Wii U vs. Xbox 360 vs. PS3: About Even

Wii U. Better than Wii Wii, I guess.

Nintendo has announced the final name of Project Cafe: Wii U. Just when you thought the Wii name was the strangest console name ever... Wii U. Nintendo introduced the console with some nice accolades from industry executives, some good-looking graphics videos, and plenty of laudatory exposition. Actual details about the hardware were rather scarce. Here's what we know:

• 1080P HD graphics output
• Controller with 6.2 inch screen, dual analog controls, touchscreen, camera, microphone
• Output can be from the Wii U to a TV or to the controller
• Backwards compatible with all current Wii controllers and games
• Games on proprietary optical discs
• 4 USB slots
• Release in 2012

What's missing? Well, you'll notice that what they didn't say is perhaps more important than what they did say. No mention of a hard drive in the console... so you can count the rumors that said there wouldn't be one as confirmed. If they were putting one in there they would have mentioned it. What they will have is some internal flash memory, size unspecified, and the ability to connect an external USB hard drive.

Graphics resolution? No specs at all, just some nice looking video. Which means that the Wii U graphics power will probably be around the level of the Xbox 360 or PS3, perhaps somewhat below. If the graphics output was substantially better in any way (resolution, polygons, texture mapping) you can bet Nintendo would have touted it. They didn't, so I think it's a safe assumption that the Wii U will not be setting any graphics records for home consoles.

The Wii U controller.

Price? No, no mention of that. Again, I think if they were planning to have a substantial price advantage over the Xbox 360 or the PS3 they would have mentioned it. Although, since they are more than six months away from the release date, keeping their options open is a good idea. Microsoft may well decide to drop the Xbox 360 price for the holidays, with the spectre of the Wii U looming for 2012. I'd guess that Nintendo will come in at least at $299, and quite possibly higher.

There was also no mention of digital distribution, any differences in how Nintendo deals with developers, or any of the new things that have been upending the game market like social games, free-to-play, or other new business models. Seems like Nintendo is counting on business as usual; if they were gonna do something different you'd have heard them talking about it.

It's not clear, either, exactly when the Wii U will appear. I'd guess earlier in 2012 rather than later, since this announcement will probably slow Wii sales even further (especially since the Wii U is fully backward compatible).

How does the Wii U stack up against its competition? Lack of a hard drive really cripples its ability to compete with downloadable content, or even streaming content that needs substantial caching. Assuming graphics output to be roughly the same, and the pricing to be about the same or higher, the real differentiation is the controller with the screen. Though Sony may have that covered with the PS Vita, and Microsoft has already shown a connection with Windows Phone 7 devices. The installed base of the Xbox and the PS3 are huge advantages, as are their software libraries. Motion control is no longer a unique feature for Nintendo. I think all the Wii U does is level the playing field; I think Nintendo is going to have to show some unique and compelling software titles for the Wii U to make inroads against the Xbox 360 and the PS3.

Video of Wii 2: Nintendo Fights The Last War

Some interesting video from what's apparently a private developer presentation of Nintendo's new console... you can see the drawing of the controller, and the unit itself sitting on the table. From what this shows it seems the rumors about a controller with a built-in display are true.

The case design may or may not be the actual case design; it's easy enough to mock up a case or change it.Then again, the case design is really about the least important thing for a console. The price is more important, and I think that having a display in the controller is good evidence that the price point on this puppy is going to be north of $300. I suppose Nintendo could make the display controller optional to reduce the price point, but then that reduces the chances for third-party support of the display controller. And if the display controller is a key selling point of the new console, it would seem odd not to put one in the package. So I'm predicting there will be a display controller packed in with the console.

It does make some fiscal sense for Nintendo to leave out a hard drive; it's an expensive component, and requires  more power and other support. Cost is usually a key factor in console design, and especially for Nintendo, who hates to lose money on each console. They don't have the deep pockets of a Microsoft or a Sony to be able to afford a loss leader and hope to make it up on high-margin software later on.

Of course, if they wanted to support a local area network so you could store things on your computer's hard drive and just pass them along to your console, that would be an interesting way around the problem. But not one Nintendo is likely to use, seeing as how that would make piracy even easier. Nintendo spends a lot of time and effort to close down piracy, which makes sense given how high their software prices are.

I still think that Nintendo is building hardware to fight the last war, and creating something that's poorly positioned to fight the next battle in the family room. Nintendo's Wii 2 will be expensive (over $300, maybe $400 or even more) and rely on discs sold in retail stores, and have very limited functionality besides gaming (probably Netflix, maybe a music streaming service). Its main selling points will be graphics horsepower and a controller with a display. There will be some downloadable games available; they'll be small and with development tightly controlled by Nintendo.

Meanwhile, consoles based on smartphone technology (Apple TV and Google TV), and streaming consoles (OnLive) are heading to the family room on or before Nintendo's time frame. These consoles will feature low price points ($100 to $200), games distributed digitally, and a huge array of other media options and app functionality. Development will be wide open, and thousands of apps will be available. App prices will be low (less than $5 to $10) and many will be free, with a variety of monetization models (freemium, subscription, advertising-supported, and others). These consoles will also have the option of using smartphones or tablets as display controllers, as well as more traditional controller options. Motion control will be readily available, too. Social games will flock to these new consoles.

Nintendo may sell some goodly number of their new consoles, but they will be massively outsold by the smartphone-based consoles. Microsoft and Sony had better get some planning done about how they will respond to these events. Sure, they are both making more moves in the right direction than Nintendo, and right now the Xbox 360 and the PS3 are selling better than ever. In the tech business, though, things can change very fast. Look what's happened to RIM and the Blackberry... that can happen to consoles, too.