It has been an inauspicious start to 2008 for Microsoft and the Xbox 360. Sales have allegedly been affected by production problems, though in general the trend has been towards a levelling off of hardware sales as the combination of market saturation, concerns over reliability and the greater price competitiveness of the PS3 has cut into its sales. Meanwhile, its tentative support for HD DVD came to an end, sparking all sorts of rumours and wild speculation that it might support Blu-ray in some shape or form.
That Microsoft has denied any plans to include a Blu-ray drive should come as no surprise. Microsoft's support of HD DVD was token at best and the likelihood of it handing Sony a useful PR victory by doing a deal for a Blu-ray player was unlikely in the extreme. Moreover, any comments that Microsoft as a whole has made about supporting Blu-ray shouldn't be misconstrued as including the Xbox 360, since it obviously has an obligation to support the format in Windows. Anything beyond that would be of little benefit to either party.
Target: Microsoft will be looking to simply hold off the PS3 and hope that hardware sales continue to grow. News of a price drop is clearly part of this strategy, while a proposed 60GB model will do no harm either. Other than that, it'll be hoping that its software exclusives will help drive these sales and that it can continue to strike useful deals for distributing films, TV and maybe even music through Xbox Live Marketplace - an increasingly important part of its long term plan.
Not even Nintendo expected to be in this position come 2008. Its Wii is dominating and continuing to sell every unit Nintendo can produce, while the DS also dominates the handheld space. In the short to medium term Nintendo's only real concern is milking the cash cows it has for as much as they're worth. This is easier said than done, however, thanks to the continued scarcity of high profile releases, particularly on the Wii.
Ultimately, with third party developers/publishers preferring to exploit the high margins for easy profit, quality is in short supply and Nintendo continues to bear the brunt of responsibility for supplying the console. Recent release, No More Heroes, is a step in the right direction in terms of quality, but its violence and unusual style makes it a niche title. Wii Fit and other first party titles will obviously play a key role, but Nintendo will need to show something new this year if it is to continue its current momentum through to 2009.
Target: Make more consoles, sell more games; Nintendo needs to take advantage of its success before the novelty value wears off, which will happen sooner rather than later. I'm willing to bet Nintendo will have something big to talk about at E3, either another new peripheral or even a hardware revision in a similar vain to its improvements to the DS.
That concludes my look at the home consoles for 2008. One thing that is clear is that industry is continuing to grow, a fact that'll please all concerned. Next time I'll be taking a look at PC gaming as many parties, many unfairly, predict lean times. As ever, you can share your thoughts on the forums.