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Summary:

The latest skirmish in the console wars took place this weekend, at the Mission District’s ultra-hip Foreign Cinema. That’s where Microsoft offered the gaming media a hands-on media preview of Halo 3, one of gaming’s most anticipated titles— and the company’s bid to expand their broadband […]

sm_h2_chiefandodsts.jpgThe latest skirmish in the console wars took place this weekend, at the Mission District’s ultra-hip Foreign Cinema. That’s where Microsoft offered the gaming media a hands-on media preview of Halo 3, one of gaming’s most anticipated titles— and the company’s bid to expand their broadband audience.

Make no mistake about it, though the PS3 trails far behind and the Wii isn’t a direct competitor, the 360’s position as the HDTV-powered next gen champ is far from assured. The console has sold 10 million units to date since first launching 18 months ago, and claims six million online members to its Live service. It is hard to say how many of those are paying members, and how many are part of trial or some giveaway.

Still, those numbers are impressive, but just to put them into perspective, 10 million 360 owners represents only 6% of the total number of consoles sold last generation, and six million registered online users is tiny in comparison to the total gaming population. Granted, it’s still very early in the traditional 5 year life cycle of consoles, but the trajectory isn’t promising. Despite Xbox Live boasting the largest online console community to date, it doesn’t appear to be gaining ubiquitous traction, at least not yet.

Enter Halo 3, the jewel in their gaming crown, and the franchise the company hopes can not only boost online membership to higher levels, but bait gamers into purchasing additional downloadable content such as movies, music, TV shows, and episodic game content.

Of all 360 exclusive titles, Halo 3 is the one best positioned to do that.

How well did it succeed? We attended the Microsoft’s event at Foreign Cinema where we were treated to an open, hands-on session. The party atmosphere wasn’t very conducive to intimate gaming, but the game experience is classic, proven Halo. It plays slightly faster than previous editions, which makes frenetic gameplay situations that much more intense. There’s new vehicles and weapons, including a sweet cannon turret and missile launchers that slow down your player, but spew massive damage on your enemies. I especially liked the ginormous laser blaster with equally imposing damage. Microsoft showed off three new multiplayer levels, two of them set in two, outdoor environments, lush but limited in expansiveness. The other map was an annoying sandpit level reminiscent of Return of the Jedi. Overall, the visuals were a bit underwhelming, at least in their current state.

“It’s not going to win any awards,” said one attendee at the event, accurately critiquing the game in terms of innovation. In market terms, this suggests a game that’ll keep its existing audience, but probably not do much to expand it. Or for that matter, gain the 360 any extra edge in Microsoft’s bid to become the main digital distribution channel of the next gen living room.

  1. “It’s not going to win any awards,” said one attendee at the event, accurately critiquing the game in terms of innovation.

    I don’t think Halo 3 needs to worry about winning any awards, as long as Microsoft make sure the online gaming component works well, and keeps gamers coming back for more.

    I’m really worried about this release, as I’m certain it is going to soak up all of my spare time, and lead to some very tired days at work after numerous late night sessions!

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  2. What Microsoft needs to do is not release Halo 3, but drop the price on the premium by $100 and make the Elite $399 by Christmas. Their margins are such that they can afford a price drop now and they need to do it fast.

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  3. I’m curiously awaiting for halo3 to hit the market..would like to spend more time on that rather than closing eyes…

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  4. GuyNamedNate Sunday, May 13, 2007

    John Jones, I agree, a price drop would lead to a huge surge in sales. But imagine a double-whammy – Halo 3 releases this fall alongside a 360 price drop? That would certainly bolster sales.

    I think I disagree with the post though, Halo 3 will be a major system seller and on top of that, a major draw to the paid Xbox Live Gold service.

    I already own a Xbox 360 and know of atleast 5 people who are holding out to buy one until Halo 3 (and about 5 others that were planning on it but couldn’t wait once they saw Gears of War). I don’t think it will be Wii like mania, but over a few years Halo 3 will bring in millions of owners and millions of subscribers (most of which will fit into the demographic likely to want to download movies and TV shows and pay for premium content through Live).

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  5. Blake, your previous posts definitely show a bias against MS, so we should probably skip your “prediction”.
    I know of a lot of XBox owners waiting to see Halo3 to upgrade to XBox 360 and even larger group of “casual players” who are following the hype around Halo3 and postponing their decision on their gaming system purchase.
    From all that I have seen (beta), Halo3 would be a big success among the gamers probably pull a few PS2 owners into the XBox360 fold as well.
    My prediction – Halo3 will create a nice environment around the XBox360 experience – skins, accessories, online-buzz (with slow-mo, action replays) etc etc…

    As far as the XBox Live downloads are concerned, if ever MS offers a subscription based downloads it is going to be a killer service or in fact, if they add a You-Tubeisque service accessible through the box it will be a huge hit.

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  6. Cmon guys, how can you delete my comment for asking one simple straught qn.

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  7. Subhash:

    My only “prediction” is that Halo 3 (which I really enjoy) will only appeal to gamers. It will sell tons and like Everton says it doesn’t have to “win awards;” the brand will sell itself.

    That’s great when looking at the machine as a game console, not so great when factoring in Microsoft’s hopes in controller the digital living room.

    Both Microsoft and Sony have a more difficult time furthering their console agendas because their marketing suggests a desire to sell two very different things; games AND a lot of other stuff that gamers may or may not want.

    The more complex a value proposition, the slower the sales and more confusing to your target audience(s).

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  8. 10 million sold is not a number MS has thrown out but it’s really 10 million SHIPPED. You can’t rely on MS to give SALES numbers. NPD pegs actual sales at 5.5 million.

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  9. “but just to put them into perspective, 10 million 360 owners represents only 6% of the total number of consoles”

    While it’s important to take the total market into perspective, no offering from Nintendo or Sony has come close to these numbers.

    “Despite Xbox Live boasting the largest online console community to date, it doesn’t appear to be gaining ubiquitous traction, at least not yet.”

    Yet it’s leaps and bounds ahead of their competitors, Sony and Nintendo. You make it sound like it’s just about to be overcome by another company.

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  10. For me, I’d be looking at the Xbox360 as a gaming console. If I see that Halo 3 is quite an awesome game and that it’s simple enough for me to grasp, then I’d probably lean in the direction of buying the 360 and as a byproduct of having the 360, I could leverage that into a totally cool media center. But not everyone is going to look at the 360 as a potential media center. It’s a console – you pick it up, you play it, then you put it back down.

    And Blake, I think that Microsoft is thinking long term than quarterly/yearly projections. They’re not playing the same game as most analysts are. You throw too much at the consumer and they get confused easily. Step 1 was Xbox Live for the first Xbox, Step 2 is the Xbox360 Live world with forays into digital media. Step 3 will be the Xbox successor with more hooks into content and services secondary to being a gaming platform first.

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