The game is on, folks. With Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) announcing the specs on their next-generation video game consoles ahead of this week's annual E3 industry trade show, don't be surprised if diehard gamers have to lift their jaws off the floor.
The PS3 and Xbox 360 sound tantalizing, with speedy workhorse chips and a series of features that make the machines feel more like home entertainment appliances than video game systems. From digital music storage to high-definition graphics to advanced online applications, the genre has certainly come a long way since Pong.
Microsoft's new system will be out in November in time for the critical holiday rush, while Sony's device will ship early next year. That means Microsoft will have a head start, but it does free up Sony to promote its PlayStation Portable handheld gaming device over the holidays. Both systems will be backward-compatible with earlier PlayStation and Xbox software titles.
Why have the companies taken this long to flesh out the details of their new systems? Well, there are two reasons. The first is that this is a highly competitive industry, and the companies don't like to release crucial information before they have to. The other reason they hold out for so long is that they don't want users of their existing systems to hold back on purchasing new titles.
While Nintendo (OTC BB: NTDOY) is also launching a new console -- and Nintendo Revolution's touch-screen controllers certainly will pique a fair amount of interest -- this is quickly becoming a two-platform race stateside, with Sony still comfortably in the lead.
For investors, betting on the hardware makers can be risky. Yes, they make some sweet money from software royalties, but it's those same gaming software specialists that have typically come through with explosive growth results. That's why both Electronic Arts (NASDAQ:ERTS) and Activision (NASDAQ:ATVI) have earned stock recommendations in our Motley Fool Stock Advisor newsletter service. One can also argue that some of the chipmakers behind the consoles -- like NVIDIA (NASDAQ:NVDA), whose quarterly profits quadrupled earlier this week -- offer more compelling plays.
Either way, the video game wars are never boring, and it looks like we're gearing up for another exciting battle.
More content to get your itchy controller finger clicking:
- Alyce Lomax was already wondering about the next-generation possibilities last summer.
- The PSPs were easy to find when the system was launched last earlier this year.
- NVIDIA is Spanish for envy, and that's what outsiders must have felt after the graphics chip specialist produced great results this week.
Longtime Fool contributor Rick Munarriz likes to collect video game consoles. Now if only he could find the time to play them. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
