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.
