Social Influences in the Game Market

There's no article for me to attach here, I had this idea on my own. I'm sure one exists somewhere, but I'm not gonna track one down.

In any case, it recently dawned on me that the console gaming industry is becoming more and more affected by social network influences. While such forces obviously affect many industries, one of the current driving innovations of the video gaming industry is online gaming. All three major consoles have it in some capacity: XBox Live was the first, and currently the best. PlayStation Network is Sony's version of the same thing. The Wii also has some online capabilities, but is by far the weakest of the three.

So how does this affect the market? Well, games cannot be played across console boundaries (with extremely rare exceptions). XBox users can only play with other XBox users, etc. Obviously, if most of your friends own an XBox, you're not going to buy a PS3, because you'd have nobody to play with.

The XBox 360 came out considerably before the PS3, so it obviously got a leg up on the market. The network influences on gamer's purchases are one reason why the XBox is beating out a technologically superior system, the PS3.

Xbox live has such a leg up on everyone because of its parent company: Microsoft. Microsoft has its hand in so many things and the connections it could bring to the table are endless. Xbox live doesn't do just online gaming like PS3 and Wii are limited to, but things like NetFlix, turn it into a media center, and use it as a network router if you really want. By giving people the option to do more than just game, people will naturally gravitate towards Xbox because if they value gaming the same regardless of console (assuming value of playing video games is equal in Xbox, PS3, and Wii), then naturally they will buy Xbox because they get more with it.

By offering more options other than gaming, Xbox has the leg up because by offering what their competition can offer and more, then for a rational consumer who is watching his wallet will buy an Xbox.