Many moons ago my son and I were playing one of the many cool games available for the Xbox 360–EA Tiger Woods PGA Tour. While we had the normal frustrations trying to get the putting down, I am amazed at how great the graphics are. It also reminded of an event I went to about 20 years ago related to game consoles.
The event was a debate at an industry trade show. The debate was between Trip Hawkins, the founder Electronic Arts who had gone on to start 3DO, a game console manufacturer, and the loud and arrogant Steve Ballmer, who back then was the EVP of sales for Microsoft.
Hawkins argued that game consoles would win out as the console of choice in the fast growing gaming industry. He said personal computers were too generic and too expensive to be a major player in this emerging market. And while initial gaming started on personal computers, they were about to be taken over by gaming consoles. Hawkins big proof was his new 3DO company's new console, which was way beyond anything that the market had seen before in terms of functionality and performance. He also had Nintendo to point to, who had successfully marketed consoles at the low end of the market since 1985.
Ballmer, on the other hand, after seeing over a decade of outstanding sales at Microsoft, was bullish that personal computers would continue to dominate not only the gaming market, but even take on new markets going forward. He went on to predict MS Windows would begin running on non-personal computers as the controlling OS (even without a user interface). Balmer predicted that hardware for PCs would continue to evolve into supporting greater and faster graphics, and that would be sufficient to maintain the lead as the “console' of choice for gamers.
Well, here we are 20 years later. Hawkins' 3DO company eventually went bankrupt due to being too expensive and being replaced by Sony's PlayStation. It would take Microsoft about a decade later to introduce the Xbox. No one can argue today that Microsoft hasn't been wildly successful with their game console. Nintendo is struggling and Sony is still trying to recover from their PlayStation network woes over the last year.
The irony of the story is remembering Balmer at the debate. He was adamant that the PC would win. He was unyielding on any point. He said gaming consoles would NEVER take over.
It was a fun debate to watch. Hawkins was very persuasive, coming off of a successful startup with EA, and believing he could replicate the success with 3DO. Ironically Hawkins was right on. Gaming consoles would dominate the gaming industry. Yet it was Balmer and Microsoft, who would capitalize on this trend.
There is no question Microsoft changed a lot of rules of the “game.' They introduced hard disk storage and broadband connectivity, both ideas borrowed from the PC world. The first made it possible for faster load times and more extensive games. The second took multi-user gaming to a whole new level. And, of course, having a game like Halo to help introduce the Xbox was a major coup.
It would have been interesting to have been at the Microsoft executive planning meeting when they finally decided to introduce the Xbox and go after the gaming console market. Undoubtedly Ballmer was there. Was he for or against it? And what OS did they plan to use for the Xbox? Windows? No, they opted for a leaner System Software.
It just reminds me that you can very, very rarely say never. Or else plan on eating big crow. I know I have quite a few times.