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Cybernaut

More than games at stake in exclusive contracts

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Last week Microsoft Corporation won a huge battle for the hearts and minds of gamers around the world with the announcement that the company had signed an exclusive deal with Marvel Comics to collaborate on a series of online role-playing games.

In other words, only the Xbox 360 will have games featuring the X-Men, the Fantastic Four, The Avengers, The Hulk, Spider-Man, Daredevil, Blade, Ghost Rider, and literally thousands of other characters. With new Hollywood adaptations of these comics coming out every few months, it’s a sizeable gain for Microsoft – and a kick in the eye for anyone thinking of purchasing the Sony PS3 or Nintendo Revolution.

Exclusivity deals are common in the gaming industry. The Halo franchise, developed by Microsoft, is only available on Xbox and PC. The Grand Theft Auto Series is not exclusive to the PS2, but Sony has almost a year of lead time in the market for these popular titles. Sony also hordes popular titles like Gran Turismo, God of War, Mercenaries, and so on.

But while these deals are common, the rate at which the major game makers are buying up companies and inking contracts has increased significantly in anticipation of next generation gaming systems.

While it seemed like there was room for three consoles in the market, we may be watching the end game where only one console will emerge as the dominant player – for the simple reason that most consumers can only afford to buy one console and games will be a major factor in that decision.

But it’s not just about games. A version of Xbox 360 will feature a HD-DVD player, capable of playing next generation high-definition DVDs. The PS3 will feature a Blu-ray DVD player, a slightly different format also capable of playing high-definition DVDs. Since nobody really believes Hollywood will allow a repeat of the VHS vs. Betamax battle, one of those formats is destined to become obsolete.

Because both systems will likely retail for around $500 – and still lose money for every unit sold – the catalogue of games will ultimately decide which console wins this war. And because the consoles are so popular (more than 40 million sold in North America) these gaming deals could actually help to decide which high definition format becomes the future industry standard.

While PS2 was a great system and has outsold Xbox about 6-1 worldwide, everything will change with the release of the next consoles and so far Microsoft is making all the right moves.

Sony is smart, and early indications are that the special Cell processor developed by the company will kick the Xbox’s butt in terms of performance, but then Betamax was superior to VHS too. All that technology won’t mean a thing if you don’t have the games to back it up.

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