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The future of the Console business: is a new Crash in sight?

25 February on Blogs, Editorial  

I guess I like crying wolf. I swear I don’t mean to be alarmist, but this market has been making me more and more nervous for the last few years. We saw Social Games rise and fall in a flash, and I have predicted that from the get-go from the predatory policies Zynga was abusing would lead to it. They lucked out to be in right place at the right time, but instead of nurturing their gold mine, they decided to deplete it as fast as possible, trying to make a buck while disregarding the well being of their own market. Not that everyone is like Zynga - but certain trends may result in similar problems.

Watch Dogs - um dos jogos que borra a barreira entre as gerações

Watch Dogs - one of the games that blurs the generational gap

There has been a lot of pressure by publishers for the release of new and more powerful consoles. Square Enix and Epic were among the companies demanding more horsepower on the consoles as I mentioned before, just as much as companies like EA and Ubisoft were pressuring for the next generation to be released sooner rather than later to revitalize sales. However, the first thing we are seeing is companies cancelling Wii U projects due to poor sales (despite the fact that it has moved more units so far than the PS3 and Xbox 360 at a similar point in their cycles). My concern is the logic being applied here.

I think part of the reasoning is based on looking back at previous generations - historically, the first few console generations were greatly benefited from a generational leap: increased consumer interest was sparked in a significant manner. But there are some very important key differences this time around. A minor one is that most vendors are doing it pretty much simultaneously, and not as staggered as we saw during the fourth and fifth generations - it's a lot easier to see a big jump when the competitor is still mid-generation (remember how long after the Genesis that Nintendo unleashed the Super Nintendo?). And after console titles became lead platforms for the best selling titles, they also held back graphic standards for PC games visual performance. Again, not a big deal, but after the Wii, some wonder how necessary a big improvement on 3D graphics is, since the PC lost its huge lead in graphics. It certainly has not been a deterrent for sales of titles - Halo and Call of Duty sold much better than Crysis, despite less impressive graphics. And with each generation, the improvement becomes harder to notice.

1361908792201But those are smaller details. Publishers expect enormous buzz to come with the launch of new consoles, and overnight increase in sales (as we saw with the Wii U cancellation example I mentioned above). This worked much better when all we had were Core Gamers, who are more invested in tech specs. But since the last generation greatly expanded the public, the Early Adopter is not even close to the market size those companies expect. In fact, those mainstream numbers for titles like Halo and Call of Duty were only achieved once the platforms were made cheap enough so everyone in the college dorm could afford one. Even Nintendo raised their prices with a current gen spec machine. Are publishers really expecting that more expensive machines are going to sell that much better early on?

The first PlayStation lasted well into the PS2's lifecycle, just like the PS2 was still selling until recently. The original Xbox had to be discontinued almost immediately due to the nVidia lawsuit, and the GameCube never got traction to begin with, so the PS2 was the only platform to continue selling into this generation. This time, though, it seems like all three consoles will continue many years into the next generation (as we can see from the Wii still outselling the Wii U, even being graphically two generations behind).

To make matter worse, I keep hearing several reports that the launch window for these machines are going to be composed of several titles being launched simultaneously for current and next-gen machines. Is that a good way to make people open their wallets? I think most are going to be left wondering "why should I upgrade if I still can get most games with the console I already have?" With current-gen consoles strong, the appeal to upgrade will be lowered, and we all remembered how much Sony was hurt by the high price tag of the PS3 in its launch - and that wasn't even during a recession.


Sony: living off of abstracts since the PS2

So now not only will PS4 and the new Xbox come out at roughly the same time, competing with each other for holiday dollars, but we already know transfer of digital PSN titles and backwards compatibility are a no-go for launch - and given the state of the new network features Sony touted looking totally not ready for primetime, the incentives to upgrade seem to vanish by the minute. If people aren't exactly jumping on the Wii U, are people REALLY thinking that the adoption of the other - more expensive - consoles is going to be any faster? And since games are also going to cost more to make, expect more DLC to help make up for that - to make matters worse, Electronic Arts confirmed in its investor meeting that it expects to increase next-gen game prices to $69, pushing raising development costs to the consumer. So... if publishers are already jumping ship on Wii U, what will happen then? Will they just stick to PS3 and Xbox 360 and give up on the next-gen they were pushing so hard for?

I worry a lot, yes. But gaming is in an state of disarray. The wrong battles were fought, and companies are running out of options. The war isn't lost quite yet, but the fact that stockholders nowadays are so obsessed with minute-by-minute fluctuation and demand so much from short term decision only hurts these companies. It's easy to demand short term profit and lose sight of the continuing existence of this whole industry for them... but not for us, gamers.

Esta postagem também está disponível em: Portuguese (Brazil)

Author, freelance videogame journalist, cinematography major and a little insane.