The war of words between Microsoft and Sony may have been top bill at the Tokyo Game Show which opened here Friday, but the show also highlighted the growth of handheld gaming and served to remind Microsoft, which will launch its Xbox console later this year, that the PlayStation 2 isn't the only game in town.
More so than ever before, handheld games were in the spotlight at the game show, which takes place once every six months. Some 35.9 per cent of computer games on display were for handheld platforms, up from 24.3 per cent during the previous show in September 2000, according to figures from the organizers, the Computer Entertainment Software Association. The recent launch of two new mobile gaming platforms is largely behind their growing popularity.
Nintendo launched its GameBoy Advance a week ago, the much anticipated successor to its 100 million unit-selling GameBoy, and in late January NTT DoCoMo, Japan's leading cellular carrier, launched a range of handsets that support Java -- a feature primarily being used at present for games. Games for mobile phones, including DoCoMo's ‘I-appli’ Java-based service and other platforms, made up an additional 5.5 percent of games on display at the show.
Sales of the older GameBoy Color have been neck-and-neck with the PlayStation 2 in Japan for several months and last week, with the launch of the new GameBoy Advance, Nintendo beat Sony for the top spot, according to data from market data provider Nikkei BP/GfK Sales Week 3200.
The competition in this sector is likely to get even fiercer in the future. Weeks after DoCoMo announced its Java platform, Qualcomm launched its own platform for games and other small programs. Just last week, Ericsson, Motorola and Siemens said they would work together to develop a common platform for mobile phone games.
While the current crop of Java-based games for cellphones can't hope to compete with handheld games like Nintendo's GameBoy Advance in terms of display quality, processor power or available titles, their emergence is likely to threaten some parts of the handheld gaming marketplace simply because so many people possess cellular telephones.
It was not all quiet on the console front, though. Microsoft chairman and chief software architect Bill Gates used the show to launch a publicity offensive aimed at winning customers away from competing games consoles ahead of the launch of its Xbox console in around six months.
One stunt saw Microsoft plaster Tokyo with posters inviting people to send a message to what was supposedly Gates' email address. A reply from Bill in perfect Japanese instructing them to check the company's new Xbox web site was the reward for anyone who sent an email. Another stunt saw a smiling Gates pictured on the tray liners at a fast-food restaurant at the game show site, holding a hamburger and an Xbox controller and asking, "Which of these two items is more tasty?"
Gates's focus on Japan, including delivering a keynote speech at the show, is not surprising. Not only is Japan one of the world's top games markets - Gates cited figures showing that a third of games revenue worldwide come from Japan, and three out of four homes here have a game system -- but it is also the home turf of Sony and its PlayStation 2.
Sony stomped into the games market in the mid-nineties with the launch of its PlayStation console and almost immediately began winning a substantial market share. The recently-launched second version of the console provides Microsoft with its toughest competition, although Microsoft will also find itself up against Nintendo's recently-launched GameBoy Advance handheld machine and the company's planned Game Cube home console.
The Xbox is based on a 733MHz Pentium III processor from Intel and includes a graphics processor produced by NVidia, 64MB of memory, a DVD drive, Ethernet adapter, four game ports and an 8GB hard disk drive.
This last component is clearly regarded by Microsoft as a key advantage for the console. Gates noted that "people still underestimate the difference it will make". Data on the hard drive can be accessed much faster than that on an optical disc and so it should free up developers from the limitation of having to store the most frequently-accessed game data in memory and thus allow much more data to be accessed quickly while a game is played - something that should enable more feature-rich games.
Sony's PlayStation 2 doesn't have a hard drive built-in, although the company, seeing the advantages that such a device can offer, is planning to release an add-on hard disk drive later this year.
Microsoft's offensive is not focused on hardware alone. Gates stressed that hundreds of developers are working on games and used the keynote to preview 14 of the titles currently under development. He also introduced Toshiyuki Miyata, games production product group senior manager at Microsoft, who now heads Microsoft's games development program and was poached from Sony.
Gates' keynote comes weeks after the industry got a vivid reminder of the price of failure in the highly competitive market. Sega threw the towel in on its games console, the Dreamcast, at the end of January after large losses on the back of sales that never managed to live up to expectations. The halting of production and liquidation of surplus consoles alone cost Sega 80 billion yen - losses covered by the donation of 85 billion yen in stock by company President Isao Ohkawa, who passed away recently.
While exiting from the console business, Sega announced its intention to focus on producing games for other platforms and this week said it would be working on 11 titles for the Xbox.
During his keynote, Gates spoke of Ohkawa as a "great man who accomplished many things" and said, "We talked many times about how to bring Microsoft and Sega together so I know he would be very happy to hear Microsoft and Sega are announcing a long term partnership."
The week also saw Microsoft announce another alliance in Japan. With NTT Communications, the Internet and long distance telecommunications arm of Japan's dominant telephone operator, it announced plans Thursday to develop an online gaming platform for the Xbox in Japan, due to be launched commercially in 2002.