Lead system architect Mark Cerny announces the design principles for PlayStation 4 at Sony’s kickoff event last week in New York City.

Jussi Laakkonen is the founder and CEO of Applifier.

The console war of today is no longer a battle between just Sony, Microsoft, and Nintendo. It’s expanded and is now a fight for hundreds of millions of players and tens of billions in global revenue across all screens: from smartphones and tablets to the PC and the living room. The iPad alone should blow past 200 million units sold in just three and a half years. Compare this with the PlayStation 2. It was Sony’s biggest hit, and it managed to sell 150 million units in 12 years.

Console manufactures are in a dire competition with smartphones and tablets, and Sony has clearly realized this. The PlayStation 4 announcement bedazzled the gamers and press worldwide, but not many noticed that the PS4 design principles “Simple, Immediate, Social, Integrated, and Personalized” have a common underlying theme.

Let’s make it like a tablet.

Simple: Consumer-oriented functionality, ease of use. Sony is looking to copy tablet-like user experiences. Can anything drive that point home better than using an image of a tablet at the PS4 launch event?

Immediate: PS4 brings a low-power standby state that you can resume games from and the capability to update games in the background. This is something we have had on smartphones and tablets for ages. Making games playable rapidly without waiting for the full download to complete is cool, but this is standard for mobile game, where you grab the first 50MBs of the game, get going, and it adds in content from the servers on the fly.

Social: Always-on hardware video encoding/decoding for live video streaming, a share button on the controller to share screenshots and video replays across Playstation Network, web and Facebook. Share your live video stream and spectate friends’ or celebrities’ gameplay. These are really cool features and will make playing on PlayStation 4 a lot more social. Yet you can get all of it already on mobile phones and tablets. Similar video hardware has shipped in hundreds of millions of iOS devices. My own startup, Everyplay, is powering easy video sharing for mobile players. Other mobile startups are innovating at break-neck speed to build rich social features. Once the pioneer, but now-shuttered Openfeint, provided GameFeeds similar to PS4’s planned features. Heyzap is building gamer profiles and multiplayer functions. Industry giants DeNA and Gree have both built gamer-oriented social networks. PlayStation 4 is doing the right thing bringing these features together as a platform standard, but a walled garden like the PlayStation 4 will always be playing catch-up to the innovations of an open ecosystem like iOS and Android.

Integrated: Connecting to third-party devices and services. Watching PlayStation 4 game replays on a smartphone or on Facebook. It’s great to see Sony opening up and connecting the PlayStation to third-party services and devices like smartphones. Unfortunately, every integration will have to go through Sony’s rigorous approval process, so don’t expect rapid support for Tumblr, Pinterest, or “name your favorite new social network” here. Although a very welcome feature, this is just table stakes in 2013.

Personalized Social feeds of gameplaying, real-world identity, connect with your Facebook friends, get recommendations based on what kind of games you like and dislike. Gamers can expect a built-in “Facebook for games” focused on rich media like video streams. PlayStation 4 will have players hanging out together and talking about their gaming experiences. Mobile offerings like Mobage from DeNA, Playphone’s social platform and Gree’s platform are all attempting to build similar, fully fledged gaming networks while focused services like Facebook’s App Center for game recommendations and Everyplay for game replays provide solutions for individual gamer needs. Recommendations and social proof of what friends play will do a lot to improve discoverability in the PlayStation Store. Sony’s taken what works on social and refined it to make it their own.

Good job, Sony, but the gaming revolution isn’t being televised

I’ve worked on console, social and mobile gaming. My first console was a PlayStation 2, and I’ve got a soft spot for Sony. They get games. PlayStation 4 seems to have the performance edge over the specs leaked about the so-called Xbox 720. It’s clear from the PS4 launch that Sony is serious about getting on with the times and is looking at how people play today on mobile and bringing that experience to the PS4.

Still, the gaming revolution is not being televised. The plastic boxes sitting below TVs led the gaming industry’s growth for nearly two decades, but now the big screen is fading just as the mobile screens are exploding. While Sony may, if lucky, get to 100 million PS4 units sold in the next 10 years, I expect the tablet user base to crack a billion in less than five years as tablets replace PCs. It has taken less than six years for smartphones to blow past that magical billion units, and all signs point to tablet shipments accelerating faster than smartphones.

Sony. I like what you do. Guess we both agree that the future of gaming is in mobile.

Jussi Laakkonen is the founder and CEO of Applifier and has spent the last few years in helping small and medium-sized game developers grow their games. As the leader of what the press dubbed “the rebel alliance,” Jussi rallied Facebook game developers together with the original cross-promotion network and grew it to reach over 150 million monthly active users. Jussi & Applifier are now focused on building authentic social discovery for mobile games with Everyplay, which lets players share their most memorable game replays with friends and fans. You’ll find him tweeting from @jussil about games and entrepreneurship.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Kids these days, with their Ruby on Rails and their JavaScript. When your dad was coming up, programming was something you did with punchcards and a suit and tie. And when I was coming up, getting schooled by cranky goths on my first Linux box, programming was something you did from the command line.

Learn-to-code company Treehouse is getting back to basics with a command line course that will restore any amount of nerd cred you may have lost and school you to code from the console like a true neckbeard (or honorary neckbeard, for those without the hormones to grow a truly lush face-mane).

“You may come across a tool that has only a command line interface, or you may need to access a server using the console and SSH,” writes Treehouse instructor Jim Hoskins today on the company blog. “Console Foundations is here to familiarize you with the power of the console.”

The coursework will include high-quality, professional-grade video instruction (as is Treehouse’s specialty). But the gang also cooked up something unique to get devs comfortable with coding on Linux terminals.

“So what if you don’t have a Linux computer to follow along on?” Hoskins continues. “Worry not. For you, we built the Treehouse Command Line, a console you can use right from your web browser that gives you access to your own Linux computer that you can safely learn and experiment with.”

And since Treehouse Command Line is an entirely separate computing entity, you don’t have to worry about accidentally wiping your hard drive or destroying files your computer needs to operate or what have you.

Here’s a peek at the Treehouse Command Line and other instructional materials from the course:

Treehouse also teaches a slew of other topics — such as HTML basics, PHP, WordPress programming, web design and business fundamentals for startups and mobile development for would-be app billionaires.

It also recently announced it was piloting a program to bring its unique tools into high schools in order to help underserved kids have a better shot at getting better jobs after graduation.

The House of Mouse’s next big splash into video games could be in producing its own home console, according to a patent application filed by Disney.

The patent application, which was filed over a year ago but only recently flagged by the USPTO, describes a device that would allow people to presumably play augmented reality games while wearing a set of 3D glasses. Theoretically, the device could finally transform inanimate objects lying around your house into animated characters with facial features and such. Or in other words, you could create your own Beauty and the Beast, complete with talking clocks, candle holders, and tea pots.

Here’s the official summary of what the device will do from the application itself:

“Techniques for displaying content using an augmented reality device are described. Embodiments provide a visual scene for display, the visual scene captured using one or more camera devices of the augmented reality device. Embodiments adjust physical display geometry characteristics of the visual scene to correct for optimal projection. Additionally, illumination characteristics of the visual scene are modified based on environmental illumination data to improve realism of the visual scene when it is displayed. Embodiments further adjust display characteristics of the visual scene to improve tone mapping output. The adjusted visual scene is then output for display on the augmented reality device.”

From the images included in the application (shown to the right), the device would have to main components: a handheld console that looks quite similar to Nintendo’s DS or 3DS and a set of 3D glasses that would communicate with the device.

But before you start saving money for a mouse ear-shaped next-generation gaming console, it’s worth noting that the device may never actually get made. Back in October, Disney said it planned to focus on mobile and social games rather than high-end consoles and PC releases. Also, Disney filed this patent application in June 2011. At that time Disney may have had a stronger interest in console gaming.

Still, Disney is obviously up to something interesting.

Via Cnet

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Check out all of GamesBeat’s Nintendo Wii U launch coverage.

Reviewers found a lot to love about the Wii U. They praised its high-definition graphics as well as the GamePad, which is comfortable enough for young children. As GamesBeat’s Jeff Grubb reported, gamers rushed to scoop up every available console.

The major complaint they found was the lack of battery life, which typically only lasts three to five hours. Read our round-up of the first reviews here.

But a few reviewers did far more than test out the console and play a round of virtual tennis — they went ahead and took the entire thing apart to expose the logic board. Here’s a snapshot of what they found:

• The Wii U hardware is similar looking to the larger Wii. Getting inside the chassis isn’t all that different.
• You’ll need a stack of razor blades to pry off the IHS.
• It only takes half an hour to tear down the Wii U and put it back together.
• IFixit’s expert DIY team was able to improve Nintendo’s design by three or four screws and one square nut.

Check out the detailed teardown descriptions of the Wii on iFixit and Anandtech.

Top image via iFixit 

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Console gamers like to think they’re committed to their favorite games, especially those that absorb us in a massive world and tell epic stories. It’s also not a stretch to say that they’re willing to stick with a hard game that tests their patience and skills. But that’s not how many people see mobile games. They’re good for a quick play session on the bus or at lunch, not countless hours of investment … right?

Maybe not. Evidence suggests that mobile players may be putting in more hours than we realize.

Trent Oster, the director of business development at Beamdog, perceives a crucial difference between the two platforms. He told GamesBeat that he expects play session durations for the PC/Mac version of Baldur’s Gate: The Enhanced Edition (out Nov. 28) to exceed that of its tablet counterpart, but he does predict more total play sessions on tablets.

“It will be interesting to see what the reality is,” he said. ”Personally, I find I’ll do longer — three-hour or more sessions — on my PC, but I’ll usually only do 30-45 minute sessions on the tablets. However, I did play three hours with the iPad Mini the other day. The lightness of the little unit made for a pretty relaxing play session.”

How comfortable we are with technology makes a big difference in what we play and for how long. Jesse Divnich, the vice president of insights and analysis at video game research and consulting company EEDAR, told us that console game completion rates haven’t changed over the years: only 10 percent to 20 percent of consumers complete any one game.

“At least within the HD market, when a consumer spends $60, you can at least count on them dedicating at least five hours before complete disengagement,” Divnich said. “In the mobile/tablet space, the time for a game to get its ‘hooks’ in is rapidly condensed. The window of opportunity to get a user addicted to your title is measured in minutes, not hours or days, and it remains a constant problem for independent developers.”

But mobile gamers now dominate over hardcore gamers, growing from 9 percent to 22 percent of the gaming community since last year, according to the NPD Group in September.

Mobile gaming may have boomed in popularity over the last year, but who’s more dedicated to their games: console or mobile players?

Mobile analytics firm Flurry compared console gamers’ investment to that of “midcore” and “hardcore” mobile gamers — the most similar groups across platforms in terms of gaming habits — who played their games for longer than a week (a bar of about 20 sessions). Peter Farago, Flurry’s VP of marketing, and Patrick Minotti, the general manager of games publishing, told GamesBeat in a phone interview that the results surprised even them.

Minotti said that a popular mobile game generates 20-plus minutes of average playtime per day. A more immersive one might tally 45-plus minutes of average playtime per day.

EEDAR’s statistics seem to agree: Divnich added that the average mobile/tablet consumer plays a new game only once every day, for about 23 minutes, and total disengagement tends to happen in two days. The average mobile game sees 46 minutes of playtime before it’s dropped entirely.

“The opportunity cost to try another game is incredibly cheap and in most cases free, so it is very common to see consumers blow through several games before resting upon one they plan to dedicate significant time to,” said Divnich.

But Flurry reported that with midcore and hardcore games, 40 percent and 10 percent of players, respectively, spend upward of two to three hours a day with a game.

An example of a midcore game might be CSR Racing, which looks hardcore but is simpler and more casual in its gameplay, explained Minotti. A hardcore game might be Rage of Bahamut, a trading-card game.

“Out of the people who will download that game, only 10 percent to 15 percent are actually going to play that game more than a week,” he said. “And that’s because a hardcore game is typically going to ask more from its users from the beginning. … It’s going to require more attention.”

These “engaged” users can spend between 10 days to 180 days, if not more, playing their favorite titles — easily clocking in more than 100 hours or even 200 hours overall. Now consider how only a small fraction of console gamers are finishing games that require anywhere from 15 hours or 80 hours.

“I was surprised that there was a group of people who would spend more total time in a specific mobile game than they would in a console title,” said Farago.

Flurry concluded that because these are immersive games, people will play a little longer than the average in more sessions throughout the day — and they can do it anywhere. Compare that to a console game, where people might sit down in front of a television and play for only two consecutive hours.

Another reason has to do with the mechanics — it’s easier for players to come back to a game on mobile, increasing the frequency at which they play. But regular content updates are also important, and they’re cheaper and easier to produce for mobile than console games. They’re also a lot more accessible, and they encourage gamers to continue playing.

“I think the distinction that we’re making,” said Farago, “is that it doesn’t mean that a small-screen game that you play portably on your iOS device or Android device is any less immersive or entertaining than something you play with surround sound in your living room with a dedicated controller that has 14 buttons and a huge 52-inch flatscreen TV.”

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

It’s been a big two days for the Ouya console. Less than eight hours after its Kickstarter listing debuted yesterday, the open-gaming console smashed a record for the crowdfunding site by pulling in $1 million faster than any previous project. And today, it surpassed $3 million as GamesBeat interviewed its designer, Yves Béhar.

We posted our exclusive interview with Behar earlier today. Here’s GamesBeat’s Kat Bailey talking to the noted designer about “The People’s Box.”

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Ouya will have a “high-concept developer ecosystem that’s as free as can be,” The Verge said. The startup behind Ouya claims every customer who buys a retail box will get a software development kit, giving everyone the capability to publish games on the platform. The aim is to disrupt the console business by giving a path for indie game developers to reach gamers more easily and directly.

The console will reportedly connect to your TV. Its sleek look is the work of designer Yves Behar, the chief creative officer of wearable technology company Jawbone and designer of the One Laptop per Child XO laptop. Ex-IGN executive Julie Uhrman, former Vice President of Game Publishing at Microsoft Ed Fries, and Lab126′s Muffi Ghadiali are also allegedly working on the project.

GamesBeat 2012 is VentureBeat’s fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry’s latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your tickets here.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

About 1,231 British gamers took part in the study designed to discover more about their playing habits. Just under two thirds of those surveyed claimed to feel “addicted” to playing video games. When asked to elaborate on how video games fit into their everyday life, 42 percent admitted they often miss out on social occasions in order to play video games, while 82 percent admitted they regularly missed out on sleep as a direct result of their gaming.

When asked if they thought they could easily give up playing video games, 51 percent said, “No.”

Playr2 founder Simon Kilby, a gamer himself, can empathize with the study’s findings. He admits he’s often put important things off to continue playing his favorite titles and, although it may not count as an addiction in a medical sense, he feels with certain titles that he couldn’t wait to finish what he was doing to get back to playing. “I’m only surprised that Skyrim didn’t top the list, because I don’t know a single player who hasn’t become entirely engrossed with the game,” he said.

According to the study, the top 10 “most addictive console video games” are:

1)      Call of Duty: Modern Warfare 2 – 73 percent of gamers who said they’d played said they felt “addicted” to it

2)      The Elder Scrolls V: Skyrim – 70 percent

3)      Halo 3 – 68 percent

4)      Final Fantasy VII – 63 percent

5)      Grand Theft Auto IV – 58 percent

6)      The Elder Scrolls IV: Oblivion – 56 percent

7)      The Sims – 55 percent

8)      Red Dead Redemption – 46 percent

9)      FIFA 2012 – 42 percent

10)   Tetris – 39 percent

“Looking over the list of console games, it’s not hard to see how people are so easily drawn into them,” Kilby said. “Although a number of the top ten have open-ended multiplayer modes that could keep you playing for hours on end, it’s great to see titles like Final Fantasy VII and Tetris in there, which are clearly loved for other reasons.”

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

The company says more than 800,000 of the 960,000 consoles sold this week were sold within a period of 24 hours. More than 750,000 Kinect sensors were also sold this week, both bundled with the 360 console and as a standalone product. The current holiday sales season is critical for game companies, as 40 percent to 50 percent of game revenues are generated in November and December.

Retailers like Best Buy see these sales figures as a testament to the continued popularity of gaming. “Xbox 360 was among the best-sellers at Best Buy this Black Friday,” said Chris Homeister, senior vice president and general manager of Home Entertainment at Best Buy. “We have seen tremendous excitement from customers for our hot holiday gaming offers.”

With a robust holiday portfolio, an updated Xbox Live dashboard and the launch of Xbox Live’s new TV service on Dec. 6, Microsoft says it expects the holiday momentum to continue, driving Xbox 360 to finish the year as the number one console in the U.S.

Nintendo announced earlier that its flagship games The Legend of Zelda Skyward Sword and Super Mario 3D Land sold more than 500,000 units each through the Black Friday holiday.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

“Note: Saved data on this software cannot be reset.”

It’s rather inconspicuous, in tiny print on the back of the game cartridge. But that tiny “feature” present in Capcom’s latest game — Nintendo 3DS title Resident Evil: The Mercenaries 3D — is a huge slap in the face to gamers that like hunting down old and classic games.

The game automatically saves game data after players beat Resident Evil: The Mercenaries 3D. That means any extra goodies players get for beating the game — like some over-the-top powerful weapons, costumes or cheats like those common in Capcom games — will always be available on the cartridge. It’s a move designed to discourage gamers from going out and buying a used copy of the video game.

Developers have been trying to crack down on used game sales. Some game developers, BioWare for example, force gamers to purchase access to separate networks in order to download new content like guns and maps if they buy a used copy of a game. Other companies, like Half Life developer Valve, have switched to a digital-distribution model that lets gamers download games directly and makes it impossible to sell back the game when they finish playing it.

Used game sales are a huge business for several companies – the largest of which is video game retailer Gamestop. That company gets around 31 percent of its video game sales from buying back and re-selling used video games. Gamestop CEO J. Paul Raines and others can say digital distribution isn’t an insurmountable threat, but it’s still putting pressure on earnings as traditional console game sales slow down.

But what Capcom is likely not considering with this “feature” is what will happen a decade or so down the line, when the company stops printing the game and some gamer somewhere suddenly gets the urge to play it again.

I was feeling rather nostalgic recently and jumped onto Amazon to purchase a Dreamcast — Sega’s swan song video game console — and a whole host of games. Most of the games I purchased, like Sonic Adventure 2 and Soul Calibur, have been out of print for a while. So I had three options: pay an extreme price for a new copy of the game, steal it off the Internet or purchase a used copy of the game. I went with option three.

Now imagine, 10 or 20 years from now, the game is out of print. But on the off-chance Resident Evil: The Mercenaries 3D was a masterpiece, you might feel nostalgic and hit a site like Amazon to purchase a copy of the game and a Nintendo 3DS. You’re presented with those same three options again. Given the cost of new copies of classic games — Soul Calibur costs around $90 for a new copy and around $10 for a used copy, for example — you’d probably go for the smaller price tag.

The game finally arrives in the mail and you eagerly throw it into your old Nintendo 3DS. Then you realize your character is already carrying around a rocket launcher with infinite ammunition. Or you find out that you can’t access some early content because someone already cleared through it on the cartridge. You’ll never be able to experience an absolute fresh start unless you shell out all that money for a fresh copy of the game.

Capcom is also forgetting one other little detail — there are more than just a few gamers in the world, and a lot of them are friends with each other. I personally share games with a lot of my friends and I have saved a lot of money by trying out games before I go out to buy them. Sometimes I will play through a game I borrow from a friend — like Heavy Rain, for the PlayStation 3, for example — before I go out and buy the game on my own. But it’s critical that I get the “fresh start” experience, otherwise it ends up ruining the whole game.

One Nintendo DS game already did something similar to this, and the experience was terrible. The World Ends With You, a role-playing game developed by Square Enix, featured only one save game slot. While you could delete the game and start from scratch, the individual I borrowed it from didn’t want me to erase the game because he had already invested around 60 hours into it. It still let you start the game over from the beginning, but even after intentionally weakening your character it was easy enough to blast through the game because of all the advantages beating the game brought with it.

Digital distribution seems to work fine, because those games are always available as long as the company continues to deliver them. Steam, Valve’s digital distribution service, is particularly good about keeping old games up for sale. For example, gamers can go in and buy a copy of Deus Ex, which came out more than a decade ago. I’m playing through that game again for at least the 100th time ahead of the release of Deus Ex: Human Revolution, and it still feels great even starting from scratch.

Resident Evil: The Mercenaries 3D comes out on Tuesday. But I didn’t go out and purchase The World Ends With You, and I can’t imagine I’d want to purchase Resident Evil: The Mercenaries 3D either.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

The news indicates the new Wii U system may not have enough power under the hood to handle simultaneous touch input from several controllers. With that in mind, it’s also questionable if the system itself will be that much more powerful overall than the original Wii.

“Our basic premise is that you can use one with a system,” Miyamoto said in an interview with news.com.au. “If we got to an idea of having multiple, it might be just more convenient for people to use their Nintendo 3DS and have a way to connect that. That being said, we are doing research about if someone brings their controller to their friend’s house and they want to play together on Wii U to whether or not something like that would be possible.”

The Wii U will be released sometime in 2012 and at this point, it’s still an unfinished product, which is why the company relied on footage from PlayStation 3 and Xbox 360 games in putting together game footage for its Wii U announcement. Nintendo hasn’t released the specs of the machine. There’s no guarantee that Nintendo won’t bump the console’s specs or create a way to use multiple touch-screen controllers effectively.

As a gamer, I want to see what a developer could do if it had four separate screens people could play while interacting with a large TV screen. For instance, I’d love to see a first-person-shooter on the Wii U with four separate touch-screen controllers playing at once so no other players could see my location.

Now that the Wii U’s concept has sunk in, what do you think of the system? Are you satisfied with what Nintendo has put forth so far or are you looking for more from the console?

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

The Japanese game company has ruled this product generation of consoles with a majority market share ever since it launched the innovative motion-sensing Wii controller and its system in 2006. Because of that popularity, Nintendo has been much slower to cut prices on its console in this generation.

Word of the price cut from the $199 price leaked out last week, so it makes sense for retailers to sell it for the lower price now. Otherwise, Wii sales would dry up as consumers wait for the lower price. Nintendo hasn’t commented yet.

This is the first price cut since September 2009, when Nintendo cut the price from $249 to $199. Target is rumored to be cutting its price on Monday.

And this will likely raise speculation that Nintendo plans to announce a new console to replace the original Wii at the E3 trade show in June. The rumored price cut was to sell the console for $149, so the $169 price is a bit of a surprise.

Michael Pachter, an analyst at Wedbush Morgan, said in February that all three console makers would have to cut their prices this year as demand starts to fade. Nintendo has played the pricing game masterfully in the past. It debuted the Wii at $249, much lower than the initial $599 price for the PlayStation 3 in 2006 and $399 in 2005 for the Xbox 360.

With a cheaper and more innovative console, Nintendo stole the No. 1 position from Sony. To date, Nintendo has sold around 86 million Wiis, compared to 53 million Xbox 360s and 49 million PS 3s. Nintendo has also dominated in handhelds, selling 147 million DS units versus 67 million PlayStation Portables.

Now we’ll see if Sony and Microsoft respond with their own price cuts.

In the last year, Nintendo sold about 7 million Wiis in the U.S. in 2010, compared to 9 million in 2009 and 10 million in 2008. In February, Microsoft sold 535,000 Xbox 360s while Nintendo sold 454,000 Wiis.

It’s natural for the console makers to cut prices over time. The machines are expensive at the outset, since the designers cram as much new technology into them as they can. Sony and Microsoft did this so much that they sold their initial machines at a loss, hoping to make up for that with game sales. Nintendo, on the other hand, has usually priced its hardware to make a profit.

As Moore’s Law (the capacity of a chip doubles every two years) progresses, the console makers can produce the same chips in their machines for a lower cost. So they can reduce the number of parts inside the consoles and cut prices.

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---