Ouya Seeks To Shake Up Video-Game Console Business

3:09 PM, Jun 24, 2013   |    comments
The new Ouya Game Console (Photo: Ouya)
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Brett Molina, USA TODAY

The video game console wars welcome a new combatant.

Tuesday marks the arrival of Ouya, the home video-game console born through crowdfunding and introducing a lower-priced alternative to higher-priced competitors.

"The consoles are still incredibly expensive," Ouya CEO Julie Uhrman says. "The business model hasn't changed. We offer something very different. We really carved out our own space."

Industry veteran Uhrman joined Yves Behar, the console's product designer and chief creative officer of audio hardware company Jawbone, to create Ouya. It was unveiled last July through a campaign on crowdfunding site Kickstarter, raising more than $8.5 million in one month. Early versions of the Ouya (pronounced "ooo-yah") shipped to backers in March.

The $99 device has since attracted big retailers, including Amazon.com, Best Buy and Target. More than 150 digital games will be available at launch, from indie titles such as BombSquad to games from big publishers such as Square Enix's Final Fantasy III. A handful of entertainment apps will also be available.

Ouya's price is far lower than traditional video game consoles, which range in price between $250 and $500. "You really have something that's quite compelling for someone that doesn't have a lot of money, but they want to get a game console in their living room," says Gartner analyst Brian Blau.

Ouya, which is the size of a Rubik's Cube, boasts the traditional features of a home gaming console, including HDMI inputs for high-definition TVs and a controller similar to what's found on a PlayStation 3 or Xbox 360.

However, it's DNA is mobile in nature. It runs on a version of Google's Android operating system, with games priced as low as $2-$3. All titles hosted on Ouya will be required to provide free demos before purchase.

Also, like smartphones, new versions of Ouya will launch on an annual basis. The standard home video game console cycle runs between 4-6 years.

"The $99 price point is very attractive and conducive to replacing a device every year," says Al Hilwa of IDC.

The Ouya faces several hurdles. The console won't boast the technical advantages of future devices such as Microsoft's Xbox One and Sony's PlayStation 4, with realistic graphics and superior processing power. Uhrman disputes the value of console horsepower.

"Those are all nice to have, but at the end of the day, the only thing the gamer cares about is that games are fun to play," Uhrman says.

On top of battling the Xbox, PS4 and Nintendo's Wii U, the Ouya must contend with the rising smartphone and tablet gaming market. "They have a lot of competition," Blau says.

Ouya won't just battle for video game players. Securing top-notch developers will also be crucial to how well the console performs, Blau says. "If those game developers spend their time and resources to produce games and they're not able to monetize users in a way that's profitable for them, they will abandon the platform."

Hilwa says Ouya's success will come down to content. "The quality of the games, the quality of the playing experiences ultimately is going to decide whether this really wins or not," he says.


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