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One of my favorite shows of all time is Cheers. During the Kirstie Alley era, there was an episode wherein the bar was experiencing financial trouble and was in danger of getting shut down. An idea was hatched to save the bar by offering a promotial contest with a trip to Hawaii as a prize. The tactic worked, and soon the bar was full of people.

In one scene barfly Norm grumbled to his buddy Cliff: “I liked this place a lot more before all these people started treating this like it was some sort of public gathering place…”

The irony is obvious – Cheers is a public gathering place, but some of the regulars would rather it not be. The bar is the comfortable old pair of shoes that they don’t want to change. They also don’t like “new people”, though were it not for the public gathering bit they wouldn’t be there in the first place.

The game industry has grown quite a bit over the years. It’s worth billions of dollars now. It’s been through a major crash and it’s been through some paradigm shifts. As it continues to grow it becomes more mainstream. We now have rappers appearing in videogames and movie producers opening game studios. We have some games which make more money than blockbuster movies – a feat both helped and hindered by their higher price.

One of the worst kept secrets in the industry was that Microsoft was planning on releasing a new console in November of 2005, a scant 4 years after their freshman entry, the Xbox. I personally thought everyone was wrong, or that Microsoft was making a stupid move, one on the caliber of Sega’s Saturn console (it was released prematurely to beat Sony to the punch – and suffered as a result). Then Microsoft confirmed the rumors, and unveiled the Xbox 360 console in a hour-long show on MTV.

I TiVo’d the show since I was out of town. I tried to watch it but I turned it off right about the point where Sway started interviewing the guy that was showing him how they designed the Xbox 360’s casing. This was after fastforwarding past a musical performance from some group of 20-year-olds I’ve never heard of and couldn’t tell you their name today. I meant to go back to watch the rest but at some point TiVo purged the recording, and I figured I could get the relevant details from other sources anyway.

So Microsoft eschwed trade shows and decided to throw a party/concert to launch their console. I can’t help but feel like Norm on Cheers – I think I liked the game industry more when there weren’t so many people here.

I’vementioned it before – at one point I owned an Atari Jaguar and it was like being in on a great secret. It had a couple of interesting games but only a few total. The games for it were kept behind the counter at the local Babbage’s. It was in this odd period of time where a startup company could launch a console. Atari of course wasn’t a starup per se but they were struggling by that point. And 3DO was a startup. Today we have a software company, a hardware company, and one old guard game company. The two times in the past few years we saw a startup try to do a console (Infinium Labs with their Infinium console and Indrema with their Phantom console), they’ve failed before getting a product to market.

So they unveiled the Xbox 360. That name makes me laugh. We knew it was one of a few possible names when Microsoft commissoned a secret survey and one anonymous Internet poster told a website the names – Xbox 2, Xbox Next, Xenon, Xbox 360. I figure the least silly name of those was Xbox 2 but I know how people are with Bigger Number Equals Better Syndrome so the Xbox 2 would always be seen by some people as behind PlayStation 3. So they named it Xbox 360, either to have “3” in the title somewhere or to make it sound like they’re 357 generations past PlayStation 3.

Whereas the Xbox ran on the x86 architrcture (with an embedded Pentium III chip), the Xbox 360 is running off of PowerPC. When Microsoft shipped the initial development systems to developers they were G4 or G5 Macintosh towers running the NT/2000 Kernel. Years and years ago Microsoft thought it would be nifty to port the NT Kernel (somewhere between Windows NT 4 and Windows 2000) to PowerPC. They already had it running on Alpha chips, so it would be a third market to run it on PowerPC. But they scrapped the project for some reason (likey their precipitous relationship with Intel) and also ditched the Alpha port (which they had been mostly maintaining thanks to an old contractual obligation). But today they still have a shaky relationship with Intel, mostly because AMD’s chips run Windows better (ironically their 64-bit chips run the 32-bit Windows the best) so they dusted off the old PowerPC port and gave it a second go.

Ironically in the ensuing weeks Apple announced their switch to Intel. Hell’s pretty much frozen solid by this point.

But there’s a problem – Sony got caught with their pants down last generation. The PS2 ran custom hardware. But it quickly became apparent that they had weaker hardware than the Xbox. Heck, the PS2 is weaker hardware overall than the Nintendo Gamecube, but at least the Gamecube ran custom hardware. The Xbox was literally cobbled together for the most part from off-the-shelf parts. Seriously, it’s basically a Pentium III with a GeForce 3. The processor is 32-bit, a number associated with the lowly PlayStation 1 hardware. It’s always been a given that a PC could do better graphics than a console, but the console maker’s ace in the hole was their price point, and here was Microsoft with a PC that could blow away Sony and still go toe-to-toe on price. And Microsoft wooed all the PC developers since they already knew how to program the thing and it gave them a constant hardware platform, something they can’t rely on with the PC.

But today Sony is still the clear winner. There’s a few reasons. For starters, they were properly able to exploit first mover advantage. Sega tried with the Dreamcast. Hell, Sega tried with the Saturn. But the Saturn’s launch was a disaster – no games, hideously expensive, and they announced at E3 that it was already in stores so it wasn’t like they could retool it. Dreamcast did a whole lot of things right, but Sega didn’t have the money to properly market it, their reputation had taken quite a hit with the Saturn, and most people want to go with the console that will “win” – it’s less of an issue today but at one point if you owned a Sega Genesis and all the games you wanted were on the Super Nintendo (or vice versa) you felt like a fool. People decided to hold off and get the Sony PlayStation 2 and Sega decided to bow out and become a software company.

The second reason the PlayStation 2 worked, and it goes completely against logic, is because it was backwards compatible with the PlayStation. Commodore made their Commodore 128 computer backwards compatible with the Commodore 64 and as a result, no one wrote software for the 128. Osborne Computer Corporation had success with the Osborne 1 but when they announced successor computers several months in advance, the dropoff in sales for people waiting for the new machines bankrupted the company. And of course Atari’s efforts to make the 5200 reverse compatible with the 2600 backfired. So it’s always been a given that the new console severs ties with the old.

But people picked up PS2 units since they could play the new Madden games. And their existing library worked as well. And developers liked moving to the new hardware, especially since so many people had bought it. So Sony somehow parlayed reverse compatibility into a selling point. It didn’t hurt that the thing could play DVD movies at a time most people didn’t have a DVD player yet.

So it’s stunningly ironic that Microsoft, who for the most part understands the concept of reverse compatibility (which is why Windows XP still runs most Windows 9x programs and Office 2003 still opens Office 1.0 documents) has yet to announce how or if reverse compatibility works on the Xbox 360. They’ve hinted at “limited reverse compatibility” but what that means is unclear. It’s probably a given that Halo 2 will run on Xbox 360. It’s probably not a given for any other title. It’s known that Microsoft bought out the Virtual PC product and associated peoples from Connectix. Virtual PC on Windows basically is VMWare but on the Macintosh it allows you to run Windows programs on PowerPC chips. However, while it works, whether it runs games at any normal speed remains to be seen.

So it could be that they’re not announcing reverse compatiblity because they still haven’t figured it out yet. Or it could be because they didn’t want to cannibalize existing Xbox sales. But their other big problem is this – the PlayStation 3 appears to meet or beat the Xbox 360, power-wise. Sony decided to commission custom hardware again but this time they didn’t hold back. There’s even talk of porting operating systems to it and using the cell processor to power a new line of PC’s and servers. Oh, and the PlayStation 3 is reverse compatible with PlayStation 2 (and maybe even PlayStation 1). It does this by also including PS2 (and maybe PS1) hardware – which is likely now to the point of fitting on a single chip each.

And then there’s Nintendo. Nintendo is the Apple Computer of the game industry. They do a lot of things that don’t make any sense at all and though occasionally these things fall flat (Virtual Boy) they usually work. I’ve mentioned it before but it’s under-rated so I’m going to mention it again – when I saw that they were coming out with Game Boy Advance Video carts – carts costing $20 or so but containing not a game but an hour or so’s video of something like Spongebob or Pokemon, it seemed idiotic. But then again $20 is what parents regularly spend on videos and DVD’s for ther kids. Cartridges are more durable, the kids already have the GBA SP’s so that’s cheaper than getting a portable DVD player, it was brilliant and sold a ton. The DS seemed like a dumb idea but it’s got some really innovative games and has so far outsold the PSP, especially day-one sales.

Nintendo unveiled their Revolution console at E3, after Sony and Microsoft unveiled their consoles. And by unveiling the Revolution, they basically showed what the outside of the console looked like. Specifically it looked like a black box with a slot and some buttons on it. Many figured that this was merely a mockup, and a quickly done one at that. Whereas PS3 and Xbox 360 games were shown (but not playable) at E3, Nintendo showed nothing. They did say the Revolution was backwards compatible with the Gamecube, which has led some to think perhaps it’s not a quantum leap above Gamecube, hardware-wise, and is banking on some innovative feature – like maybe controlling it with your thoughts or something.

My theory is this – Nintendo may very well not be ready yet, but they also think this is all a bit too soon. Consoles used to follow something of a “rule of seven” – there were on average seven years between the unveiling of a console to the last trickle of titles. Unsuccessful consoles would of course die an earlier death, successful consoles could push a decade. By all accounts, Xbox is a success. But here we are only four years after the release of the Xbox and Microsoft is putting out Xbox 360. It’ll be almost literally exactly four years, which is at least one year too early. Sony went about five and a half years between PlayStation and PlayStation 2, and I think a lot of the success of the PlayStation 2 was its backwards compatibility. It’s five years between PlayStation 2 and PlayStation 3, and they’re only doing PS3 right now since they don’t want to be seen as being “behind” Microsoft. It does say something that they let Sega and their Dreamcast get a whole year ahead – it says that they view Microsoft as a bigger threat.

Microsoft makes big waves about other things, as well. The Xbox 360 will have wireless controllers, exclusively. That’s neat, I’ll give them that. Save for the lack of a rumble feature, the Wavebird wireless GameCube controller is the way to go. Microsoft is making their typical splash about how the Xbox 360 will be the “center of your home digital hub….” etc. It’ll have Media Center Edition features, etc. to this end. But for all their hype, the Xbox Live service – the way to play over the Internet – only ever saw 8% of Xbox users ever use it. Remember how Nintendo said there wasn’t much of a market for Internet consoles?

Of course Sony is filled with their own line of crazy weirdos. They looked at Nintendo’s little GBA Video carts and said “we can do better than that! Hell, we own actual movie studios!” and to that end they rigged up a version of their UMD discs for the PSP to play movies and they’re releasing movies on UMD. Again, this completely misses the point. Sony thought the point was people wanted to watch movies on the go, or that they wanted their game console to also do movies. Nintendo thought the point was that kids want to watch cartoons on the go and parents want to shut their kids up with something more durable than a DVD. Nintendo got it right. Sony got it wrong. Sony thinks people want to spend $249 on a game device that can play UMD movies which sport a lower resolution than a DVD, have less features than a DVD (in many cases none), can’t be played on an actual television like a DVD, and yet costs the same as a DVD. Perhaps people do want to watch movies on the go but why do it with a PSP when a portable DVD player costs $128 and works with everything you already own?

And this was after the fact that tons of people in Japan were complaining that the square button wouldn’t work right. The creator of PlayStation said this was by design. Then Sony admitted there was a manufacturing defect. Then they latched on to this “Cell processor can do everything – put it in a PC!” idea. Just recently they announced the Cell processor will be so difficult to make and have so many cores that X% of the cores will be defective. Nice.

And Nintendo isn’t sinless in this regard. The Nintendo DS system, though interesting, is pretty much a stopgap system. The intent is not to have it replace the Game Boy Advance – that system’s successor is already in the works. The DS is a gimmick system – the gimmick is the touch screen and the fact that there’s two of them. Nintendo is serious about the system, but not serious enough to have it be a GBA successor. So why release it? And why now? I think it was less than a year between the time of the leak and the release of the system. The reason is simple – to beat the PS2 to market and undermine Sony. It seems to have worked – the DS sold truckloads whereas PSP sales have reportedly been tepid. The DS is cheaper, has a huge library of existing games due to GBA backwards compatibility, and some fine existing games thanks to – of all things – Nintendo 64 ports. Plus Nintendo made the DS durable enough that you can find demo units at places like Target. Sony didn’t do this – they’ve had a hell of a time making systems that didn’t ship with dead pixels right out of the box. That doesn’t breed consumer confidence.

So Nintendo released the DS early to beat the PSP to market. Microsoft stepped up the Xbox 360 to beat the PS3 to market, which might work but might not – it could be another Dreamcast situation since the PS3 is showing off better footage at this point and comes out roughly March 2006. And this is all because the industry has exponentially exploded. Sony wants to make their console competitive with high end computing hardware, Microsoft wants to make their PC-like console competitve with existing consoles. Actually Microsoft wants to make the Xbox 360 a hip accessory of sorts – which is why every piece of it looks suspiciously like the tragically hip iPod. And Nintendo appears to just want to make games.

I’m glad the industry is so big now. But I fear the competition may eat itself. Had Sega not bowed out circa 2001 we would have had four consoles on the market, and the last time that happened the industry collapsed. Though they’ve been better than I expected, Microsoft still shows some signs of treating their console hardware like they treat the software – it’s not right until version 3.0.

Which all leads to my biggest gripe – every time the console wars “heat up” (which basically mean the console companies announce their new hardware) the pundits all sit back and ask “Is PC gaming dead?” I can’t tell you how annoying that is. It would be as if every time a book like Harry Potter became popular people would prophesize “Is the Internet dead?”. And every time the consoles are finally released, PC gaming continues unabated. It’s the one hardware platform on a technology curve, instead of technology steps like console hardware releases. It’s the one platform that groups of crazy idiots can make a game in their bedroom. It’s the one hardware platform that’s ever gotten online play right. And if every console failed, it would be the one hardware platform remaining since people would have them anyway due to other uses.

My gripe is not that people think this. Or that they think it every time. It’s that we’re already hearing it again – four years later. Since it’s coming up so quickly this time, there are those who are giving it more clout this time around. I don’t want to see what will happen if Xbox 720 comes out in three years or something. And some of these people giving it clout are the heads of publishers who might want to put their next releases on consoles instead of PC. Eidos decided to make Ion Storm an exclusive PS2 company (not that it worked – they closed Ion Storm down finally after one PS2 game). Even id Software refuses to speculate whether or not their next game will be on the PC or consoles.

And all of this is because the industry is so crowded now. I’m glad that the game industry is so big now and I like the fact that there’s plenty of folks to play with online and buy games, but I kinda I liked it better when there weren’t so many people here.