimulate interest and sales. Painting the console in a different color is certainly not enough. Nintendo’s real problem, however, seems to be very different and its key challenge may be the very market it has conquered: While Nintendo quoted a survey that revealed that many Wii owners intend to buy games in the future, Pidgeon noted that an “intention does not mean that they will actually buy.” The fact is that Nintendo’s typical customer, a general gamer, is not very likely to buy many games. The Wii has far fewer hardcore gamers than its rivals and hardcore gamers are the customers who actually go to stores and buy games. Pidgeon believes that Nintendo needs to strengthen its third party game sales to protect its platform, otherwise the Wii may become an easy target, especially for the Xbox 360. It is likely that this need was the reason why Nintendo focused so much on game demonstrations – to attract the attention of traditional gamers.

Microsoft + Kinect = Universal Gaming Platform?

Kinect has made, by far, the strongest impact at E3. It’s easy to understand, it’s the most progressive technology and fairly affordable at $150 for 4 players. Microsoft focused quite a bit on general gaming that may have alienated hardcore gamers a bit, but Microsoft has, in fact, not deviated from a course it has started in 2007 – to make the Xbox 360 a universal entertainment and gaming platform. Pidgeon said that Microsoft “has learned a lot” and has a good shot at taking the Xbox 360 beyond the hardcore gaming market. That, of course, would mean that Microsoft is going after Nintendo’s general gaming audience, which may be very receptive to Microsoft’s controller idea and perceive the Xbox 360 as an upgrade from the Wii. Microsoft has that opportunity, because it has a strong hardcore gamer base, which is buying games and is staying on top of new technologies. Pidgeon said that “hardcore gamers play all kinds of games” and they are likely to try and play with the Kinect as well – and draw others into the gaming experience as a result.

Hardcore Gamers: The Secret Sauce For Success

The opportunity for expansion surely is the general gaming market as the hardcore gaming segment may be close to saturation levels. Hardcore is a crowd that is moody and often difficult to keep happy. But it isn’t particularly difficult to see that it is a very attractive group that brings in the revenue through game purchases and is key to winning new gamers. As much as Microsoft is going after general gamers, it cannot afford to alienate its hardcore gamer base. Microsoft may even have to be careful not to dilute its offering with Kinect, but walk a fine path and show Kinect as an option for expansion and not as a key ingredient of the Xbox 360 gaming experience, which would open an opportunity for Sony to attract more hardcore gamers. Sony, however, is really locked out of the general gaming market with a platform that is too expensive a difficult to convey. Nintendo has very few hardcore gamers and needs to make third party games more attractive. General gamers who don’t buy many games have little value. Given its installed base, Wii games should be selling more units than they actually do.

As a hardcore gamer, you have a much higher value than before, despite the buzz about general and casual gaming. Don’t expect to be abandoned anytime soon.

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