The video game industry is clearly in a slump. If the 8% drop in video game software sales in 2009 was not sufficient reason to convince most investors to stay away from the sector, the disappointing outlook from Electronic Arts (ERTS) today certainly will. Electronic Arts beat reduced earnings expectations of 31 cents by 2 cents when it reported results for last quarter. Despite the release of the highly anticipated game Mass Effect 2 in January, the company provided downright depressing guidance for the current quarter and the first quarter of its fiscal year 2011. Electronic Arts expects to make between just 2 to 6 cents in the current quarter (Q4 2010). Analysts were expecting the company to report earnings of 13 cents a share. The outlook for the first quarter of fiscal 2011 is a loss of 35 to 40 cents.
With the next game console cycle years away, investors in companies like our pick Activision Blizzard are left wondering if there is light at the end of this dark tunnel. Even though Activision has a strong pipeline of games for 2010, the general decline in the industry and the economy have been weighing the stock down ahead of earnings that come out on Wednesday. That light at the end of the tunnel could very well come in the form of a revolutionary technology called Project Natal, which has been discussed in great detail below by Jackie Judge, the newest addition to the team behind SINLetter.
An add-on peripheral for Microsoft’s XBox 360 console, Project Natal has been deemed revolutionary. A strong choice in words for anyone in the tech world, as we well know, and often premature. Take the Apple iPad’s recent launch – it, too, was touted as revolutionary, predicted to change the way we view tablets and computers, and yet Gizmodo and several other tech blogs regarded it simply as a larger, clunkier iPhone. Plenty of people, including myself, have more than a fleeting scorn over the choice in title. At least we can appreciate, right off the bat, the stunning name of XBox’s Project Natal. It oozes with demure mystery while retaining a futuristic glow – it’s a name that would feel right at home in the world of Avatar, even standing in, possibly, for the project of creating avatars. In a way, that’s exactly what it is. But, will it be revolutionary? It certainly has the capacity, but history has a funny way of providing some perspective, before we decide a technology’s future.
When it comes to the battle between computer and console games, I always say I’m a computer gamer. Why? Maybe because I never made the full transition to console systems. It’s an interesting stance, because I am a surefire product of my generation, a generation whose virginal experience with gaming was with a console system: the original Nintendo (the NES), and its blister-inducing red buttons that made their way into the halls of gaming notoriety. But, once games started appearing on the PCs, with their big, new aura of technological superiority, and with their superior graphics and gameplay, consoles began falling on the wayside for many, especially considering how in the late 1980s, the market was saturated with poor-quality games, simply to meet demand.
The NES revived the dying console system, but by this time, home computers were becoming affordable and commonplace. In the ensuing decade, we would see an evolution in computer gaming: from SCUMM games to the 3D graphics of Wolfenstein 3D and Doom; to the beginnings of bump-mapping as seen in Citizen Kabuto; to scripted events as seen in Half-Life; and now, the world of the physics engine as we’ve witnessed since 2005, when the nVidia PhysX PPU was released. Such precedented leaps in technology in the 1990s and 2000s, along with what I could fairly surmise as a healthy economy during the Clinton Administration, continued the rampant success of the computer game genre. And, this is only with first person shooters. To put this in perspective the video game industry (including computer games) was a $7.98 billion industry in 2000. Despite the slump in the industry, video game sales generated $19.66 in revenue in 2009.
So, where were console systems during all this? The console system really made it big in the mid to late 1990s. Televisions, after all, were far bigger than computer screens, and controller pads became much more ergonomic – saying goodbye to blisters and hello to more efficient performance. After acclimating to using a controller, the keyboard and mouse can seem archaic, clunky, less intuitive by far, than something you can hold in the palm of your hand. Plenty of people look toward a game’s playability over its graphics, anyway, and with consoles being priced a good few hundred dollars cheaper than computers, consoles like the Sega Saturn, Sony Playstation and Nintendo 64 became incredibly popular in their heyday. However, it wasn’t until the Dreamcast, the Playstation 2, the Nintendo GameCube, and the XBox, that console systems started taking a cue from computer software, and started amping up their graphical capabilities. Sixth-generation console systems – in particular, the XBox – started rivaling the PC in terms of video quality.
Maybe that’s why at the brink of the millennium we saw a shift in the PC world toward simulation games (i.e. The Sims) and more strategy-based games (i.e. Starcraft, WoW) at the forefront of popularity. With consoles taking over with their highly playable, multiplayer games, it was almost as if the computer had to carve a name for itself someplace else, shift the paradigm, to remain appealing after reigning supreme on the graphics front for a long time. In the early 2000’s Electronic Arts had huge success with The Sims series, a series that has only recently begun to taper off in popularity. Why? Because the market is saturated, once again, this time with anything simulation.
The brilliant thing about the XBox is that it is the best of both worlds, a fusion, by Microsoft, of the PC platform and the console system. It has been immensely successful since its inception, especially with the help of its most popular games Halo and Halo 2. However, it didn’t break new ground like the Nintendo Wii did, which revolutionized console gaming by taking people off their couches and instead on their feet, in an interactive, gesture-based system. In a similar fashion, the Guitar Hero and Rock Band franchises were, and still are to a degree, monumental.
If the success of simulation games proves anything, it’s that people are craving games that mimic reality – virtual reality. Right now, it seems the gaming public wants one of two things: a reversion to retro gaming, after being inundated with all the dynamic lighting and physics engines in games like Half Life 2 and FallOut, or something completely new. Retro games always come and go in popularity – a natural ebb and flow of gaming waters – but to breach new territory, and really impress gamers, would require an advancement of simulation and physics engine games. Something bigger and badder. Here is where Project Natal comes in.
You could say that the XBox’s Project Natal is Microsoft’s way of usurping Nintendo’s throne. Sony, too, is trying to bank off the brilliance of the Nintendo Wii system. Rumors have been circulating of their arc controller, a controller that, most likely, will have gesture-reading capabilities like the Wii controller. Anyone could surmise that Microsoft would do the same, but if we know anything about this PC giant, it’s that they like to put things in overdrive, take things a step further. So, what do they do? Get rid of the controller. Project Natal is Microsoft’s foray into virtual reality, if I could use that term loosely, by creating a console system that relies on gestures, spoken commands, and presented objects or images sans the use of a controller. Thinking about this, I admit to feeling a static charge of excitement because, suddenly, anything seems possible. Ever since the birth of movies, and later, games, we’ve been trying to push the limits of pseudo reality – how can we make this experience more lifelike? How can we become a part of the game without these physical barriers of controller and screen, this distinct separation from projected reality and reality? Imagine the ability to interact with characters in a game by simply moving around, talking to them and even handing them objects. Despite companies like Mgestyk Technologies showcasing their futuristic gesture-based technologies, Microsoft’s XBox will be introducing the first widespread tool of the future, for mass, consumer consumption, in the immediately accessible package of a game. With this move, Microsoft is re-establishing itself as cutting edge, at the forefront of technology, and it is doing it with a game.
The true brilliance in Project Natal, though, isn’t just in its revolutionary gaming design or technologies we will be seeing, most likely, in more serious sectors in the next decade or two. The true brilliance lies in the timing with the reemergence of television as a technological frontier. TVs are making huge strides right now in being able to integrate as a computer system. Since people love their enormous flat screen TVs and computers, it makes sense to integrate them in one system, exactly like our iPhones. How does this tie in to Project Natal? Leaving behind the controller, we only have one more frontier to go before we reach, in a sense, a “full virtual reality” – add an immersive 3D environment. Soon, all our tv watching, movie downloading, movie renting, game playing, extracurricular activities, and work will be done via one system. Soon there will no longer be a disparity, a separation between consoles and computers – they’ll synergize into one complete entity. Just like the virtual reality that Microsoft can almost taste with Project Natal.
Whether Natal can invigorate this slumping industry remains to be seen but it certainly appears to be a powerful beam of light at the end of the tunnel.
To fully appreciate the potential of Project Natal, check out some of the videos in the gallery section of the Project Natal website here.