Are home game consoles in danger?

I remember back in the late 1990s at Codemasters when as a publisher we had just two platforms we could develop for. The PC and the Playstation. By then Sega and Nintendo had both pretty much screwed up.

Then Microsoft arrived  with the Xbox, which added 50% to our available platforms. Then Nintendo got their act together with the DS and Wii and Sony gave us the PSP. And then the smartphones arrived, firstly Apple with iPhone and the App Store business model, now followed by Android and a small gaggle of other standards.

So now we have platform proliferation. Which means that the public can vote with their feet by deciding which platform to play on. And game developers have to choose where to direct their efforts. Initially the public were choosing between the Wii, the PS3 and the Xbox 360 and fanboyism became rife. But now people are making far wider choices.

At the same time the PC came back to ascendancy as a gaming platform but with completely different kinds of games. In the late 90s the PC market was mainly boxed, retail, plastic and cardboard. These are all but gone now, wiped out by piracy. Instead the PC has emerged as a platform for online casual games and for MMOs. These have proliferated so that there are now hundreds of MMOs running, many with “free” business models. And they are being played by many tens of millions of people.

Meanwhile the mobile gaming and App Store model has come from nowhere and in a year has made the iPhone the most successful new gaming platform in history.

So any fool can see what is happening here. People are playing PC online and smartphone games in preference to console games. The PS3 and the Xbox 360 are probably selling at about half the rate that they should be at this stage in the cycle. The Wii has reached the inevitable point where its sales have collapsed and by not bringing the price down sooner Nintendo have lost impetus. Just at the same time that  DS game sales have fallen off a cliff.

The 12 year old Runescape player I mentioned the other day, for £3.50 subscription  is currently getting 200 hours play a month. When you compare this with a cardboard and plastic console game at say £40 there is just no competition. These console titles have become too expensive to make and too expensive to buy. The same applies with mobile gaming where 99c App Store games are competing against £25 DS games.

And there are more big threats on the horizon with Rupert Murdoch converting MySpace into a gaming portal.

So you can see what is going to happen here. The home console platform holders, Nintendo, Sony and Microsoft, have a business model that is rapidly becoming obsolete. They are being completely outflanked. So they have no option but to change their business model to match. They have to go to server based games and also to the App Store business model. If they don’t their customers will leave them in ever bigger numbers.

Of course if I know this then the platform holders know it too, so it is not a matter of if they do it, it is a matter of when. And they are already making small moves in the right direction, Free Realms coming to the PS3 and full games being sold for download on Xbox Live, for instance. Another  thing is very much for sure, high street game retailing is now going to die off far faster than anyone was expecting.

7 comments ↓

#1 Jurn on 08.03.09 at 6:34 am

Also factor in a notable resurgence in tiny independent studios making games-they-love for the PC, some of them highly acclaimed (The Witcher, Evochron, Lost Crown, King’s Bounty: The Legend, Plants Vs. Zombies, etc). And in the last few years, the under-the-radar wave of new PC adventure games in the old-school point-n’-click mode. The PC is showing that an open platform + a loyal niche fan-base still offers an attractive and profitable option for a small developer. The final factor in the survival of PC gaming is the way that the fans band together to fix up older games, spending years creating really serious code-delving patches and huge graphics mods to keep great games alive (e.g.: Bethesda’s Morrowind and Pirates of the Caribbean games).

#2 tim on 08.03.09 at 12:46 pm

No, the consoles as such are not in danger. Specific consoles might be. Digitially distributed games like Battlefield 1943 show us what are in store for us. Affordable, easy, small. Without the piracy and logistic issues.

Beside, subscribtion based MMO’s has always been the last bastion of PC gaming, but this does not change the inherent cost of gaming on a pc platform when it comes to graphic intensive games like FPS’s. Anyone that has gamed on a PC with all its incompatibility and upgrade cost issues knows that it takes resolve and money to stay in that game!

If “PC” games are the future, we havent seen that “PC” beast yet. It might turn out to be a future console or other dedicated hardware device.

#3 Bruce on 08.03.09 at 5:06 pm

@tim
PCs are not engaged in a gaming power race as much as they once were. That was something from the heyday of AAA boxed retail PC games and they are just about dead.

There is a big trend now, we see it with WoW and Runescape, to make a game playable on as many machines as possible. Which is the exact opposite to having the upgrade costs that you mention.

#4 Robin on 08.04.09 at 11:48 am

I think you’re comparing apples and oranges here. Of course all these types of games are competing for the same people’s time and money, but the key console games are still selling in the millions. I don’t think Modern Warfare 2 (for instance) is going to suffer too badly from web and iPhone competition (although maybe it will suffer from silly pricing) – they’re offering two non-overlapping experiences.

#5 james braselton on 10.31.09 at 12:59 am

HI THERE YOU ARE RIGHT ESPECILY XBOX 360 AND PS3 GAME TIME TO LOAD OF A GAME IS TOO LONG AND HAVE VERY LONG LAG TIME FOR TODAYS GAMES SOO UNLESS THEY GOING PUT A LIGHTING FAST SOLID STATE FLASH DRIVE OR A 10,000 OR 15,000 RPM HARD DRIVES OR USE A HYBRIDE SSD/HDD OR LASER HARD DRIVES AT 160 TB/S 160 TERABYTES PER SECOND OR NANOSPHERS AT 2.5 TIMES FASTER THEN LIGHT SPEED ITS POSSIBLE TOO HAVE GAMING FASTER THE N LIGHT SPEED LIKE THE BORG GAMING CONSOLE AT 500,000 TIMES FASTER THEN LIGHT SPEED

#6 doris on 01.13.10 at 2:36 am

@ james braselton

lolwut?

#7 IkkiLuigi on 04.16.10 at 1:04 am

@doris

i had the exact same reaction.
and what are THE BORG?

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