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As Microsoft and Sony target PC and mobile to grow their audiences, what does that mean for the future of the console? - GIBiz Opinion By Chris Dring

Thick Thighs Save Lives

NeoGAF's Physical Games Advocate Extraordinaire

Console gaming is dying.

If you've been in this business for more than 15 years, you've probably heard a sentence like that before. In the early 2000s, it was PC gaming that was dying. Consoles were booming, piracy was putting off publishers, and the same old games were topping the charts. Forget PCs, it was all about PlayStation.

Then Steam came along, and the indie scene, and, well, let's just say nobody is predicting the end of PCs anymore.

Then, about eight years ago, handheld gaming was dying. PS Vita had flopped, the Nintendo 3DS had sold half of what its predecessor managed, and smartphone games were the dominant form of gaming globally. Forget handhelds, it was all about iPhone.
Then Switch came along and created a popular product that sat somewhere between consoles and mobile and, well, let's just say nobody is predicting the end of handhelds anymore.

Things are a little different this time. There's compelling data to show that the console market is slowing down, and both Xbox and PlayStation spent much of last week talking about their multiplatform strategies.

In fact, it's been a bad week for fans of that box under the TV.
On Wednesday last week, Sony revealed that it will miss its target of shipping 25 million PS5 consoles in the financial year by four million (at least). That means that the PS5, which is now in full supply, is trending behind the PS4.

In the financial Q&As that followed, COO and CFO Hiroki Totoki talked about how releasing more PS5 games on PC was part of an 'aggressive' plan to grow margins.

Then the very next day, Xbox's much anticipated business update confirmed that some of its games would be coming to PS5. The company still went to great lengths to remind everyone that it's not about to walk away from hardware, and its key titles remain 'exclusive' to Xbox and PC. But its strategy has long been about going beyond the box, and last week was a further move in doing just that.
The numbers speak for themselves. If we look at install base figures, we can see a console business that really hasn't grown for 20 years. Just under 180 million PS2 and Xbox consoles were sold during that generation. That dropped slightly to just over 170 million during the PS3 and 360 era, and then we're back up to around 180 million for PS4 and Xbox One (the mid-cycle upgrades helped).

There has been significant growth in revenue, driven by subscriptions, DLC, microtransactions and the general switch to digital, but the PlayStation/Xbox market hasn't expanded its userbase. And with rapidly rising development costs putting pressure on profitability, these companies need to either make cheaper games, or find more customers (or, ideally, both).
The eagle-eyed amongst you will have noticed that I didn't mention Nintendo in those figures. Nintendo complicates the narrative. For starters, its consoles are now out of sync with its competitors (should Switch's install base be added to the PS4 generation or PS5?). But also, should Switch be classed as a console or a handheld or both? And if it's both, should we therefore be including handheld sales from previous generations? If we do that, frankly, we've seen a startling decline in users since the peak of the Wii, PS3, 360, DS and PSP era.

Nintendo is often treated as a different market entirely. As a console built around first-party titles, and primarily targeting families, it is playing in a different space to PlayStation and Xbox. Even the regulators analysing the impact of Microsoft buying Activision Blizzard considered Nintendo different to Xbox and PlayStation.

But isn't that difference the solution to all this? Nobody should expect the market to continue growing steadily year-after-year without the introduction of something different. It's through innovation that markets grow.
The idea that Nintendo isn't a competitor to PlayStation or Xbox is a very narrow way of looking at the business. In this engagement-based economy, which is all around keeping the attention of consumers, everything is a rival. Movies, TV, books… even sleep. So, of course a box that plays games is a competitor to other boxes that play games.

One of the reasons the Xbox/PlayStation market hasn't grown is that there are too many gamers 'ageing out' of consoles, and there's not enough young people coming in at the other end of the funnel. I would argue part of the success of Nintendo Switch is that it caters for both much younger players and much older ones, acting as a convenient product for time-poor adults and as an entry-point for younger children. The universal appeal of its brands also makes it a popular way for parents to play games with their children.
Nintendo has attracted these players through its games, yes, but also with hardware 'novelty'. The ability to switch from portable to handheld, the detachable controllers, the motion controls, touchscreen, tabletop mode… some of these elements have been more successful than others, but it all extends Nintendo's appeal to people who might not consider an Xbox or a PlayStation. Nintendo then pairs these innovations with software. Beyond the obvious titles, there have been projects like Arms, Nintendo Labo, Ring Fit Adventure… they weren't all hits, but they're examples of games you couldn't easily replicate on a PC or mobile phone.
Historically, it was common that each console would bring something new outside of better visuals. In the formative year of games, we saw cartridges become CDs, then DVDs, then Blu-Rays. We've had the introduction of Xbox Live. We've had the D-Pad, the analogue stick, touch screens, motion controls, camera controls… we've even had a handle. Yet these innovations do come with risk for those that over-commit. The whole 3DS/Wii U era, where Nintendo banked on a 3D screen and a tablet controller to attract users, is a lesson in the dangers of this strategy. 3DS found an audience eventually, but by largely abandoning its initial 3D selling point.

PlayStation and Xbox have pushed new concepts down the years, too. For Sony, we've had EyeToy, SingStar, PlayStation Move and, most recently, VR. The company never went as far as Nintendo as to build a platform around them, but they had the same goal of trying to widen the PlayStation audience. And they often succeeded, at least for a period.
A lot of Microsoft's innovations have come through services, such as Xbox Live and Game Pass. But there's been hardware, too. Kinect did a strong job of expanding the audience of Xbox 360, and this was followed by the decision to bundle an improved Kinect with the Xbox One. It was a move that ultimately failed as there was no compelling use case for it. There was no Wii Sports-style game to drive adoption. As a result, Kinect was soon de-bundled so that Microsoft could lower the Xbox One's price.

There were efforts beyond Kinect, things like HoloLens and SmartGlass, which never manifested themselves in full. Yet they still highlighted Microsoft's eagerness to investigate things that only a living room device could deliver.

These initiatives have a habit of going wrong more than they work out, yet it's these innovations that separate console from PC and mobile. With smartphones becoming more technically capable and PCs becoming increasingly accessible, consoles need to react and show what's unique about them, just as the PC space had to back in the early 2000s, and handheld gaming had to in 2017.
This may be a harsh analysis, but I look at the PS5 and Xbox Series generation, and I see two platforms that haven't offered much over what came before. The PS5 DualSense controller is a nice piece of kit, and the dual-console approach of Xbox Series S and X is unique. Yet outside of that, we're mostly talking about nicer visuals and faster loading times. Even the most popular games are largely the same this generation as they were on the previous machines.

Both Microsoft and Sony are looking beyond the borders of their boxes to find new users and to expand into different markets, which will allow them to keep investing in new, expensive God of War and Halo-sized projects. It's a perfectly reasonable strategy that should deliver results in the short-term. And for most game types, the ability to play them across different devices has clear benefits to players.
Yet simultaneously, the multiplatform push points to a console market running short on ideas. Where the main differences between a gaming PC and a PlayStation are the screen you're playing on and the chair you're sitting in (and even then, not necessarily).

We've been here before, of course. And as this homogenised view of the future of games comes to fruition, I like to think there are still creators who are eager to innovate and make the good old games console that bit more interesting once again.
 

DeaDPo0L84

Member
Console gaming isn't going anywhere, people just need to accept that the primary reason for owning such devices which is exclusive games, is mostly going away. If that doesn't bother you, nor should it, then nothing really changes for the console user.
 

NEbeast

Member
The next gen consoles will be the final high end consoles from both. Growth is flatlined.
Season 4 No GIF by The Office
 

HeWhoWalks

Gold Member
Console gaming isn't going anywhere, people just need to accept that the primary reason for owning such devices which is exclusive games, is mostly going away. If that doesn't bother you, nor should it, then nothing really changes for the console user.
As long as Nintendo and Sony make consoles, there will be console-only games. That's the bread-and-butter of their business, and while some will be on other devices (such as a PC or mobile — particularly in the case of PlayStation), the exclusives will be there.
 
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Zuzu

Member
I don’t think exclusives will completely disappear but there may be fewer of them. This just means that the console makers will focus on different areas to pull in prospective buyers to their platforms. Perhaps they’ll try to outdo one another with regards to hardware features and services. I wouldn’t worry about consoles disappearing if exclusives decrease.
 

Holammer

Member
2Sd5Zgn.jpg


You will buy our little streaming box, make you pay for cloud saves, multiplayer access and you will like it.
This is a warning from the far-off year of 2032, beware!
 
I’m never gonna say console gonna die. Every time we say something dying. It seems to come back stronger. Now will grow bigger what it is, maybe not. That what the problem is. But that also what’s wrong with company’s now, it’s always bout growth. Even if u could make money, if there no growth they don’t like it. Well the shareholders don’t and that’s what cause some problems for companies and mess stuff up cause they trying different stuff and it fail.
 
A videogame journo should know Sony's most profitable IP is on mobile phones. It takes a 30-second Google search.

The main logic of the essay is wrapped around the fallacy of constant growth. There is a limit to potential clients for a videogame company. Sales are looking good but they can't be much better than that, it's as impossible as the 100-million-user target for Gamepass. Not gonna happen, regardless of how great their games are.

Sony's problems are not about market share but cost-efficiency and quality control. Some of their studios haven't produced anything for 4-5 years. That is not sustainable.
 

Clear

CliffyB's Cock Holster
Calling bullshit on this, its just stupid on its face.

Are console shipments down generally? No, they are not. The market not growing in 20 years is hardly surprising considering back then mobile gaming didn't exist, streaming services didn't exist, the PC market was still largely ignored by most Japanese publishers. All factors that blatantly would you'd think contrive to SHRINK the console business!

Are Playstation sales down in any regards other than the historically unprecedented 25m units/year guidance? No they are not. Is their future bleak in terms of content (which is still impacted by Covid disruption), or looking shaky because of improved competitiveness on the part of Nintendo and Xbox? Hmmm, not really!

Seriously, has it escaped this "analysts" attention how dysfunctional the world is politically and economically right now? Is it prime-time for investing in what amounts to expensive toys? No its far from ideal, especially when you factor in how the rest of the entertainment landscape is looking even worse right now, again its a testament to the strength of the brand and gaming as a whole that Playstation is looking as good as it is!

Most of all, just look at what's NOT happening with Game Pass. This was supposed to an utterly certain pathway towards MS' dominance. Yet its them who are pivoting hard and fighting PR fires. They are the ones struggling with balancing profit vs capex on their massive production pipeline, cutting swathes of jobs in the process.

Nintendo and Sony are looking pretty good in my opinion.
 

James Sawyer Ford

Gold Member
Calling bullshit on this, its just stupid on its face.

Are console shipments down generally? No, they are not. The market not growing in 20 years is hardly surprising considering back then mobile gaming didn't exist, streaming services didn't exist, the PC market was still largely ignored by most Japanese publishers. All factors that blatantly would you'd think contrive to SHRINK the console business!

Are Playstation sales down in any regards other than the historically unprecedented 25m units/year guidance? No they are not. Is their future bleak in terms of content (which is still impacted by Covid disruption), or looking shaky because of improved competitiveness on the part of Nintendo and Xbox? Hmmm, not really!

Seriously, has it escaped this "analysts" attention how dysfunctional the world is politically and economically right now? Is it prime-time for investing in what amounts to expensive toys? No its far from ideal, especially when you factor in how the rest of the entertainment landscape is looking even worse right now, again its a testament to the strength of the brand and gaming as a whole that Playstation is looking as good as it is!

Most of all, just look at what's NOT happening with Game Pass. This was supposed to an utterly certain pathway towards MS' dominance. Yet its them who are pivoting hard and fighting PR fires. They are the ones struggling with balancing profit vs capex on their massive production pipeline, cutting swathes of jobs in the process.

Nintendo and Sony are looking pretty good in my opinion.

Agreed

The only thing that’s really hurting consoles right now are that they cannot lower prices like previous gens.

You can pretty much blame AI for this, as big tech companies are buying up massive amounts of chips which is competing for gaming GPU resources.

But PS5 is trending similarly to PS4 even without cost reductions. They have GTA6 next year

This concern trolling from Dring is typical, I’m pretty sure he’s another MS astroturfing goon. “If MS is falling everyone is failing” nonsense
 
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Gonna say not much for console and pc players. At least I hope not.

If so, that shit can DIAF. At least I have a huge backlog.
 
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tmlDan

Member
I watched the Pod with Moores Law and Colin and they're right, this "console gaming is dead" flag has been raised multiple times over the last decade or two and somehow consoles adapt in a way where they're always enticing.

What we need is some sort of innovation in the console space that will make it more appealing than PC apart from just price, I honestly think Nintendo is heading in the right direction and Steamdeck gave them (Sony and MS) some ideas. I also think AI will be involved in some capacity and "console" gaming will grow once that happens
 
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Iced Arcade

Member
Consoles will remain until gaming PC are affordable to the masses. Which isn't going to be any time soon.

Even then consoles will evolve into something else
 
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IFireflyl

Gold Member
...pc is an elitist market that has no interest in owning a walled garden box despite the fact they will only use valves walled garden.

This is an extremely ignorant take. Valve doesn't pay for or promote exclusivity unless it's a Valve-created game. Also, no other storefront comes close to being as fleshed out as Steam is. The beauty of PC is that people can buy from whichever storefront has the game they want without having to get new/dedicated hardware.

People like me will still choose to buy from a singular storefront (Steam) because they don't like the practices of other storefronts (e.g. Epic and it's retarded-ass exclusivity deals), and/or because they like having their content in a single location. That isn't wrong or bad in any way. It's an option that I, personally, have elected to use, but if I ever change my mind I can easily purchase content from other storefronts.

TL;DR - Your take was stupid.
 
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I’ve been hearing this bullshit “console gaming is dying” narrative since 2010. It hasn’t happened in more than a decade and isn’t happening now. Only thing I see is Xbox struggling but Sony and Nintendo are doing better than ever. Funny enough, MS are the most aggressive when it comes to pushing the play anywhere initiative and the weakest when it comes to releasing quality games. No surprise why they are the only ones struggling.
 
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Zathalus

Member
I don't think console gaming is dying, but the userbase has failed to expand meaningfully in the past 20 years. If you expand the definition of console to include handheld then the userbase has dramatically shrink during this time period.
 

SlimySnake

Flashless at the Golden Globes
Their revenues have literally tripled in the last 8 years. its not dying lmao.

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Their profit margins are lower because they shipped two new hardware and bought Bungie. They will go back next year and especially the year after that as their first party studios start releasing games again.

They literally outsold MS 3:1 last year. 22 million vs 7.5 million. it will only increase as MS ports over more and more games to the PS5.

This is what they have slated from 2024 onwards:

1) Helldivers
2) Astrobot 2
3) Concord
4) marathon
5) death stranding 2
6) ghost of tsushima 2
7) Wolverine
8) Venom
7) ND's new IP
8) SSM's new IP
9) Horizon 3
10) Bend's New IP
11) Bluepoint's New IP
12) GT8
13) Media Molecule's new IP
14) HouseMarquee's new IP
15) Rise of Ronin which they are publishing though not sure if they own the rights to the IP like they do for Helldivers

Plus all the other GaaS trash they invested in like that Jade Raymond game and the games from those exbungie and ex treyarch studios. Thats 4-5 games a year. Their profits will bounce back up especially with MS shooting themselves in the foot.
 

Clear

CliffyB's Cock Holster
This concern trolling from Dring is typical, I’m pretty sure he’s another MS astroturfing goon. “If MS is falling everyone is failing” nonsense

Yep, have to admit that if I wanted to create a console gaming is doomed narrative Xbox would be my primary example case. I mean, MS' gaming operation is a smorgasbord of candidate situations to prove the sky is falling.

And yet, we never seem to see articles like that... funny. :D
 

SlimySnake

Flashless at the Golden Globes
I don't think console gaming is dying, but the userbase has failed to expand meaningfully in the past 20 years. If you expand the definition of console to include handheld then the userbase has dramatically shrink during this time period.
the userbase has expanded significantly. All the kids are playing on their switch and playstations nowadays. PS has over 100 million monthly active users.

What they have lost are the casuals from the Wii era who bought the Wii and realized gaming wasnt for senior citizens, girls and housewives. That wii craze help add around 70 million users who will never play video games. If you remove those 70 million and re-run the numbers, you will see that the console userbase has increased.

Everyone from nintendo, sony and MS are posting record revenues. You dont get that just from subs and microtransactions from Fortnite which btw is mostly being played by the younger generation proving that kids do love playing video games and are going to continue help this industry grow.
 
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