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Ouya's Market Strategy Could Make It a Major Player Among Gaming Consoles


It may be the size of a Rubik's Cube, but it could create some major waves in the video game industry.

While everyone is still on edge waiting for official announcements of Sony's (NYSE:SNE) PlayStation 4 and Microsoft's (NASDAQ:MSFT) Xbox 720, the Google (NASDAQ:GOOG) Android-based Ouya is showing signs that it might be the console that's most worth our attention. Recently, project head Julie Uhrman has revealed significant moves the company has taken that should lead to a wildly successful launch and will make the Ouya a major game changer (forgive the pun) for the console market.

Perhaps the biggest news for the console is that it was recently confirmed that major retailers such as Amazon (NASDAQ:AMZN), Best Buy (NYSE:BBY), Target (NYSE:TGT), and GameStop (NYSE:GME) will carry the console beginning in June. Even though the console won't officially launch to the mass market in June, retailers have already started aggressively marketing the product and, according to Uhrman, preorders have been growing steadily on a "month to month basis."

Uhrman's repeated statement that the console will have a large library of software at launch is also inspiring confidence in the system. While the company is still hammering out its game approval process, the firm's focus on letting anyone develop content for the system has garnered interest from mobile games studios, triple-A developers, and consumers that want to become game designers. The console is expected to launch with 200 titles, including a few well-known names like Canabalt, Minecraft, and Final Fantasy III. It's likely that the majority of the initial games list, however, will contain games already found on Apple's (NASDAQ:AAPL) App Store.

That said, major publishers certainly haven't dismissed the console; studios like Double Fine and Robotoki have already made plans to support the system, so high-quality titles will most likely show up on the console before long. Even so, to prevent the system's library from filling up with low-quality games, Uhrman has stated that the library will highlight games with high engagement metrics rather than sales data, meaning that that only the games that consumers play the most will make it to the top of the heap.

At this point, the major concern among investors might be how well the Ouya will compete with the more established console brands, especially in a year filled with launches. Luckily, the Wii U's (PINK:NTDOY) weak sales performance may allow for Uhrman's much cheaper console to gain some ground in the casual game market, though the Ouya could end up a victim of the same market trends that have been hurting Nintendo's new console.

In regards to PlayStation and Xbox, Ouya's strategy seems to be focused on striking where its rivals are weakest. While launching during the summer would be suicide for PlayStation 4 or the Xbox 720 (because of the season's drought of triple-A titles), Ouya is launching at the time when indie games usually do best, specifically due to the lack of competition. Of course, there's the added benefit that a June release gets it out several months before the new consoles from Sony and Microsoft. Even so, the console will still have to contend with possible improvements to the PlayStation Network and Xbox Live online stores. However, the Ouya's wide developer base might give it access to impressive titles outside the reach of its competition.

Uhrman has also announced that a new version of the console will be released every year, whereas other consoles are sent to market with a five- to seven-year lifespan. While consumers might be annoyed at having to buy a new console yearly (the same frequency at which we're now buying smartphones), this strategy allows the Ouya to creep up in specs to meet its competition and potentially increase its software offering with every new release. So even if the first Ouya isn't a massive success, there's always a possibility for Ouya 2 or 3 to pick up the slack. The Ouya's low price may also encourage consumers to continually update their systems. Since all games will be married to user accounts, the transition would be very easy.

The Ouya has introduced so many new concepts to the game industry that even if it has a lackluster performance, it's likely that many will take notice of the new console. Last year's weak sales numbers may have been a signal that the sector needed a change, and that's what the Ouya is all about.
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