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[Oppo]

So, I like Chris a lot as a writer and general game dude. I've seen him speak at PAX and otehr places and I think he's a good guy. I don't specifically mean to single out Kohler, I just think he's repeating a common console industry argument, and articulated it better than most, so I'm using it as a template.

That said – man did he ever whiff this end-of-2012 article:
Consolation Prize: The Game Console Is Dead. What Will Replace It?

Please read my responses here in the tone that I intend, which is mostly playful ribbing... but I almost couldn't disagree more at the time I originally read the piece, and now, I think it's safe to say this was, and continues to be, way off the mark.

A few points:

In November, Nintendo will release Wii U, the first update to the groundbreaking motion-controlled gaming console that took the industry by storm in 2006. Pundits and developers presume Sony and Microsoft will quickly follow suit with their own updated game consoles — also the first in years — though neither have confirmed it.

Assuming all of these new machines arrive as predicted, they’ll hit store shelves at nearly the exact moment when the venerable game console, and the business model that sustained it, became obsolete.

There's our central thesis. Let's just make a note of that for now.

The last generation of devices has been bigger than any previous one. Microsoft, Sony and Nintendo combined have moved over 225 million home game consoles since their launches in 2005 and 2006. That’s a stunning success, especially when you consider the consoles were just a Trojan horse for the real business of selling billions of game titles at a wallet-thinning $40 to $60 a pop.

...

Nearly seven years have elapsed since Xbox got an update — an eternity in hardware manufacturing. In that time, the $67 billion worldwide game business has shifted radically, forcing far-reaching changes in everything from pricing, game design, distribution, audience expectations and devices.

I believe this is the first error – new paradigms and models have undeniably become more prominent, some spectacularly so, but this is not necessarily a full-market shift. Not either/or. In additon-to. We still have the old guard and the new guard (iOS and the like), apart from a couple of crazy shining stars financially, has not in fact made much of a dent in any market apart from what Nintendo is trying to court, arguably.

Anticipating the shifting sands for consoles, Microsoft this week unveiled a slate of new features for Xbox that aim to turn it into a new type of entertainment platform with hooks to mobile devices, cheap gaming apps, video streaming and music — a move that comes even as it is poised to release the latest sequel in its blockbuster Halo franchise. The dual message couldn’t more clear: Consoles are bigger than ever, and they need to change immediately, or die.

PS4 just crested 6 million sold. Xbox One is clobbering Xbox 360 in sales. Handhelds are struggling – but that's not strictly the console market. The Wii U is practically stillborn, however, but that has as much to do with their own very specific shift towards the casual market (and rejection thereof). Nintendo tried to change the most, and they have had the least success. Quite the opposite, it's a disaster. They changed immediately and died.

The videogame console as we’ve always known it actually died a few years ago. It keeled over somewhere around the time that Microsoft redesigned the Xbox 360’s user interface so you had to tab through “Bing,” “Home,” “Social” and “Video” before you got to the tab marked “Games.” Ever since, the big three makers have been bending over backward to show that their boxes aren’t just dumb game players but connected everything-machines that play more Hulu than Halo.

Actually, Netflix and Halo. The rest of the "smart apps" have barely made a scratch. You could make a case for HBO GO. The rest is just bonus. No one cares as long as they can play and chat online. Modern TVs come with smart apps built in and even then when we say "smart apps" we're mostly talking about Netflix and services like it, which tend to skew geographically (LOVEFiLM in UK, Amazon/Hulu in USA etc).

“Everybody who is paying attention is seeing the tectonic plates under the game industry shifting pretty dramatically,” says David Reid of CCP Games, which is bringing a free-to-play shooter called Dust 514 to Sony’s PlayStation 3. “The core model is eroding.”

Well even CCP paid lip service to this, but again I believe the problem is not one of erosion, but simply a new entrant, a new model, that was disruptive but not any more so than, say, World of Warcraft, which did not annihilate the PC game market.

Consoles used to do everything best, but those strengths are now being wiped away. Unlike PC games, which may require finicky custom settings, consoles “just work,” fans have long pointed out. Well, so does the iPad. Consoles are cheaper than PCs? Not when you factor in the growing disparity in game prices. Consoles have all the good content? Well, if you want Nintendo- or Sony-exclusive games, you’ll need to buy their hardware. But for many gamers, Angry Birds is becoming more attractive than Mario.

This para... jeebus. I just couldn't disagree more. Consoles have never done anything best other than ease-of-use and immediacy, and even then not always. And I don't think anyone actually prefers Angry Birds to Mario who's over 6 years old. I think they prefer Minecraft to both, actually.

These days, makers of high-end console games need to sell more and more copies, at higher and higher prices, because triple-A game development is getting exponentially more expensive. That’s creating sticker shock for fans, who are increasingly being asked to pay far more than the standard $60 to absorb crippling development costs. Game publishing giant Ubisoft’s plan to squeeze $150 out of its most diehard Assassin’s Creed III players on day one is typical: $120 for a “limited edition” game package and $30 for a “season pass” of downloadable extra game content, to be drip-fed over the next year.

...

“In game design,” says Red 5’s Kern, “the optimal strategy for any game tends to fall to the player known as the min-maxer. A min-maxer quickly finds the advantageous parts of the game and optimizes by dumping all of their gold, all of their skill points into the things that allow them to win the game. And they put nothing into the other stuff.”

“Game companies can’t have it both ways. They’ve got to min-max.”

Sony has seemingly discovered exactly how to not min-max, and it's called courting indie developers aggressively. They now have a steady roll of low-priced, indie games, filling out the former "B tier" quite handily, and neatly sidestepping the pricing and uber-budget problem of the bigger companies (see AC3 vs AC4 below).

I'm gonna leave out the Peter Moore quotes.

The PC stuff:

Now, PCs are eyeing the living room. Valve recently introduced Big Picture mode to Steam, an interface designed for big screens 10 feet away from the couch. Plug your PC into your television — it’s easier than ever because they both use HDMI cables now — and you might start asking yourself: Why do I need an Xbox?

Oh, I dunno, maybe it's because that Linux catalog ain't so hot, you know?

It's early days for Big Picture and Steam Machines yet, but they are not really setting the world on fire, safe to say. The Machines initiative in particular seems confused and incoherent.

Assassin’s Creed III, says its creative director Alex Hutchinson, is “not just the biggest game I’ve ever worked on, but probably the biggest that Ubisoft’s ever worked on.” Hell, maybe it’s the biggest game ever. Hutchinson says development was spread out across five studios flung across every corner of the globe: Montreal, Annecy, Singapore, Bucharest and Shanghai.

“Three years, hundreds of people, far too much money,” he says of the game’s development.

Speaking to Edge magazine earlier this year, Hutchinson called his game “the last of the dinosaurs.” In a follow-up interview with Wired, he said that he didn’t mean to imply they were about to die out — just that he’s noticed there are increasingly fewer of them.

So Ubi continued going straight down the former road – and AC4 just blew that game away with pretty much exactly the same dev process. Sales wise & quality wise.

I do agree that there may well be increasingly fewer "monster games" but compared to the past, there never were a huge number of those games to begin with, and they almost never sold what modern games sell. Absolutely there are budget problems at the AAA end, much like big feature movies, but I can't take that and project it everywhere. The documentary renaissance of the last few years reminds me of the Indie game renaissance very closely and I can't see how the budget of John Carter much affects the budget of Jiro Dreams of Sushi, at an industry level, or any level really.

Mark Kern, who led the development of the massively multiplayer game World of Warcraft, now leads Red 5 Studios and is hard at work on its first game FireFall, a PC first-person shooter aimed at getting hardcore gamers to embrace free.

Shoulda picked League of Legends

“At some level, every hobby has its aficionados,” says CCP’s Reid. “You could play golf with ratty clubs and walk around the field yourself, or you could get the best clubs and plate your golf cart with platinum.” Electronic Arts founder Trip Hawkins echoed this sentiment in a recent interview, saying consoles would become a “hobby market.”

But in saying that game consoles will become the domain of a selective group of enthusiasts, Reid and Hawkins might be writing consoles’ obituary. Call of Duty can’t put up the massive numbers it needs to with a small base of hobbyists. Nintendo, Sony and Microsoft need to continue to produce game hardware that is desired by a mass market — and they won’t be able to do that by digging in their heels on old models.

If Kern were to design a game console, he says he’d forget about adding fancy new hardware and concentrate on embracing a radical new business model.

“I’d figure out, how do we get gamers playing any games they would like to play, at free or close to free,” he says. “When I can try someone else’s games for a buck, why should I pay 60 bucks to try your game — especially if I hear that it’s more of the same?”

The sales of GTA V, and now the PS4, have wiped this argument off the face of the earth. Sony is doing almost exactly what the article is warning about – treading the same path, just more power and still high-priced relative to mobile – and it's a huge success.

How do we account for this?

In my mind, and throughout all my 30+ years of playing video games, apart from the Atari "crash" I have never really seen the industry collapse. It just gets bigger and bigger. Sure there are up and down years but overlal the trend seems clear. And new methods and platforms spring up, and sure some of them make preposterous amounts of money (truly)... but I think we really need to rethink this idea that it means other models will be replaced. Games seem to be resembling book publishing more and more these days; high downward price pressure keeping things mostly in check; nascent digital models actually supplementing, rather than supplanting, the old brick-and-morter/physical copy ways... hell, even the #noDRM backlash that has kept discs working full time on the Xbox One... nothing got replaced. It just grows and grows and mutates and stumbles and keeps growing, in every direction. Mobile, VR, everywhere.

The home console is anything but obsolete. It has raged back harder than ever. It just has lots of company now.

This turned out much longer than I expected it to, sorry about that. Still love ya Chris.

 

[anexanhume]

I always think of a large pool with a divider in it. You add water (players) with the promise of mobile games, then you remove the divider and water rushes to fill the empty side separated by the divider. It peaks on the new side, but then sloshes back and settles even across the entire pool eventually. People are pointing to that peak and claiming its the new norm. Overall, you've added more gamers. You can't suggest that people will leave consoles for mobile because "it's good enough" without also acknowledging the possibility that people who start with mobile migrate to PC and console. Mobile is also increasing gender acceptance of gaming amongst women. That's only good for the hobby as the stigma is removed from all forms of gaming and it hopefully pushes out the bigoted and misogynistic elements that people use to dismiss games as a legitimate entertainment medium.

 

[Curufinwe]

Kohler also called Super Mario 3D World "vaporware" in the same calendar year it was released, and has very unrealistic expectations for how powerful mobile devices will be in the near future compared to the PS4 and Xbox One.

 

[Draft]

Well, alright, but the most company most successful at selling consoles in 2014 seems to be always one quarter away from insolvency, the second most successful company is rumored once a month to be shopping their console business, and the third most sucessful company is on the verge of throwing out their CEO and throwing in the towel on the great smartphone boycott. So I dunno, maybe it's too soon to disagree with Mr. Kohler???

 

[Oppo]

I always think of a large pool with a divider in it. You add water (players) with the promise of mobile games, then you remove the divider and water rushes to fill the empty side separated by the divider. It peaks on the new side, but then sloshes back and settles even across the entire pool eventually. People are pointing to that peak and claiming its the new norm. Overall, you've added more gamers. You can't suggest that people will leave consoles for mobile because "it's good enough" without also acknowledging the possibility that people who start with mobile migrate to PC and console. Mobile is also increasing gender acceptance of gaming amongst women. That's only good for the hobby as the stigma is removed from all forms of gaming and it hopefully pushes out the bigoted and misogynistic elements that people use to dismiss games as a legitimate entertainment medium.

The point about female players is a good one. Many of those are players that simply didn't exist before (F2P and mobile in particular), as well as videogames just generally, slowly, becoming more socially acceptable in the West, as the population ages.

Well, alright, but the most company most successful at selling consoles in 2014 seems to be always one quarter away from insolvency, the second most successful company is rumored once a month to be shopping their console business, and the third most sucessful company is on the verge of throwing out their CEO and throwing in the towel on the great smartphone boycott. So I dunno, maybe it's too soon to disagree with Mr. Kohler???

Maybe – but I can't help but notice, those examples all have nothing to do with the actual video game industry. Sony's hardware/yen suffering, Microsoft's CEO/direction issues, etc. They are specific to each.

 

[entremet]

I still think Kohler is going to be right in the near future.

Young kids are going to be growing up with mobile and tablet gaming. It's going to be hard to sell them on 60 dollar games as they age. The average age of console gamers will keep getting older and older. It's already close to 30, which seems crazy for such a youth focused demographics, at least in the content from AAA publishers--mostly immature male power fantasies.

 

[Gannd]

I think he's right. The console is already dead. I think more people will see it in a few months from now when the PS4 declines and even moreso in a year from now.

 

[FrankCaron]

I count myself among the Kohlers as I was immensely doubtful of the initial sales of the new gen of consoles. I went so far as to bet on the Wii U in spite of being a Sony diehard, because I felt the gen was going to be the end, and at least I'd get a few good Nintendo games out of it.

I deeply regret my decision, because for the most part, I've been proven wrong; initial inertia is strong for both, and Titanfall will move Xbones whilst supply will move PS4s well into the fall.

Given that supply will finally be "everyman" levels by the holiday, I suspect 2014 will go out with another sales bang for both consoles.

The real question left is how will the big AAA promises pan out. FFXV / KHIII will have the weight of the world on their shoulders, as far as I'm concerned; if those two bomb like 13 did relative to its heritage, I know I won't be the only to be done with console gaming forever. The delays of Watch Dogs point to this; triple A games are in trouble save GTA.

That said, Sony's bet with Galkai was perhaps the most forward-looking and masterstroke of any of the big three; Playstation games will remain indefinitely relevant once consoles do indeed die, of that I am confident and would bet.

 

[mr teaspoon]

Great read and great points, OP.

 

[FlyinJ]

I see about 5-10 women playing Candy Crush or something similar on the subway every day.

Before smart phones, I'd see maybe 1 woman every 1-2 weeks playing on a DS or Gameboy on the subway.

A large portion of this huge influx of money into mobile is from a massive new audience that simply didn't exist before.

 

[Sydle]

It's too early to tell if he's ultimately wrong. At this point, the PS4 and Xbox One are selling to enthusiastic console gamers that wanted new hardware a year or two ago.

Will be interesting to have this discussion 2-3 years from now when we actually have some trends in the new generation. Three months of data is not enough.

 

[Saberus]

I think he's right. The console is already dead. I think more people will see it in a few months from now when the PS4 declines and even moreso in a year from now.

joke post?

 

[Tuck]

Well, alright, but the most company most successful at selling consoles in 2014 seems to be always one quarter away from insolvency, the second most successful company is rumored once a month to be shopping their console business, and the third most sucessful company is on the verge of throwing out their CEO and throwing in the towel on the great smartphone boycott. So I dunno, maybe it's too soon to disagree with Mr. Kohler???

To be fair, Sony's issues aren't really centered around the playstation business. They ahev other issues.

 

[bigkrev]

There will always be a market for the big AAA Call of Duty/Assassin's Creed/Halo "event" type game. There will always be a market for the NBA2K/Fifa/Madden sports game. I don't know what the future holds for everything else though. I think its fair to say that F2P/Mobile has eaten up a large portion of the handheld market- the types that bought Nintendogs, Brain Training and Cooking Mama. It also appears that the Wii Sports/Just Dance audience is gone for F2P/Mobile as well, though Just Dance is still selling fine.

It's not that the console is dead, but the Console war might be. There is certanly a space in the market for a dedicated gaming console, but is there space for more than just 1 of them?

 

[autotwilo]

Isn't it rather unfair to attack an article from some 16 months ago substantially on the basis of what you've learned in the time since it was published? You can't fault Chris for not accounting for, e.g. X1 and PS4 sales, when neither console existed in official capacities at the time and of the 3 "new" devices on market at the time, the Vita and Wii U were struggling badly.
You don't need Linux to plug your PC into your TV, though the pricing and accessibility of PC gaming has certainly led to it eating up a big bit of the console space regardless of whether you do it on the TV or not.
Consoles aren't going away, but they're not the growth industry they have been in the past. Videogames however, are doing just fine.

 

[Oppo]

Isn't it rather unfair to attack an article from some 16 months ago substantially on the basis of what you've learned in the time since it was published? You can't fault Chris for not accounting for, e.g. X1 and PS4 sales, when neither console existed in official capacities at the time and of the 3 "new" devices on market at the time, the Vita and Wii U were struggling badly.

That's why I tried to qualify it as not too serious an "attack"; you're right, it's easy in hindsight. But at the same time, he's the one who stuck his neck out and wrote it, so it's fair game

 

[Somnid]

I think people love to be overdramatic about things, it's sort of a cultural habit of the internet. It emphasizes a point but I find it to be bad writing. It's overdone and really a good argument will win over attention grabbing hyperbole, maybe not in clicks but in informativeness.

I think he has a point. I don't think consoles will go away (and neither does Kohler) but the landscape is changing (again). Everything will bump up and have to find its room and there will be less of it to go around but everything will co-exist to some extent. I mean FFS we still have vinyl records (and CDs) and people who still buy them, we still have books, we still have board games, people still listen to the radio. It's just less than it was.

That won't change, if you are upset that this is probably what's happening it can't be helped and it won't change. Rather, the concern should be for how we breed the culture. I think a ton of AAA M-rated titles was bad for gaming, we shouldn't have gone that route. I think creating deceptive pricing schemes and labeling them "free" is bad for gaming and creates unrealistic consumer expectations. I think think devaluing games with frequent and constant firesales tells people it's disposable and puts your AAA game on the same level as Angry Birds and makes it hard for people to care about high-quality endeavours and more concerned about deals.

I worry more about devaluing than what exactly I'm playing my games are on because I like quality experiences. That's fixable if we try to develop a non-toxic culture but in many respects we are not doing that.

 

[mclem]

I believe this is the first error – new paradigms and models have undeniably become more prominent, some spectacularly so, but this is not necessarily a full-market shift. Not either/or. In additon-to. We still have the old guard and the new guard (iOS and the like), apart from a couple of crazy shining stars financially, has not in fact made much of a dent in any market apart from what Nintendo is trying to court, arguably.

I would suggest that the problem is not the market shrinking; the problem is the market not growing. The pool of money that people will spend on games is not increasing in accordance with the budgetary increases.

PS4 just crested 6 million sold. Xbox One is clobbering Xbox 360 in sales. Handhelds are struggling – but that's not strictly the console market. The Wii U is practically stillborn, however, but that has as much to do with their own very specific shift towards the casual market (and rejection thereof). Nintendo tried to change the most, and they have had the least success. Quite the opposite, it's a disaster. They changed immediately and died.

I maintain that Nintendo did the right thing unsuccessfully, and the PS4 and Xbox One are doing the wrong thing very successfully indeed. Something needs to happen to increase the audience playing games, and neither of the two newer systems are demonstrating to me that they can do so as yet. Attach rates are... distressing, although it's only early days, and I'm sure the tentpole releases will be able to continue just fine.

Well even CCP paid lip service to this, but again I believe the problem is not one of erosion, but simply a new entrant, a new model, that was disruptive but not any more so than, say, World of Warcraft, which did not annihilate the PC game market.

Nope, but it did eat up an awful lot of the money and time that other MMOs would thrive on.

Sony has seemingly discovered exactly how to not min-max, and it's called courting indie developers aggressively. They now have a steady roll of low-priced, indie games, filling out the former "B tier" quite handily, and neatly sidestepping the pricing and uber-budget problem of the bigger companies (see AC3 vs AC4 below).

Fine for Sony. Kinda shitty for one of said 'bigger companies'. Particularly because the AAA games, while I do think they're problematic for the industry in a few ways, are absolutely the big exciting figureheads that actually make people buy consoles. I liked Thomas Was Alone, really I did, but it's not why I bought a PS3. And, of course, all these indie titles are also eroding the same pool of money that the AAA titles are desperately trying to hang on to.

Oh, I dunno, maybe it's because that Linux catalog ain't so hot, you know?

It's early days for Big Picture and Steam Machines yet, but they are not really setting the world on fire, safe to say. The Machines initiative in particular seems confused and incoherent.

I have my Windows laptop plugged into the telly, and if I want a game it can't run, I can stream it from my beefier desktop upstairs. Big Picture isn't just for Steam Machines.

So Ubi continued going straight down the former road – and AC4 just blew that game away with pretty much exactly the same dev process. Sales wise & quality wise.

I do agree that there may well be increasingly fewer "monster games" but compared to the past, there never were a huge number of those games to begin with, and they almost never sold what modern games sell. Absolutely there are budget problems at the AAA end, much like big feature movies, but I can't take that and project it everywhere. The documentary renaissance of the last few years reminds me of the Indie game renaissance very closely and I can't see how the budget of John Carter much affects the budget of Jiro Dreams of Sushi, at an industry level, or any level really.

You don't need to project it everywhere. That's not Kohler's point. The point is that with increasing consolidation behind a few AAA titles, suddenly the high-profile lineup of games consoles looks a lot more anaemic and less enticing in terms of variety, and playing it increasingly safely to ensure they don't risk losing any part of that pie they're hanging on to for dear life.

And if you take AAAs out of the marketplace completely... you're left with indies. Which are great. I'd be fine with that. But they don't sell hardware. The only indie I've played on PS4 that particularly looks like it needs the power of PS4 is Resogun, and that's largely in the form of unnecessary background eyecandy. Without AAAs, why purchase a PS4?

The sales of GTA V, and now the PS4, have wiped this argument off the face of the earth. Sony is doing almost exactly what the article is warning about – treading the same path, just more power and still high-priced relative to mobile – and it's a huge success.

The games simply aren't. At least yet. And some will be, absolutely - and that's a sign of increasing consolidation behind only a few viable titles. That is not healthy for the industry.


In conclusion:

Painting it as a 'crash' is inaccurate. It's a handy term to use, but it conveys the wrong thing. We have a fixed pool of money that's not growing, and we have increasing development costs that are. That's absolutely necessarily going to result in consolidation behind only a few major franchises. You'll still get GTA, you'll get Assassin's Creed, you'll get Call of Duty.

You just won't get anything particularly exciting.

Tell me where more consumer money will get injected into this system - around 20% more than previous generations, based on Wedbush Morgan's projections - and then I might agree that everything is just peachy.

 

[RuneFactoryFanboy]

I feel as though anyone who makes a statement like “Gaming is going mobile, it’s the future” doesn’t really play video games. I can’t fathom that anyone who enjoys typical console games would be completely satisfied with what mobile offers right now (or where it’s going).

I’m playing through Disgaea 3 right now. Before that it was Rune Factory 4. Before that it was Mario 3D World. Name me a single original Mobile game that comes close to the level of polish, depth and overall meat of these games.

Mobile platforms cannot sustain the level of quality games developed for consoles have. The top charts have forever been dominated with done-in-flash quality time waster games, with all of the halfway decent games being completely lost in the sea of junk. There is a constant race to the bottom pricing structure because the consumer expectation is that games should not cost more than a few dollars. Every article I've read about Mobile domination says the same things. "The graphics are as good as Xbox". "The games cost a fraction of the $60 console game". All of which fail to mention that these cheap, pretty mobile games are shallow as hell.

Mobile games have their own place and market. While there may be a little overlap, I don’t believe it's a replacement for what current games offer. Your Call of Duty consumer is not going to download Dead Trigger and say “meh, this is good enough”.

 

[Canis lupus]

I think he's right. The console is already dead. I think more people will see it in a few months from now when the PS4 declines and even moreso in a year from now.

You doubters keep us waiting for this moment when PS4 starts to tank so you can go "see we told you! ha! console am dead!" on us but it's still not happening.

 

[Oppo]

You doubters keep us waiting for this moment when PS4 starts to tank so you can go "see we told you! ha! console am dead!" on us but it's still not happening.

Hey now. Sales are good but Don't Read Too Much Into It

 

[AstroNut325]

Um... I'm waiting at least until the second holiday season for the consoles to make such a claim. At this point in time I think it's BS and shortsighted to claim consoles are dead. Yes I too have witnessed more younger people preferring mobile/iOS gaming. But that does not preclude them from also enjoying/wanting a more grand scale experience that you can get on consoles. It's not like the 30 million people who bought GTA5 are going to disappear and stick to Clash of Clans and Candy Crush for their gaming needs for the rest of their lives.

 

[Sydle]

You doubters keep us waiting for this moment when PS4 starts to tank so you can go "see we told you! ha! console am dead!" on us but it's still not happening.

I don't think anyone is expecting PS4 to tank, that's a bit dramatic. Even a year from now it will still be selling to core console gamers.

It's more about seeing if the market is growing or shrinking for living room game consoles. Does a shift take place towards multi-purpose devices like it did in the handheld market? That didn't happen over night either. It's going to be a while before we can see either way.

 

[Kobun Heat]

Hi! (For those of you who just joined GAF last week, I am the author of this piece.) Thanks OP for the polite disagreement. I appreciate it!

I went back and re-read the piece just now. I still agree with the fundamental arguments -- now more than ever!

- In one sense, the game console is already dead insofar as everybody is now on board with the idea that you cannot sustain the $400 console, $60 game model as your only revenue stream anymore.

- In another sense, I still believe that the console is dead in the "beyond the point of no return" sense -- that the market peaked with the insane highs of the 360/PS3 era and that this cycle will not see growth and/or shrink considerably. Things don't just disappear overnight, of course.

Latent demand for new machines after a prolonged console cycle has caused Xbox One and PS4 to sell very fast out of the gate. But you may have also noticed that Wii U crashed and burned spectacularly That's a game console, and maybe the consoliest console of them all insofar as it's likely the one viewed most strongly by any given consumer as a pure gaming machine rather than an all-in-one entertainment device.

After the publication of this story, THQ -- one of the biggest publishers of the last generation -- went out of business. The hit-driven model is becoming increasingly risky. We're watching as the major publishers do what I described EA doing in that piece; attempting to diversify as much as possible and scale down their catalogs of next-gen games.

I mean, have you seen what's been happening? You have a tiny handful of publishers putting out a tiny handful each of $60 games, and even then the vast majority of them so far have been cross-generation. The *amount* of $60 games that any one player will buy is shrinking, and I don't think we've seen the shit really hit the fan on that yet. I think it will happen during this console cycle.

Sony's indie push and Microsoft's belated post-Mattrick one are smart moves, and I think they're driven by the same realization I had -- that if you want content on your box you have to reach out to a different group of developers, which means changing the way you do things. I think Sony and Microsoft saw the writing on the wall and are attempting to make their machines compatible with many different business models, so that they can survive the end of the game console's era of dominance. PlayStation Now is another major bet-hedging move. I think 2014 is going to be very interesting and bring even more huge changes.

Attempting to read the tea leaves and predict the future is bound to lead to reactions like this, and if you do it far enough out you'll get reactions like this for a while. But if you wait until something is obvious, well, by then it's obvious.

For example -- NEC released the TurboGrafx-CD in Japan on December 4, 1988. Nineteen eighty eight. To put that in perspective, twenty days later Capcom released Mega Man 2.

At that point, if you were to look at CD-ROM gaming and say -- rightly! -- that the ROM cartridge was irrevocably fucked, people could have basically called you an idiot for the next, like, six years. Nintendo and Sega still had dozens of big cartridge hits in front of them, but the wheels were inexorably in motion and eventually it would become impossible to sustain the business. It's the very paradox invoked by Kenshiro up there -- no matter how alive you feel right now, your fate has already been written.

 

[FoneBone]

Really, really silly. Sure, the new consoles launched very strongly (well, PS4, anyway), but it's way too soon to conclude that the console market is fundamentally healthy.

 

[Abounder]

Consoles won't die for at least two more generations, especially if Virtual Reality becomes a success. That doesn't mean there won't be flops and plenty of businesses closing down, but that's almost the norm when it comes to tech where outsourcing seems like the smart decision to make (retail vs digital is another war). Sony and Microsoft have too many paying subscribers just to write them off.

Well, alright, but the most company most successful at selling consoles in 2014 seems to be always one quarter away from insolvency, the second most successful company is rumored once a month to be shopping their console business, and the third most sucessful company is on the verge of throwing out their CEO and throwing in the towel on the great smartphone boycott. So I dunno, maybe it's too soon to disagree with Mr. Kohler???

And yet Amazon is primed to release a console, Valve has Steam Machines with an innovative controller, and there's the Oculus Rift.

 

[Oppo]

Hi! (For those of you who just joined GAF last week, I am the author of this piece.) Thanks OP for the polite disagreement. I appreciate it!

So do I – thanks, Chris.

I went back and re-read the piece just now. I still agree with the fundamental arguments -- now more than ever!

- In one sense, the game console is already dead insofar as everybody is now on board with the idea that you cannot sustain the $400 console, $60 game model as your only revenue stream anymore.

I'm considering the inflation argument in this aspect. Games have been $60 for ages... decades. Even as costs have spiralled. That has to have an effect as well, w/r/t microtransactions, DLC, "milking", etc.

- In another sense, I still believe that the console is dead in the "beyond the point of no return" sense -- that the market peaked with the insane highs of the 360/PS3 era and that this cycle will not see growth and/or shrink considerably. Things don't just disappear overnight, of course.

Do you mean less consoles overall, or less revenue?

Latent demand for new machines after a prolonged console cycle has caused Xbox One and PS4 to sell very fast out of the gate. But you may have also noticed that Wii U crashed and burned spectacularly That's a game console, and maybe the consoliest console of them all insofar as it's likely the one viewed most strongly by any given consumer as a pure gaming machine rather than an all-in-one entertainment device.

I disagree. The Wii U is the least "consoliest" console. We didn't even know what the console actually looked like, because Nintendo hid it from us. The other two (xbox and ps) look the most like regular, familiar consoles. They didn't just sell "very fast" either, they broke records; second only to the Wii and PS2 in the PS4's case.

After the publication of this story, THQ -- one of the biggest publishers of the last generation -- went out of business. The hit-driven model is becoming increasingly risky. We're watching as the major publishers do what I described EA doing in that piece; attempting to diversify as much as possible and scale down their catalogs of next-gen games.

THis is true, and a good point, although I can't help but notice that the major decision on THQ's part that caused all the strife – the uDraw tablet – looks an awful lot like the play Nintendo tried to make.

I mean, have you seen what's been happening? You have a tiny handful of publishers putting out a tiny handful each of $60 games, and even then the vast majority of them so far have been cross-generation. The *amount* of $60 games that any one player will buy is shrinking, and I don't think we've seen the shit really hit the fan on that yet. I think it will happen during this console cycle.

Has the amount shrunk? What makes you think so? Has the number of big publishers really gone down all that much? I'm asking; I don't actually know... but it doesn't feel that way. Yes we no longer have a "square" and an "enix" separately but Square Enix's output seems similar to what the two did separately, prior. Maybe even more. Sega puts out PC games now!

Sony's indie push and Microsoft's belated post-Mattrick one are smart moves, and I think they're driven by the same realization I had -- that if you want content on your box you have to reach out to a different group of developers, which means changing the way you do things. I think Sony and Microsoft saw the writing on the wall and are attempting to make their machines compatible with many different business models, so that they can survive the end of the game console's era of dominance. PlayStation Now is another major bet-hedging move. I think 2014 is going to be very interesting and bring even more huge changes.

Agree with this, although I wouldn't classify Now as a hedge; more of a strategic move. It does support your original point, if not the timeline you described

Attempting to read the tea leaves and predict the future is bound to lead to reactions like this, and if you do it far enough out you'll get reactions like this for a while. But if you wait until something is obvious, well, by then it's obvious.

Of course. *hat tip*

For example -- NEC released the TurboGrafx-CD in Japan on December 4, 1988. Nineteen eighty eight. To put that in perspective, twenty days later Capcom released Mega Man 2.

At that point, if you were to look at CD-ROM gaming and say -- rightly! -- that the ROM cartridge was irrevocably fucked, people could have basically called you an idiot for the next, like, six years. Nintendo and Sega still had dozens of big cartridge hits in front of them, but the wheels were inexorably in motion and eventually it would become impossible to sustain the business. It's the very paradox invoked by Kenshiro up there -- no matter how alive you feel right now, your fate has already been written.

Well I was around for that, and my memory says that CD-ROMs were obviously, blatantly superior, as soon as they appeared. I remember that. I remember saying things like "games can have actual real soundtracks now" and lots of fun hyperbole around "we'll never fill one of those disks! 640 MB, holy hell, the sky's the limit!" They just cost too much at the time. TurboGrafx was ahead of it's time at any rate. They had cross-buy physical games that worked on the home console or portable (that no one had). They're a weird example.

But then again I had an Amiga CDTV so I'm a weird example as well.

 

[Draft]

Consoles won't die for at least two more generations, especially if Virtual Reality becomes a success. That doesn't mean there won't be flops and plenty of businesses closing down, but that's almost the norm when it comes to tech where outsourcing seems like the smart decision to make (retail vs digital is another war). Sony and Microsoft have too many paying subscribers just to write them off.



And yet Amazon is primed to release a console, Valve has Steam Machines with an innovative controller, and there's the Oculus Rift.

All three being alternatives to the kind of console the OP's article decreed as dead...

 

[Oppo]

All three being alternatives to the kind of console the OP's article decreed as dead...

He didn't say "some", he said "consoles are dead and have been for awhile". Even pinpointed the time.

I don't see "connected device" as something other than a console. I see it as a very natural evolution.

 

[xsarien]

At that point, if you were to look at CD-ROM gaming and say -- rightly! -- that the ROM cartridge was irrevocably fucked, people could have basically called you an idiot for the next, like, six years. Nintendo and Sega still had dozens of big cartridge hits in front of them, but the wheels were inexorably in motion and eventually it would become impossible to sustain the business. It's the very paradox invoked by Kenshiro up there -- no matter how alive you feel right now, your fate has already been written.

Big ol' pile of THIS.

I'm personally hoping for a future where there's no distinction between handheld gaming and traditional "console" gaming. We're already getting a taste with Cross Play with the Vita and PS3/4, and I suspect that the next Apple TV will take it even further than just mirroring iPad/iPhone games.

 

[turnbuckle]

Latent demand for new machines after a prolonged console cycle has caused Xbox One and PS4 to sell very fast out of the gate. But you may have also noticed that Wii U crashed and burned spectacularly That's a game console, and maybe the consoliest console of them all insofar as it's likely the one viewed most strongly by any given consumer as a pure gaming machine rather than an all-in-one entertainment device.

I agree with much of what you've said, but the Wii U lacking power and features of the PS4/XB1 doesn't somehow back up your argument. Consoles adapting to changes in consumers' habits (making them less "consolie") is a good thing and extends their life and utility.

I certainly agree that people are jumping the gun thinking the extraordinary early sales of the XB1 and especially the PS4 are indicative of a healthy console market. Looking at release lineups, outside of Titanfall or what Nintendo has coming for the Wii U I don't see a lot of significant, system selling software. And Titanfall's impact on next gen sales is heavily diluted by the 360/PC release.

I won't be surprised if we're seeing a completely different tone on the PS4's success in the next couple of months. I love my PS4, and our household actually has 3 of them (brother, roommate) but there's not a lot coming soon for people that weren't interested in picking one up a couple months ago.

 

[Graphics Horse]

Sega puts out PC games now!.

Sega have almost completely pulled out of console games, outside of Sonic and Alien franchises.

 

[mattiewheels]

Kohler also called Super Mario 3D World "vaporware" in the same calendar year it was released, and has very unrealistic expectations for how powerful mobile devices will be in the near future compared to the PS4 and Xbox One.

Wasn't he just talking about X when he said that? Because I could understand that, it was like barely a zygote of a game when the announced it in that Direct.

 

[Draft]

He didn't say "some", he said "consoles are dead and have been for awhile". Even pinpointed the time.

I don't see "connected device" as something other than a console. I see it as a very natural evolution.

I'm not going to put words in anyone's article but am pretty confident the subject of the article in the OP are Nintendo, Microsoft, and Sony's game consoles. If the article was predicting Ouya's death well wow, do you have any stock tips Kobun Heat??

 

[FoneBone]

Big ol' pile of THIS.

I'm personally hoping for a future where there's no distinction between handheld gaming and traditional "console" gaming. We're already getting a taste with Cross Play with the Vita and PS3/4, and I suspect that the next Apple TV will take it even further than just mirroring iPad/iPhone games.

OT but when the hell did you come back? I haven't seen you post in years. (Welcome back, btw.)

 

[Abounder]

All three being alternatives to the kind of console the OP's article decreed as dead...

I agree with Nerfgun: those devices are evolution of the console idea as 'the entertainment system' (RIP NES). EDIT: In the case of just the big 3: I think they're here to stay even without Virtual Reality becoming a hit because of their subscribers (minus Nintendo) and content library, but Nintendo really needs to catch up.

Big ol' pile of THIS.

I'm personally hoping for a future where there's no distinction between handheld gaming and traditional "console" gaming. We're already getting a taste with Cross Play with the Vita and PS3/4, and I suspect that the next Apple TV will take it even further than just mirroring iPad/iPhone games.

If Virtual Reality becomes successful then I think there will be even more distinction between gaming types.

But I do hope 'remote play' like what we saw in the Shield, Vita, Wii-U, etc. will become standard.

 

[xsarien]

OT but when the hell did you come back? I haven't seen you post in years. (Welcome back, btw.)

I was bored a few weeks ago, something made me wonder if my login still worked, and inertia kind of just took over.

(Thanks)

But I do hope 'remote play' like what we saw in the Shield, Vita, Wii-U, etc. will become standard.

I wasn't even thinking of Remote Play, but: That too!

 

[Draft]

I agree with Nerfgun: those devices are evolution of the console idea as 'the entertainment system' (RIP NES)



If Virtual Reality becomes successful then I think there will be even more distinction between gaming types.

But I do hope 'remote play' like what we saw in the Shield, Vita, Wii-U, etc. will become standard.

Then I think you actually agree more with the article which also posits that consoles need to change (evolve?) or die...

 

[polyh3dron]

Well, alright, but the most company most successful at selling consoles in 2014 seems to be always one quarter away from insolvency, the second most successful company is rumored once a month to be shopping their console business, and the third most sucessful company is on the verge of throwing out their CEO and throwing in the towel on the great smartphone boycott. So I dunno, maybe it's too soon to disagree with Mr. Kohler???

Sony isn't one quarter away from insolvency due to the console gaming portion of their business, it's because of the PC, TV and very cyclical movie studio portions of their business. People on GAF spewing these Sony doom-and-gloom posts either fail or don't care to acknowledge that the console gaming business is actually one of Sony's brighter points at the moment.

As for MS, they are going through a very large personnel shakeup, and their console gaming business has always been looked at as something of a loss leader so that MS can "get in our living rooms", however nebulous that may seem. Of course with the recent XBOne it's been suffering a bit from the "too many chefs" syndrome, but yeah.

 

[Abounder]

Then I think you actually agree more with the article which also posits that consoles need to change (evolve?) or die...

True but the article mainly focuses on the $60 AAA model. Consoles have generally evolved and been entertainment systems, especially with Playstation bringing CD's, DVD's, Blu-Rays, Netflix, and HTPC support to the living room. And soon Virtual Reality

 

[entremet]

True but the article mainly focuses on the $60 AAA model. Consoles have generally evolved and been entertainment systems, especially with Playstation bringing CD's, DVD's, Blu-Rays, and HTPC support to the living room

They have but that's not really enough to make them attractive buys. You can get Rokus and Apple TVs for much cheaper. Those are just value adds. The people thirsting for PS4 don't care about that stuff. They want to play games on it.

 

[Gannd]

True but the article mainly focuses on the $60 AAA model. Consoles have generally evolved and been entertainment systems, especially with Playstation bringing CD's, DVD's, Blu-Rays, Netflix, and HTPC support to the living room. And soon Virtual Reality

The PS4 is a very expensive box to do those other things.

 

[Tobor]

Has the amount shrunk? What makes you think so? Has the number of big publishers really gone down all that much? I'm asking; I don't actually know... but it doesn't feel that way. Yes we no longer have a "square" and an "enix" separately but Square Enix's output seems similar to what the two did separately, prior. Maybe even more. Sega puts out PC games now!

Yes, the amount has absolutely shrunk, and the writing has been on the wall for years. It's not a secret. EA publicly announced this in 2011.

EA also confirmed that the number of titles it ships at retail is shrinking: 75 titles a few years ago, Riccitiello said, versus 22 at retail in the current fiscal year. What this means, EA said, was two things: one, a plan to milk revenue from a title across multiple platforms, including free-to-play games on social networks like Facebook, DLC content, and other digital goods; and two, a long-term transition to downloaded titles, rather than units consumers would buy into a store.

75 titles a year down to 22 in 2011. And they aren't alone. It's not just the total number of publishers shrinking, it's the amount of titles each can afford to release in a year. As the risk and budgets rise, the numbers will continue to drop.

As has been said, this is why indie developers are so important. Every console's release lineup going forward will look like a desert wasteland without digital content.

http://www.pcmag.com/article2/0,2817,2385019,00.asp

 

[Dragon]

The PS4 is a very expensive box to do those other things.

As opposed to iPhones/iPads which are at the same price or more?

 

[WolvenOne]

- In one sense, the game console is already dead insofar as everybody is now on board with the idea that you cannot sustain the $400 console, $60 game model as your only revenue stream anymore.

Moving the goal posts much?! XD

Dude, we saw budget titles released all the way back during the PSX era, and earlier. What's more, shifting business models hardly means an industry has died.

As for your point about CD's and the Turbo GrafX CD. Yes CD's were around for ages, and yes it took ages for them to supplant cartridges, but I think you're inferring far too much from this fact. The argument strikes me as an excuse for mobile gaming not displacing consoles, rather than a rational argument for why they will.

Also, seeing as the iPhone was introduced in 2007, your argument is largely moot. Yes it can take time for old business models to die, but, by your own argument six or seven years should be sufficient time to see these changes take hold.

As for my own view, I look at it like this. Mobile is a new segment of the gaming industry, nothing more and nothing less. Every time a new market is created, or a new niche in the market is discovered, there's a period of rapid growth. After that, it peaks, and typically declines to some degree or another.

I see no reason why mobile will not follow this same trend. Already we're seeing a lot of crowding in this market, with dozens upon dozens of games blatantly copying every successful title, developers releasing cheap rushed titles riddled with micro-transactions and pay to win mechanics. Collectively, these traits are very similar to the conditions that led to the great video game crash of the 1980's. I expect mobile to be somewhat more resilient, but certain business models used with this segment of the industry are likely to fall out of favor.

I mean, lets face it, if the average Free to Play title really only makes money off 0.15% of the people that downloaded the titles, it wouldn't take much disruption to render this model financially untenable.

Ultimately though, your argument seems to boil down to, consoles are dead because the console gaming business model has changed. This simply strikes me as inherently absurd. The business world is inherently Darwinian in nature, so it's always changing in subtle and sometimes major ways. The market now is different than it was five years ago, then it was ten years ago, then it was fifteen years ago, and so on and so forth.

So you cannot simply declare an industry or business model to be dead every time it undergoes adjustment. By that logic, every industry and every model, would have died a thousand and one deaths by now. Wherein, in reality, it's very rare for any industry and any business model to die off entirely.

 

[Goliath]

Why do people always cite video game companies closing as a sign that consoles and their AAA models are dead and console gaming can't sustain itself?

Didn't we have tons of video game companies close everytime we moved from one generation to the other? I look at some of my NES and Genesis games and see companies that don't exist now. Isn't this just part of this field? Are we thinking it's worse then it is only because we have more info out there and the media outlets love to harp on it? Kind of reminds me of how the media makes it seem like teen pregnancy is an epidemic even though it has remained pretty consistent since the 50s or 60s.

 

[GhostTrick]

I don't think consoles are dead, but the current model will. As far as I'm concerned, the way consoles evolved is the bad way. They got closer to the PC, but not in the good way.

My main problem with the actual video game industry is the concept of console exclusives. I mean, what would you think if you had to own a Sony Blu Ray reader to play Sony movies ?

I think that, for the sake of the industry, home console will have to take the best from PC: A unified OS, different branded machines playing the same games. Of course, the actual manufacturers could still have a way to make their money, by still releasing their own branded hardware and have their own marketplace.

 

[polyh3dron]

The PS4 is a very expensive box to do those other things.

For the first few years of the PS3's life it was the cheapest Blu-ray player out there.

 

[Abounder]

They have but that's not really enough to make them attractive buys. You can get Rokus and Apple TVs for much cheaper. Those are just value adds. The people thirsting for PS4 don't care about that stuff. They want to play games on it.

Agree and disagree. Early adopters buy a PS4 not just for games but because it's a new Playstation. Those value adds are important since the PS3/Xbox were practically Netflix machines. And I'd say a lot of PS4 owners wished the system had PS3 levels of HTPC support.

The PS4 is a very expensive box to do those other things.

Even Virtual Reality? In addition to those other things there's Sony exclusives, twitch streaming, playroom add-on, etc

 

[noobasuar]

Console sales may be doing fine but I'm way more interested in seeing how software does espacially those that are current gen only.

Like if Infamous bombs is that going to spell the end for Sucker Punch? Should be interesting to watch.