Business Blog: Hoover’s Business Insight Zone

Here comes Halo 3 — but what does it mean for Microsoft and its Xbox 360 gaming console?

Since the inner workings of the video game business sometimes escape me, when I read pieces like this . . .

Microsoft may form Halo of profit over entertainment unit

. . . I often turn to my Hoover’s editorial colleague Chris Huston for his take. Here’s what Chris has to say about the likely impact of the blockbuster Halo 3 on Microsoft’s fortunes.

Well, it will be a success regardless of all the other question marks. I think it could even be looked at as a strategic success even if it doesn’t significantly boost console sales, which I don’t think it will. Most people who want to play Halo are probably avid enough gamers to already have an Xbox.

I think it’s a mistake to rely on one title, however big it is, to be the Messiah for any console company. It seems like analysts are putting it in that role more than Microsoft, to Gates and Company’s credit. Sony, in its heyday, (wow, am I already thinking of them as out of their heyday?) didn’t just have one killer exclusive, they had many: Final Fantasy, Gran Turismo, Grand Theft Auto, and Ratchet & Clank to name a few. Microsoft has Halo and maybe, one could argue, Project Gotham Racing – they don’t have enough.

But at this HD transitional period in consoles, neither does Sony anymore. If Microsoft can get the same kind of bastion of must-have exclusives as Sony did in the PS and PS2 days BEFORE Sony can regroup and establish its own arsenal of killer exclusives, they will have a good shot at taking the throne.

Even as crippled as Sony is right now on a number of fronts for the PS3 (e.g. online community, siren-song titles, price point) it will be a very tough thing to pull off. It will take more than a Halo to get to those pearly gates.

Sounds good to me. In particular, I think Chris is right to emphasize how the console business as a whole — or at least the part of it where Sony and Microsoft compete — is going through a strategic shift to high-definition (HD) technology. In a year or two, there will be many more key titles that take full advantage of the technology, and it’s hard to imagine that Nintendo’s Wii will still be lapping the Xbox 360 and the Playstation 3 at that point. But the question remains: how many of the best games available then will play on the Xbox 360, and how many on the Playstation 3? How Microsoft and Sony navigate the path from here to there will dictate much about the success of their gaming ventures.