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 arrivedÂ 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.
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 thatÂ DS game sales have fallen off a cliff.
The 12 year old Runescape player I mentioned the other day, for Â£3.50 subscriptionÂ is currently getting 200 hours play a month. When you compare this with a cardboard and plastic console game at say Â£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 Â£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. AnotherÂ thing is very much for sure, high street game retailing is now going to die off far faster than anyone was expecting.