"Metal Gear Solid 4" last of the great exclusives?

By Kemp Powers

LOS ANGELES (Reuters) - "Metal Gear Solid 4" is not only one of the most eagerly awaited games for Sony's PlayStation 3, it is also among the last of a dying breed -- games designed exclusively for one gaming console.

Developed by Japan's Konami (9766.T) and due out next year, the game is the latest installment in the action series that produced smash hits for Sony's (6758.T) earlier PlayStation 2.

It's a prime example of a game known in the industry as a "third party exclusive", as opposed to "first party" ones made by game-console makers Sony, Microsoft (MSFT.O) and Nintendo (7974.OS).

For years, the console makers have sought to secure such exclusives as a way to drive adoption of their machines.

"We're telling our fans that if you want to play 'Metal Gear Solid 4', you have to buy a PS3," said Ryan Payton, the assistant producer of the game.

"The PlayStation brand has always been good to us, and we're pretty bullish on the PS3."

But soaring production costs mean it's tougher for third-party games to turn a profit if they are limited to just one console. That's especially true for the PS3, sales of which have lagged those of the Xbox 360 and Wii.

Sony said it has been preparing for the demise of third-party exclusives for a long time.

"We understand publishers are needing to recoup their investment," said Peter Dille, senior vice president of marketing for Sony. "From our perspective, as long as the games aren't going exclusive to other platforms, PS3 gamers are not actually losing anything."

Sony has compensated by ramping up its own game production and has 15 internal studios working on PlayStation titles, more than Microsoft and Nintendo combined, Dille said.

He added that there will be 15 PS3 exclusives released between September 2007 and April 2008.

Payton said the new "Metal Gear Solid" needs to sell over a million copies on the first day it goes on sale due to its costly production, but that may be a tough mark to hit given sluggish PS3 sales.

As of October, only 2 million PS3s had been sold in the United States, compared to 5.2 million Wii consoles from rival Nintendo and 7.2 million Xbox 360s from Microsoft, according to market research firm NPD.

A year after its release, only two PS3 games have sold more than 1 million copies, a benchmark of financial success for a big-budget game. The 7-year-old PlayStation 2 had nearly 100 games sell more than a million copies.

Top next-generation video games cost between $10 million and $50 million, according to IDC videogame analyst Billy Pidgeon. That means publishers must hedge their bets by going onto as many platforms as possible.