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Will Consoles Survive the Next Generation?


Edge has a great interview from their upcoming issue with Phil Harrison (former Sony Computer Entertainment exec).

There’s a lot to dig into and I encourage everyone to go and read the full interview, but for now I want to focus on Harrison’s views about where gaming is headed:

“When do you predict we’ll we see a non-physical media future?
Depends where you live: If you live in Korea, it’s already happened, if you live in China, it’s already happened. That’s an easy prediction to make: there is undoubtedly a generation of kids alive on the planet today who will never purchase a physical media package for any of their digital entertainment.

When do you think the first traditional console will go non-physical?
The console companies, if they wanted to take true market leadership, could do it in the next generation. There’s no reason why Microsoft and Sony, in particular, couldn’t push that change for the next iteration of their major consoles. Nintendo I think will be a little bit further behind, traditionally they have not been at the bleeding edge of technology and I think that Nintendo has got less experience in building their own online infrastructure, unlike Microsoft who’s probably in the lead and Sony who’s catching up fairly quickly.

So browsers would presumably be the next 'platforms', replacing traditional consoles?
Exactly. If that console, physical device goes away that’s fine but that doesn’t mean that PlayStation or Xbox as brands go away. It could be that the game and browser of the future is powered by PlayStation, or powered by Xbox Live or Nintendo. I think that that’s where you’ll see the battleground: not necessarily putting boxes full of chips and hard drives into your living room but giving you a storefront, navigation, discovery, a business model and user-interface.”

I couldn’t agree more with all of the above. The traditional video game model is on the verge of disintegrating for two main reasons. The first is that pricing has gotten out of control. No, games aren’t retailing for much more than they use to back in the day. But back in the day they also weren’t competing with streaming movies, streaming television, digital print, mobile gaming, and the million and a half other ways one can spend his or her time exploring entertainment these days.

So bottom line? Most games just aren’t worth what they’re priced at. That’s not a subjective determination on my part, but a developing reality of the new hyper-competitive media landscape we find ourselves in. Do I spend a dollar per hour of entertainment via a mobile app? Or two dollars per hour of entertainment via a traditional video game? In the past and still currently to some degree, a great video game was worth its sticker price because of either its high replay value or the depth of experience it provided. And so you have that today with CoD which provides hour upon hour of replay through online multiplayer, or Uncharted 2 with its shorter but highly crafted story. Both of those titles have a place in the current landscape and represent a format that will continue to be relevant in the future. But for each of those titles, there exist a plethora of subpar products that remain overpriced in an inflated market place. And I just don’t see a Homefront, Brink, or Prototype commanding $60 in the an increasingly crowded media market.

The second reason why gaming will have to undergo drastic changes moving forward is that multiple hardware formats are inherently untenable. Movies converged on a single format, as did music, as have computers. Yes, Apple remains and flourishes, but it is the exception and not the rule. Besides, what’s good for Apple is, well, good for Apple. Currently, Nintendo, Microsoft, and Sony have still dominate the rather insulated “traditional” gaming market. But already the 3DS and PSV will most likely face a large chunk of their competition not from one another but from Apple and Android. Three consoles, one of which doesn’t directly compete (at least not yet), is a crowded field. But four portables, Android, Apple, Nintendo, and Sony, are a lot, not even including the potential for “gaming tablets” that GameStop or Microsoft might be exploring. And the important thing to remember is that companies can compete over better hardware/software and over who provides better content without needing to design exclusivity into their systems.

And though companies don’t like to compete, if they have to they’ll want to do it in the most cost effective way possible. Wii remained a profitable alternative for many years not because it was “better” than its competitors, but because it tried to do something completely different, and thereby offer a product for which, at the time, there was little to no competition. So will the big three continue the console arms race or give up costly overhead and rebrand themselves as something more like media distribution networks? It’s unclear as of yet, but whether it’s sooner or later, my money is on the future consisting of Xbox, Playstation, or Nintendo “channels” rather than competing units of expensive hardware. Why compete over costly lines of production when you could compete over lighter platforms like digital “browsers?”
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About E C Gachone of us since 11:37 PM on 01.06.2011

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