Harrison warns of hardware market's expense

Microsoft Studios executive Phil Harrison has issued a warning to anyone gearing up to enter the console market.

Speaking at a press event, Harrison warned of the huge development costs and logistical challenges required to compete against the Microsoft's Xbox, Sony's Playstation and Nintendo's Wii machines.

'CES is always very interesting,' Harrison told journalists. 'But entering the hardware business is a hard thing to do. You need to have deep pockets. Hardware can be successful but it's rare to get new hardware to scale. I'm talking tens or hundreds of millions.'

He also warned that a supply chain, distribution model and manufacturing capacity are just as important as having a strong brand or software experience.

Harrison has previously worked on both the Xbox and Playstation brands and issues his warning as several new contenders are lining up their entrants to the console scene. The Ouya and the Gamestick Android consoles have hit headlines with their Kickstarter pitches and this week has seen the announcements of Nvidia's Project Shield handheld and Valve's Steam Box.

There is undeniably precedent for newcomers to the console market to be able to carve out a niche for themselves as both Sony and Microsoft entered the console market against highly established competition.

The original Playstation launched in 1994 and went head to head with the Sega Saturn and the Nintendo 64, managing to commercially outperform both machines despite Sony's relative inexperienced in console manufacture.

Microsoft first entered the console market in 2001 with the original Xbox, managing to carve out a part of the market that was largely dominated by the Playstation 2, acknowledged as the best selling console of all time.