The Rush to Market in the Video Game Industry

Businessweek has a nice piece on Microsoft's attempt to get the next Xbox to market before the next Playstation.

For the past few years, Microsoft Corp. (MSFT ) has vowed not to give Sony Corp. (SNE ) a head start in the next generation of video game consoles. It's a lesson Microsoft learned the hard way. Sony's PlayStation 2 had a 20-month jump on Microsoft's Xbox, which launched in November, 2001, and rode that lead to a 69% market share. Microsoft started work on the next version of Xbox right after the original shipped, to be ready when the next console cycle began. Said Microsoft's Xbox boss, Robert J. Bach, in a recent interview: "We'll be there when Sony is there."

When I worked at Lexmark in the late 1990s, we faced this same kind of pressure. First to market with a faster printer or a printer that hit a certain price point was made out to be life or death. The problem was that when you develop hardware that quickly it usually has problems that can cancel out your first-to-market advantages. At least Microsoft seems to have learned their lesson. I wonder how the market will react if new versions of the Playstation and Xbox release at the same time.

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