A Year to Go to Xbox’s next big thing!

With roughly a year to launch of the Xbox, the real challenge now becomes fulfilling the promises of better hardware and a console “made by gamers, for gamers.” Here are the biggest hurdles and how things look to us:

By the time the Xbox launches, the Dreamcast will be the budget alternative with a bushel of great games, many with online gameplay. The PlayStation2 will undoubtedly be leading the market with a potent videogame/DVD player combo that will have sucked in the hardcore gamer, the wealthy gadget-obsessed and some of the curious mainstream.

The real concern for Microsoft is that the Xbox is little more than a PlayStation2.5. With a year head start, the PS2 will already have a strong library. Unless the Xbox can have some titles that will only appear on the Xbox, there is little reason for consumers to invest in yet another $300 DVD/game machine to play a version of Resident Evil with an X at the end of its name.

Microsoft has only announced publishers so far, with no games officially unveiled. But unless their first-party games are amazing and Halo is as good a game as it looks, it will be difficult to compete with Sony’s market share and Nintendo’s history of great titles. The outlook right now is fuzzy. We have heard rumors of great games, but if all Microsoft is going to have is Halo and hockey and formula 1 games to set it apart, then it could be in trouble.

Sony is given credit throughout the industry for its excellent marketing of the PlayStation. By cleverly putting demo units in discos and clubs, and by already having a high reputation among electronics concerns, Sony was able to transfer an image of cool to the PlayStation. Microsoft, however, is loathed by a small section of the tech community for its buggy, unstable operating system and bullying business practices.

Hardcore gamers probably have a milder opinion of Microsoft, thanks to some excellent hardware peripherals and good games like Age of Empires II, but few people think of it as some sort of cool company where fresh ideas flow like Evian. Marketing and clever advertising can change some people’s opinions, but Microsoft has a big challenge here.

The addition of big-name Japanese developers like Konami, CAPCOM and Namco is a necessity for the success of the console. The Japanese are the premier videogame makers in the world, and without their healthy support, the Xbox wouldn’t stand a chance.

Still, there is some concern about the depth and length of that support. The videogame industry is in a mild recession in Japan right now, and much of the profits of struggling companies are coming from software sales in the States. If the industry bounces back with a renewed (and more developer-friendly) Nintendo and a healthy PlayStation2, what motivation is there to continue to support the Xbox? Furthermore, the Japanese gamers and press are utterly indifferent to the Xbox, and the console will likely be a modest success there at best. If the Xbox slips to third place in the states, then there may be little reason for Japanese developers to continue to support it, further hastening its demise.

Despite these concerns, the Xbox has an equal but opposite danger: too much hype too soon. Given the tight-lipped nature of all current Xbox developers, Microsoft is doing a fine job of keeping everyone on the same page. Until the actual launch of the unit, Microsoft has to be careful to ladle out juicy scoops of information at the right times, feeding interested gamers rather than glutting them.

Next E3 will undoubtedly be one of the most important for the industry. Microsoft will need to show the final look of the Xbox by then, if not before, and will need to start showing playable code of great-looking games. Nintendo will be showing premier Gamecube footage, and second-generation PlayStation2 titles will be on the way. The Xbox needs to have a strong showing, but still have enough gas to get it through the slow summer months and the peak into the holiday season.

If it fails on any of these, Nintendo and Sony will likely hammer it with a combination of great, unique games and aggressive pricing. The PC will undoubtedly soon eclipse the power of the consoles, and some developers may return to the freedom of an open platform. If that happens, the Xbox will simply be a good idea whose time came and went pretty quickly.