Analysts are expecting video games to reverse last year's slump, despite the economic uncertainty. And there are indications this is not just more wishful thinking. Amazon and giant bricks and mortar retailer Toys "R" Us have partnered to become the online "category killer" for toys. They're taking pre-orders for the yet-to-be-released Microsoft Xbox and Nintendo GameCube consoles. It took only a half hour to pre-sell its allotment of Xboxes, suggesting strong demand for MS' initial foray into game hardware. But Nintendo's IBM CPU-powered GameCube sold out in just four minutes. Other retailers who are taking orders for the consoles report similar results.
When it comes to hardware, Sony's PlayStation looks like an also-ran this year. Despite some tweaking, the PlayStation has been eclipsed by the new MS and Nintendo technologies. But the almost all the profit in games is in the software and Sony's enormous base of users should bode well for continued game sales. In a defensive move against Microsoft, Sony is investing in Square, maker of the popular Final Fantasy game. Square maintains Sony's investment will not preclude it from developing games for competing platforms, but doing so will probably not sit well with its new second largest shareholder.
GameCube, Xbox launch amid uncertain times
GameCube sells out fast at Amazon
GameCube Sold Faster Than Xbox, Toys'r'us Says