TCS Daily

The Tech Chain-Store Massacre

By Jerry Bowyer - December 19, 2006 12:00 AM

On Wednesday, Retail & Food Services data came out for the month of November. It showed an unexpectedly large increase over October, which was fueled by a 4.6% jump in 'Electronic & Appliance Stores,' twice as high as the second-highest jump, in 'Gasoline Stations.'

Not coincidentally, November saw the release of two landmark consumer electronic devices: the PlayStation 3, and the Nintendo Wii. The former was released in the United States on November 17th, and the latter on the 19th.

New gadgets are released every month, of course, but video game console releases are technological events. They're less frequent than the Olympics (Sony and Nintendo released their previous systems 6 and 5 years ago, respectively) and just as hyped. Anyone who watched the evening news over that three-day period was met with at least one story about people camping out in line to snatch one of the consoles before they sold out. Not since the Tickle Me Elmo doll shortages in 1996 have so many grown men and women forgone both work and presumably bathing for days on end to obtain such a frivolity.

It often seems that technological breakthroughs these days are more likely to come from capitalism-driven markets than government military programs, to the point at which it's become more difficult to tell the two apart. When Sony's last effort - the PlayStation 2 - was released, the company reportedly ran into some problems in Japan, where the Japanese government declared it a "super computer," and set a limit on the number of consoles visitors could take home.

A BBC article in late May of 2003 detailed the efforts of scientists at the US National Center for Supercomputing Applications (NCSA), who linked 70 PlayStation 2s together, and estimated that the resulting supercomputer "could be capable of up to a half a trillion operations per second, a figure that compares well with other supercomputers." And all this refers to a consumer electronic device released over six years ago.

Nintendo, opting to focus on game play over raw computational power, has had no such problems, but was the star of E3 (the definitive yearly video game convention) in 2006 with its intuitive motion-sensing controller, which allows gamers to swing the remote (dubbed the "Wiimote") like a tennis racket in tennis games, like a baseball bat in baseball games, and so on.

Innovations like this are why non-necessities like video game consoles can single-handedly raise retail sales in a given month, even when more essential products like clothing and furniture are flat. As a society, we've gotten about as good as we're going to get at creating sweaters and sofas. But microchips are still in their infancy, which means that "must have" consumer electronic devices hit the market with startling regularity. In-between video game consoles, iPods and pencil-thin cell phones tide us over. Increases to their processing power and decreases to their size and weight are so dramatic that consumers are compelled to purchase them even when they offer little pragmatic value over the last such device. They draw customers beyond the technophiles in the same way blockbuster movies attract people who don't ordinarily go to the movies.

Today, technological advances are one of the ways in which we mark the timeline of our lives. Human history used to be defined by what the world did to us; floods, earthquakes, and diseases. Eventually, it became about what we did to each other; war, elections, politics. These days, it's also about what we do for each other. The modern first-world citizen marks the milestones of his life in technological breakthroughs, even frivolous ones. While generations before mine will always remember where they were when Armstrong first stepped on the moon, young people today will always remember the first time they held an iPod, or swung a "Wiimote."

So dramatic are the advances in consumer electronics that they appear poised to supplant establishment items in a number of areas. They're threatening to overthrow television, the most prominent and enduring symbol of home entertainment up to this point. TV ratings for most major sporting events have lagged in recent years, perhaps because young men, the target audience for most televised sporting events, are getting their competitive fix from video and computer games. Episodes of most primetime shows are available for download, either for free on network websites, or for a small fee via Apple's iTunes Media Store. Couple this with the existence of reruns, and there's little sense of urgency to see something when it first airs.

The end result is that technology is not only creating new markets for new products, but it is spreading backwards in time, invigorating dormant ones. Even clothing, a product which appears to have no significant potential for improvement, is being reinvented, as prototype basketball jerseys which display the statistics of the player wearing them are on the horizon. Other articles of clothing which measure your heart rate while you wear them aren't far behind, either.

Even clothing, then - previously the Christmastime bane of countless children across the country - may become a must-have gift. As processors continue to double in speed and halve in weight, children may no longer dread the thought of lifting a too-light-to-be-a-Game-Boy package from under the tree, and start hoping for it.



Three cheers for capitalism. If the socialists were in charge we would just be getting Pong.

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