So I finally was able to close the loop on the next generation gaming consoles by receiving the XBox 360 as an X-mas gift this past holidays. Already the owner of both the Wii and the PlayStation 3, I’m now the owner of all 3 next generation gaming consoles on the market today.

So with that ownership, I’m able to give some early observations on the different console systems especially between the PS3 and the XBox 360. Currently the market leader is the Wii (in terms of global sales), and while I think Nintendo has done a great job with this console, I do consider it totally different from PS3 and the XBox which are more of the traditional hi-tech gaming systems. And with that, I feel the PS3 and XBox are more close to being competitors with each other then the Wii. I think Nintendo really expanded the market for gamers, which I label the ‘casual’ or ‘family’ gamers – people who wouldn’t play the games on the XBox or PS3 but was attracted to the game controllers and the games the Wii sells (ie Wii Sports, Wii Fit, etc). The XBox and the PS3 usually sells to the same sort of gamer – high end graphics, realistic gameplay, networked gameplay with others, and blockbuster hits.

So with that my first post on the next gen consoles is going to discuss my thoughts on the XBox vs the PS3 in terms of the 3 traits each gaming console is broken down to – hardware, software and the games. Since I just got the XBox, I can’t really talk about the games yet but definitely can make some observations on the hardware and software.

I brought the PS3 when it first came out 2 years ago. As an early buyer of the system I knew I would suffer from a crappy game library which all game consoles go thru when they first come out. It takes a year or so for the game developers to get familiar with the new system and start selling games that work well on the new systems. As the systems like the PS3 and XBox get more complex, it takes longer for developers to get up to speed to build those games. I was very interested in the Blu-Ray drive that all PS3 consoles come standard with and also to play with its new operating system. Two years later and the hardware is still impressive. Out of the box the PS3 comes standard with many features including: built in Wi-Fi, built in hard drive (that can be easily swapped out for bigger ones), wireless controllers, Blu-Ray disc drive, 1080p resolution capability, and SD memory slots. The software (the main PS3 operating system) has had many updates over the years and now boosts many cool free features including PS Home, their version of “Second Life”. Additionally with the Wi-Fi features of the PS3, you can play networked games for free and have messaging/browsing capabilities from the PS3 (the browser does suck though, and would never use it for traditional web browsing). And of course they have their own marketplace where you can buy movies and games and download them straight to your console (hence the need for the hard drive).

Sony made a business decision to pack in the latest technologies into the PS3, so even at the end of its life cycle, it will be very up-to-date and technology wise very capable. This has lead to the biggest ‘achilles’ heel of the PS3, which is price. Currently as of this writing, the PS3 is still the most expensive console on the market at $399.00. This is the lower model, with an 60Gig hard drive. And with that, the PS3 is in 3rd place in terms of global sales, which is very surprising considering it was by far the market leader in the previous game console generation (Playstation 2).

For games, only at this time has some truly great games been coming out for the PS3. Some hits that came out this past year include Grand Turmiso 5, Grand Theft Auto, Fallout 3 and the breakout hit of the holidays “Little Big World”. The graphics and gameplay are superb on the system and easily matches or out-does graphics being rendered on the XBox (and it should, the PS3 has some serious computing power).

The XBox, while competing with the PS3 in terms of the gaming and technology is very different in build and business strategy. Microsoft, after getting killed in terms of sales on their first version of the XBox, wanted to be first to market with the current gaming consoles. So to get a lead (and they were first to market by a full year), they really cut corners to reach the market with a new console. To be blunt, the XBox is a cheap piece of hardware. I received the bottom basement system called the “XBox Arcade”. This was priced at $199.00, and is now the cheapest next gen system on the market. Microsoft priced it so to move units this holiday season and it seem have worked, increasing their sales (but still not able to beat the Wii in overall sales during the holiday season).

Now I’m briefly only going to mention the ‘ring of death’ issues that the XBox is notorious known for. By some accounts, over 20% percent (or higher) of XBoxs fail or basically are broken completely. This state is know as the ‘ring of death’ – called when the light ring on the front of the console all light up bright red and indicates you now have a very expensive paper weight. Microsoft knew about this issue and stonewalled consumers for the first two years until finally acknowledging the issue and promising to fix for free or give new systems to customers. To learn more, just Google ‘Xbox ring of death’.

So knowing all of that, and the the fan issue (the fans on the system are LOUD), I was still very surprised on how cheap and inferior the hardware was when I took the Xbox out of the box. The Arcade version is just the basic system and doesn’t have a hard drive (the next system up for $100.00 comes with a hard drive). The wireless controller is battery operated (on the PS3 you can re-charge the controller by USB cable to the system). It will play DVD movies but no next gen disc player (Microsoft supported the losing format – HD-DVD). There is no wireless card so you will need to plug in a ethernet cable to get online (Both the Nintendo DS and Wii has wireless, and the DS is only $100.00). It was amazing how Microsoft got away with all of this. While the PS3 is more expensive, you see where the money is, with the XBox, it totally feels like an PC computer wrapped up in a better aesthetic looking box.

For software, Microsoft really shows its strengths. After all Microsoft first and foremost is an software company and their new operating system is slick, smooth and fun to use. I was impressed by the interface which sort of copies the Apple ‘coverflow’ look and feel but works very well with the needs of the gaming system. Unfortunately to get the most of the system you will need to sign up for a $50.00 an year membership with XBox Live. This will allow you to play networked games, and download certain content. On the PS3, its all free. More annoying is the need to buy Microsoft credits (their monetary payment system). Basically everything is converted into Microsoft credits – movies, games, demos, etc. But the problem is there is no 1 to 1 relationship with dollars and Microsoft credits. You need to buy a bulk number of credits to then use to buy your goods. So basically Microsoft forces you to buy more from them, even though you only needed less to buy the item you wanted. Example for Apple iTunes, I know a song I want is a dollar. I pay 1 dollar for the song and download. For Microsoft, the song I want is an dollar also, but I will need to buy $5 worth of Microsoft credits to then spend only $1 to buy that song I wanted. Its sort of sketchy.

Now the biggest issue I have with the Xbox is the a la carte system they have. As I said, PS3′s biggest issue right now is the price. But after owning the cheaper priced XBox, I realize that Microsoft is committing one of the biggest scams in the consumer electronics world (and getting away with it). If I wanted to make things apples to apples, or at best add the items that I need to get my XBox running the way I need it to fit my gaming lifestyle, here is what I started to realize: In the long run, the XBox is going to cost me alot more then the PS3.

Let me begin. So I have a wireless hub at my house, and will need the XBox to get a wireless connection if I want to go online. Well an wireless adapter sold by Microsoft for the XBox is $100.00. Yep, you heard it, $100.00 to add wireless connections to your XBox (in the PS3, its built in with the price). Now I figure I do need an hard drive for the XBox. They come in 3 configurations: 20, 60 and 120 gigs. Well for the 60 Gig drive, we are looking at $90.00 brand new. So already we are now at the cost of $400.00, which the PS3 is coming in at. Add in the cost of the XBox Live membership, which is $50.00, and now you are spending more then a comparable PS3. And this is still not including any sort of next gen disc player that the PS3 also has built in.

After talking to fellow XBox owners and my regular sales staff at the local Gamestop and they all agreed Microsoft was milking their consumers with this pricing model. But you know what, it is working cause even with the ‘hidden’ price points, the ‘ring of death’, the absense of an next gen disc player, the XBox is selling well.

In summary, the XBox has alot of things going for it, including something I did not mention before, a large library of games (more so then the PS3). But with someone who can definitely compare the two systems as an owner, I’m a bit stunned by some of the attributes and business decisions Microsoft has made with the XBox. While I’m happy with my PS3 (but not estatic — they will need more killer games in the future to make me in that state), I’m treating the XBox as the gift it was. Currently I can say I would not have brought the XBox with my own money if it wasn’t an gift, while with the PS3 I would have paid my own money.

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