Games

This article from MIT Technology Review argues that the near-simultaneous release of the PlayStation 4 and Xbox One may mark the last wave of consoles, at least as we know them. Not so sure I agree with that, but the article makes some interesting points. Though this generation of consoles is clearly superior to the ones they replace, the technological leap is clearly much smaller than the previous one. In addition, the gaming market has become fragmented, with smartphone and tablet gaming grabbing a significant and, depending how you calculate things, perhaps majority slice of the pie.

Downloadable games such as Angry Birds and Minecraft, which play on mobile phones and basic PCs, now constitute a major part of the industry (in April this year, Angry Birds developer Rovio estimated that its games have been downloaded 1.7 billion times, while in 2012, Minecraft earned its independent creator, Markus Persson, more than $100 million).

There’s no question that franchises like Call of Duty are still selling big. The argument is that the value perception of each new console release is declining and the number of consoles sold is declining accordingly.

Each new iteration of hardware brings a historical downward trend in console sales. Sony’s wildly successful PlayStation 2 sold 150 million consoles. Its successor sold 80 million. It appears that Sony and Microsoft both lose a lot of money on these devices. For these reasons, some people think this new generation of console hardware (including Nintendo’s beleaguered Wii-U, which has failed to capture consumers’ imaginations) may be the last.

For consumers, the decline in consoles is not only a symptom of broader choice (in the 1990s, consoles and PCs were the only way to play complex screen games) but also one of diminishing returns. Martin Hollis, designer of the seminal Nintendo 64 movie tie-in Goldeneye 007, told me: “With each iteration, the multiple of increased power matters less. Looking back, PlayStation 2 was a huge leap from PlayStation. But PlayStation 3 was a much smaller leap. Each time we climb a curve of diminishing returns.” Hollis, like many others, believes that most people who only casually play video games will remain unconvinced by the difference between the new versions of the consoles and the previous ones.

From a gaming point of view, smartphones, tablets, cloud solutions (like Steam and Gaikai) and consoles are all converging. Just as iOS and Android emerged as the last OS standing in the great smartphone dust-up, I suspect there will be just a few players left standing once the gaming chaos resolves itself.

Apple is on the precipice of making real inroads into the gaming market. Certainly, there’s no question that there is a thriving iOS gaming market, but the vast majority of those are casual games at low price points. There are a number of compelling factors that might signal a real change in the balance of power between iOS and the consoles. Between SpriteKit and native iOS support for real gaming controllers, the only real barrier I see is a lack of storage space. Certainly not an issue on the Mac side, but how can a programmer access 50 Gb of cut scenes from an iPad or iPhone, even one connected to a TV. Wonder if some kind of network storage peripheral could solve this problem.

A bit heavy on conjecture, this is a good read nonetheless.

A single change made by China’s State Council will bring huge repercussions to the video game industry.

For the past 13 years, the sale of video game consoles was banned in China. China’s State Council has now decided that video game consoles can be sold across the entire country so long as the foreign companies establish sales and production operations in Shanghai’s new free trade zone.

The only caveat here is that PS4 and Xbox One may not see the benefits of the new market for a few years. The new policies will roll out over the course of the following three years. It’s still a savvy move on China’s part. Console manufacturers and game developers would love to leverage China’s population of 1.4 billion people as new customers, and China would love to get its new trade zone brimming with successful, modern businesses.

At the same time, Apple shifted their China iPhone release policy.

The iPhone 5 sold around five million units through the opening weekend, while the 5S and 5C sold around nine million units combined during its opening weekend, with the 5S significantly outselling the 5C. Did the addition of a new, somewhat gaudy gold color and an easily-bypassed fingerprint scanner really make four million sales worth of a difference? Perhaps, but the 5S (and 5C) was the first time Apple began selling iPhones in China on release day, rather than after a long delay.

Editorial aside, the point is worth noting that China is opening up their markets and Apple was quick to take advantage of that fact. This is a huge change to the tech sector and, I think, just the tip of the iceberg.