Re: UKNM: Dreamcast vs Playstation

[azeem azhar, lists]

>>> I think what Microsoft are trying to do is some how re-form the Home PC

>>>in a

>>> way to a small budget box code named x-box, which will include powerful 128

>>> bit gaming capabilities such as the Dreamcast and PS2

>>>

>>

>> one word:

>>

>> pippin.

>

>Oooh, yessss... Apple's finest hour... you can imagine the marketing

>conversation for that one:

>

Indeed, the Pippin was the cause of one of my many furiously unfine moments

as a "journalist".


reprinted below for those who missed it...


a


(p.s. i'm hiring: smart multi-skilled, intelligent producer-type,

strategy-thru;-to-implementation people). CVs to the above. salary +

options.


== begins

Apple Computer. Small in Japan

------------------------------------------------------------------------


INDEX TERMS  	Apple Computer|Pippin, multimedia game; Multimedia|Apple

Computer's Pippin game; Internet|Apple Computer's Pippin game;

Computers|Apple Computer, Pippin multimedia game;

DATE	20-Jul-96

WORDS	850

 

IT IS always a little worrying when a company is praised for making a

smaller loss than expected. Apple Computer's $ 32m third-quarter loss,

announced on July 17th, came as a relief, given that the erstwhile guiding

light of Silicon Valley had lost $ 740m in the previous quarter. Less

noticed are the first signs that its snazziest new product, a

game-machine-cum-Internet-surfer called the Pippin, is doing badly. In the

four months since its launch in Japan, only 18,000 Pippins have been sold,

a third as many as had been expected.

This is hardly surprising. Little more than a stripped-down Macintosh

computer, with a joystick instead of a keyboard, Pippin resembles an

upmarket compact-disc player. It is designed to sit in the living room and

plug into a television set and hi-fi. Though, at around $ 600, it is

cheaper than a multimedia computer, it is roughly $ 400 more than the best

dedicated games machines, such as Sony's PlayStation.

Apple's hope is that Pippin will appeal to people who want to dabble with

multimedia and the Internet but prefer to avoid the hassle and expense of

buying a personal computer. But this market has not yet developed, and when

it does Pippin will not be alone in it. Dozens of companies are developing

'network computers' that should allow consumers to reach the Internet via

their TV. Such machines will be roughly $ 100 cheaper than Pippin, though

the latter has the advantage of its own CD-ROM drive, so that it can run

its own software instead of depending on the programs it will download from

the Net.

In Japan, Pippin has been manufactured and marketed by Apple's licensee,

Bandai, a Japanese firm responsible for Mighty Morphin' Power Rangers, a

popular game. Like most game-machine makers, Bandai sells each Pippin at a

loss, hoping to make its profits from the software. But despite throwing in

Internet software, six CD-ROM titles and a generous subsidy, Bandai has

been unable to trigger the demand for Pippin that it had hoped. It looks

certain to miss a revised (and reduced) target of 200,000 sales in the

first year.

What went wrong? The few Pippin buyers turned out not to be young Japanese

teenagers, desperate for the Mighty Morphin' Power Rangers, but their

middle-aged parents. The bundled software, aimed at children, missed its

mark. Access to the Internet did not much excite these older buyers either.

Bandai now sells a cheaper Pippin without the Internet gadgets; it may also

adapt the package so that it contains more software for adults.

Apple says it is confident not only that the Japanese market will pick up

but that Pippin will fare much better in America and Europe, where it will

be launched later this year. Its optimism is based on the fact that most

multimedia games and software are developed on Apple's Macintosh computers

and so should be a cinch to convert for Pippin. This should set Pippin

apart from previous multimedia consoles - notably one made by 3DO, another

Californian company, that flopped because nobody wrote software for it.

The hitch is that, although developers design their games on Macs, they

nearly always aim their finished product at the much bigger PC market. A

few weeks later, they release a Mac version. If a market of 23m Mac users

fails to attract software developers, it is hard to see how a few thousand

Pippin users will. The early signs are that most big developers will stay

away until Pippin develops a following.

There is, though, another reason why America may be keener on Pippin than

Japan has been. America is hooked on the Internet, whereas it remains a

novelty in Japan. The American Pippin will be shipped with a Web browser

which can understand Java, a language expected to be the future of Internet

software. Even with this advantage, however, Pippin's competition will be

tough: Sega recently announced a modem and Internet package to accompany

its Saturn games console.

In the end, Pippin's success will depend on price. The present $ 400 gap

between it and the game machines looks daunting. One way to narrow this

price difference would be to find a services firm - such as a phone or

cable-television company - to lease Pippins to households. The only other

licensee, Katz Media, a Norwegian firm, is rumoured to be looking for such

partners in France.

By basing much of Pippin around existing technology, Apple has kept its

investment in the project fairly small. That has limited its risk. But it

has also limited its possible return. Apple will receive a royalty of

around $ 15 on each Pippin sold, and a further few dollars for each CD-ROM

title. CD-ROM buyers seem to be a thrifty group. Last year, the average

multimedia PC owner bought only one title. But Sony has sold around 4m of

its PlayStations in the past 12 months, and the average PlayStation owner

buys around five CD-ROMs. If Pippin sells as well as the PlayStation, it

will help Apple. But it will not save the company on its own.

� 1996 The Economist Newspaper Limited. All rights reserved


azeem azhar, esouk.com			| www http://azeem.azhar.co.uk/

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