Are Console's Dying?

So the Video Game Industry is worth around $25 billion a year so why do we keep seeing articles on consoles being dead? I know this is scary stuff, being a gamer too the thought of losing my beloved Xbox 360 is hopefully a worry I will never have to contend with – at least not until the Xbox 720 or whatever it’s going to be called is announced, - but the hazards to the industry are very real.

So console gaming is obviously a massive market; games litter our high streets, supermarkets and online retail sections but many people still suggest that our world is suffering from an inner sickness and a sense of impending doom is rife. Many markets go underground in a spectacularly short amount of time especially those focusing on technology and entertainment. I mean look how fast VHS left us…

It has been estimated that between Sony and Microsoft there has been a massive $10 billion pounds lost since 2000 purely through their console offerings. The tools that are looking to ‘replace’ the console market aren’t that good at playing games either and obviously in most cases aren’t designed specifically with games in mind. The death of the console markets would therefore be a disaster to gaming and gamers too – Yes we have a PC at home but nothing quite feels like the pick up and play of a console controller.

The recent rumour mill circulating about the next generation of consoles has got me thinking about whether there is even a point in continuing this market – at least from manufacturing perspective. Obviously the launch period of a new machine represents the biggest risks to both the company and their partners. If they get something wrong or the advertising campaign doesn’t reach enough people then they are in for a pretty terrible time.

It’s little wonder really that the big console giants are trying to increase the shelf life of their consoles in an attempt to decease the chances of having a failure eon their hands. There are no plans for either Sony or Microsoft to show off any new machines at E3 this year which probably means that their next generations won’t hit until 2013 at the earliest.

The reason both Sony and Microsoft hit their current generation hard was due to the opportunity they had on their hands back at the turn of the new millennium. At the time they were both vying for ownership of the world’s living rooms but becoming everyone’s central hub for entertainment. 

Let’s face it that opportunity is not nearly as attractive now especially with all the new gizmos and gadgets offering their own spins on the entertainment industry. In 2000 we were still a year away from Apple launching the first iPod and thereby changing the entertainment sector or the next decade at least. In fact a lot has changed since 2000; Facebook wasn’t even created, free-to-play looked increasingly more unlikely, PC gaming was screwed and the Dreamcast was still halfway through its short life.

Back when the Microsoft and Sony were looking at the Xbox and the Playstation 2 respectively their marketing plans were very different from what they are now. They were genuinely looking at consoles as the main media hubs across the world. They expected people to use their consoles as their standard entertainment offering, communication device and at the time this seemed quite plausible.

The problem with the new console launches is that there is a much smaller opportunity than before; which is no doubt why both companies are looking at the possible USPs they could offer the general public. Obviously the risks are still there too which is why no-one has predicted that the next generation will be bigger than the current one – in fact the chances are it won’t be.

The main reason why there is this growing dread across the community is first and foremost because the manufacturers themselves don’t seem to keen to run out their next piece of hardware. Especially since history would dictate that we are well overdue their next iterations too.

 At the beginning of 2012 Nanea Reeves was mocked for suggesting that one of the big two might drop out of the console war completely. Ok, it’s unlikely but the lady has a point. Sony are exceptionally short of capital at the moment and Microsoft have only just started to claw back their start up investment from issuing their own consoles. It’s possible that they might both see an investment opportunity that they think surpasses their current console options.

One of the other major stepping blocks ahead for both Microsoft and Sony is that they really need a definite USP for selling large volumes of their new consoles, especially in the current climate. Not many people will be willing to shell out a few hundred pounds again for slightly better graphics.

The rumour mill has been ticking as normal and one of the more recent notions was for a new Xbox without a disk drive. This signals the changing reality we are having to deal with; many entertainment and technology products are coming around to the idea of downloadable or cloud gaming which may be the path that one of our console giants decides to take. Until a few days again the UK’s biggest Video Game retailer was going bust which is just another reason for us to think that spending £40.00 at your local store is a think of the past.

It’s even worse when you look at the handheld market too which apart from showing us that Nintendo are still a superpower in the industry also identifies that they are far behind the likes of the iPhone. We all keep being told that the 3DS is now a success but not in comparison to the iPhone which seems to be owned by every other person on the planet. I’ve not conformed but I can see why many have.

Maybe more surprisingly is the fact that the Wii U, the only "next generation" console that we have seen, looks a lot like a certain other Apple product. I mean it has a handheld screen after all.

Everyone wants to see what’s happening with the next generation of consoles and until then we will be worried that one of the big guns are going to pursue new interests. The major fans of the industry are easily able to write off a 20% year-on-year decline in game sales by simply saying it’s down to the lifecycle period winding up. It’s the other symptoms that are not so easily brushed under the rug.

Developers and publishers have been witnessing a steady drop in their stock value over the last few years. While this could be down to the economy it does seem strange that other sales tactics have gradually increased in popularity,

PC gaming has completely exploded over the last few years with more people spending more time playing game online than ever before. The main markets raking in the cash are those with free-to-play subscriptions and social options that mean people can part with their cash on are more irregular basis.

Ben Cousins said it best at the GDC a few weeks back but showing the world a graph comparing the history of arcade machines with the current cycle of home consoles.

At some point in 1999 consoles overtook arcades in popularity – and incidentally became almost entirely irrelevant – which is the point we are approaching in consoles today. In fact the graphics of our home consoles became as good as or better than our arcades with the launch of the Dreamcast.

The current climate suggests a similar switch in emphasis with the iPad becoming the most popular entertainment device on the planet. With the new iPad on the horizon holding the power of a household console, the war really is on.

People keep telling me that 50 million people have played Angry Birds while only 25 million have played Call of Duty. It’s to these people that I laugh… what competition does Angry Birds really have? Is it really as complicated as half the console offerings? Don’t get me wrong Angry Birds is the basis, pick up and play action that is ideal for entertainment devices like your phone but if it had been released as a console game I’m 100 percent sure it would have flopped.

The biggest issue with losing consoles (apart from the unhappy people) would be the lack of competition and therefore no doubt a fall in standards. Consoles are specifically designed with games in mind; they live and breathe the excitement of bashing in an enemies skull or scoring a goal from 35 years out. Their handheld controllers have no other purpose other than positioning your sniper rifle correctly or timing your jumps to perfection.

The fact is simple consoles will always be under attack by alternative forms of entertainment devices and much like the arcades before, it will weather many storms. Different platforms and option will sway certain individuals but while the enemy has the options the console has the big hitters to keep knocking them back.