Next generation platforms engage in shelf-war games

Discount Store News, April 1, 1997 by Robert Scally

The real rock 'em sock 'em action in the highly competitive world of computer games is turning to the next generation platform games--Nintendo 64, Sony's Playstation and Sega Saturn.

A price war is threatening to break out between the manufactures of next generation hardware. A growing number of software makers are issuing new platform versions of older games that were previously available only for CD-ROM on PCs and Macs, while others are simultaneously publishing new titles in CD-ROM and platform versions.

Evidence of the increasing importance of next generation platform video games also showed up in recent market research statistics.

The growth in the sales of next generation platform hardware is also outpacing the overall growth of personal computer hardware, according to two industry market research firms.

Market research firm NPD Group reported next generation sales were $3.9 billion in 1996, up 22% from 1995's $3.2 billion. By comparison, PC sales grew just 13.6%, according to a recent study released by high-tech market research firm Dataquest.

Last month, Sony Computer Entertainment announced a 25% price reduction to $149 for the Playstation, making it the lowest-priced set-top platform on the market. Officials at Nintendo and Sega said that they currently have no plans to cut the price of their game players, both of which retail for $199.

The list price of Playstation software was also slashed $10 to $49.99. Most Playstation titles will now carry a street price of about $39.99. Sony is also repricing a number of its most popular titles, including BattleArena NFL Gameday, NHL Faceoff and War Hawk, to a new suggested list price of $24.99. The repriced titles are expected to sell for a street price of around $19.99.

The software price reductions make Playstation software more competitive with Saturn's software, which sells for about $20 for $50, while Nintendo 64 software sells for about $80.

Playstation, which was introduced in September 1995, currently has the largest installed base of any of the next generation platforms, with about 3.5 million units sold.

The move's unusual timing (such price cuts make more sense during the fourth quarter when sales are highest) may be due in part to the strong performance of Nintendo 64.

Recent sales figures released by NPD Group showed that Nintendo 64 accounted for 50% of the next generation hardware sales between October and November of 1996, with Playstation taking 34% of the market and Saturn capturing 16% of the market.

Nintendo 64's installed base stands at around 2 million units, with 1.74 million units sold vs. 1.46 million Playstation units between October and December 1996, according to NPD.

Nintendo 64, which operates on a 64-bit computer chip vs. the 32-bit chips used in Playstation and Saturn, went on sale last September.

Saturn has built an installed base of about 1.6 million units since May 1996, according to published reports and industry estimates.

But steady streams of new titles for both Nintendo and Playstation will be needed to maintain the momentum behind the new video game sales boom.

A number of major software companies, such as Interplay and Fox Interactive, are stepping up their releases of titles for next generation platforms. a