Are gaming consoles on the verge of becoming obsolete?
The gaming landscape is constantly changing, what holds true today may be obsolete tomorrow. Shopping for the latest games once meant visiting a physical store, but now it's as simple as downloading them online. Previously, game developers needed publishers to bring their titles to market; now digital platforms allow direct releases. Gaming wasn’t once confined to consoles or PCs; now, even smartphones offer a way to enjoy AAA titles.
Given the rapid evolution over the past decade, it's unlikely that gaming in the next ten years will resemble its current state. In a discussion at IGN Live, GamesIndustry.biz head Christopher Dring engaged with industry leaders to predict the future of gaming.
Consoles have been a cornerstone of gaming for years, but their growth appears to have stalled. Shawn Layden, a consultant at Tencent and former PlayStation executive, commented on this: "Historically, the console install base never exceeded 250 million units globally. The Wii, buoyed by Wii Fit, sold an additional 20 million units briefly, but that wasn't sustainable. The pandemic saw a revenue increase of around 20-25%, but this wasn't due to a surge of new players; it was the existing community spending more. This lack of new users poses a significant threat to the industry."
Supercade author Van Burnham echoed thoughts on future tech, saying, "While a Holodeck-like experience remains a distant dream, consoles will need to evolve to facilitate this future. It all depends on how the industry fosters creativity and sustainability amid a risk-averse environment." She expressed curiosity about how publishers and manufacturers would rise to these challenges.
"The global install base in any console generation never rose above 250 million. Wii Fit [helped sell] an extra 20 million, but that wasn't sustainable"
Shawn Layden
On the other hand, Wedbush Securities' Michael Pachter maintains consoles will remain relevant, albeit with smaller successive generations. "The premier experience will still be on consoles, appealing to a niche of about 200 million people, while billions will consume games differently. The technological convergence is fascinating, with small screens becoming increasingly powerful."
Pachter noted, "Microsoft introduced three new consoles, two of which are digital-only with 1TB hard drives clearly aimed at Game Pass subscribers. Crowded markets demand smart business models, but there will always be console gaming."
Platforms like mobile now support AAA titles; however, hardware limitations make consoles an attractive option. "Nothing replaces the experience of an 85-inch 8K OLED paired with deep narrative games like Resident Evil 4 and The Last of Us," Burnham added, emphasizing the distinctiveness of console gaming compared to PC gaming.
Layden highlighted the economic difficulties in game development: "High-quality games now cost around $400 million and take up to seven years to develop. This financial burden hinders diversity and risks in content, leading to many big-budget games falling into familiar genres and lacking innovation."
He argued that the lack of variety and novel content poses a significant threat: "Reducing entry costs to high-end game development is crucial for diversity. We need not repeat stagnation seen in past generations. For instance, the PlayStation 2 era welcomed diverse titles like Katamari Damacy. Nowadays, most new releases build on previous titles without bringing in fresh ideas, thereby failing to attract new players who've already decided against playing familiar titles like Call of Duty."
Gaming through consoles has been a staple for many, but emerging technologies consistently introduce new ways to engage with favorite games. While game streaming once promised access without the need for high-end hardware, this vision hasn't fully come to fruition.
According to Layden, the main hurdle for streaming has been reliable, high-speed internet access. "In cities like Tokyo, Seoul, or Stockholm, streaming games live is feasible," he explained. "But in places like Stockton, Muncie, Indiana or London, England, streaming remains problematic."
"Nothing will ever replace the experience of having an 85 inch 8K OLED and an experience designed for it"
Van Burnham
Burnham shares this sentiment, citing the struggles of platforms like OnLive and Stadia as evidence. "The technological gap makes it impractical for now," she remarked. Nonetheless, Burnham expressed interest in Netflix's potential in this space.
Despite challenges, Layden believes streaming still has potential. Currently, most cloud platforms serve as mere delivery systems, but they could also provide users with powerful remote hardware. "[Cloud gaming allows] leveraging server-side CPU and GPU power, surpassing what a console can offer at a reasonable cost," he noted. "If servers handle more processing, it opens up exciting possibilities beyond current console capabilities."
Wedbush's Pachter anticipates streaming will "undoubtedly dominate," but doesn't foresee it replacing consoles. "We'll continue using consoles or powerful devices for multiplayer due to latency issues," he stated. "Single-player RPGs can stream without issues; buffering doesn’t kill you. But multiplayer games like Call of Duty? Unlikely to ever stream well. Microsoft’s acquisition of Activision shows their goal for Game Pass integration."
Moreover, the rise of 'metaverse' platforms, such as Roblox and Fortnite, has been significant. These virtual spaces offer various activities, including gaming. Roblox enables users to create and share games, while Fortnite hosts diverse experiences, from games to virtual concerts.
Layden sees metaverse platforms as an interesting addition rather than a threat to traditional single-player games.
Burnham, however, views them as a different industry segment, driven by organic growth rather than intentional planning. "Fortnite's transition from a survival game to a cultural sensation was accidental," she said. "Developers trying to replicate such success often fail, as genuine audience resonance can't be engineered or bought.""Call of Duty's multiplayer on streaming is improbable, but its single-player campaign might be,"
Michael Pachter, Wedbush Morgan
Roblox, despite hosting many in-platform games, hasn't yet sold third-party titles. Pachter attributes this to its aggressive revenue model, where Roblox retains 70% of sales compared to the typical 30% of other platforms. Adjusting this model could help Roblox compete more effectively.
Discussing gaming's future, our panel highlighted key points. Layden mentioned that Microsoft's and Sony's consoles now share similar AMD hardware, resulting in minimal noticeable differences. "Ray tracing differences are minor, and many don't have TVs good enough to see them," he said. "A unified console technology could end the platform wars."
Burnham, meanwhile, envisions innovative gaming environments. "I foresee thrilling location-based gaming experiences, akin to movie theaters," she said. "But generally, we’ll still game at home."
Pachter predicted a shift towards scalable gaming experiences across multiple devices. "Just as film entertainment evolved from theaters to phones, gaming will continue to adapt. Games will be optimized for the device, from phones to large TVs," he explained. "We'll play games everywhere."
Watch the full panel discussion below:
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