I have a cautionary tale for the leaders of the video game industry. It's intended as a warning against overestimating the competitors you know and underestimating the competitor you don't -- specifically, Microsoft.
The tale I have in mind is the story of WordPerfect and Lotus. Those two software makers went from major desktop contenders to major has-beens -- largely because they concentrated their firepower on each other, instead of practicing what Novell's Ray Noorda called "coopetition" and battling their mutual enemy.
Now, I admit I'm no great expert on video games or their industry. I've never owned a game console and have neither the attention span nor the fast-twitch muscles to be a really good gamer. I also don't like killing people, even if they're animated, or pretending to live in any time other than the present.
But I do remember a day, back in the early to late 1980s, when Microsoft's Excel and Word were third-rate apps; as I recall, Word did odd things like hiding the spell checker in something called the "gallery." Excel was likewise behind the curve. Both had relatively small market shares, and neither Lotus nor WordPerfect paid them much attention.
At that time, Lotus and WordPerfect were to spreadsheets and word processors respectively what Microsoft is now. Each company used proprietary file formats and exclusive features to lock in their customers. Distinctive user interfaces were used to further bind customers to their program of choice.
Then both Lotus and WordPerfect decided to create office suites built around their flagship programs, entering into direct competition with each other. They proceeded to generally pummel each other with abandon. At the time, it was fun to watch the two titans go at it. Only in retrospect did we realise what a train wreck that competition would create.
I'm collapsing and oversimplifying a bunch of industry history here. But the message to the game industry is pretty clear: Microsoft may not look like much of a threat today, making it easy to concentrate on your traditional enemies. But right now is when you need to rally together to counter Microsoft.
Sure, maybe Microsoft will dump the Xbox the way it seems to have let UltimateTV lapse into remission. Maybe Microsoft really won't use the Xbox to create an integrated home entertainment and information environment. Maybe Microsoft won't build a really compelling online gaming network featuring voice-over-IP and other cool enhancements.
And maybe the big game companies are already so powerful they can beat back any threat Microsoft might mount. Of course, that's what WordPerfect and Lotus were thinking at the very moment when a little coopetition -- or even direct links -- between the top word processor and the top spreadsheet would have created a most formidable Microsoft opponent.
Rather than looking forward and seeing the ultimate battle each would lose, the two companies fought each other. Maybe it was impossible to see at the time. Or if you did see it, maybe the idea of Microsoft hegemony was so far out that nobody would have understood a sudden ceasefire.
But when I look at the game industry, and especially the battles between the game console vendors, I see a repeat of what happened to WordPerfect and Lotus shaping up again -- only this time the victims will be Sony and Nintendo.
Microsoft is losing the battle of the consoles already. The problem with Wordperfect and Lotus was that they depended on Windows OS.
Game consoles PS2, Game Cube and the like don't depend on Microsoft. The X Box will go the same direction as the Dreamcast.
Already the big name game developers are exclusively omitting X Box from their most popular games.
Now that the X Box has been hacked it won't be long before you will need a virus checker and constant virus definitions updates to stop your X Box becoming infected. For on-line gaming this will be a nightmare as the XBox has a hard drive to store bad code and viruses.
Good Bye X Box