Now that I am again in the Industry, I can spill cheap thoughts pretending to be somewhat authoritative. Yesterday, Xbox One has been unveiled and in a few weeks PS4 is going to be exposed as well. Third player in the arena, Nintendo already played his hand with WII-U.Xbox One presentation enlightened me on how difficult is to sell new consoles. Long gone are the times they could double their installed base by pushing the hardware performances and techno babbling customers into buying the new console. This trend was based on the assumption that the more powerful the console, the better the games. But nowadays it is clear to many that, beyond a given threshold, the entertainment quality returned by doubling the gazillions of polygons per second, or adding physics simulations everywhere flattens and it is hardly noticeable.
Console manufacturers are confronted with a saturated market where existing customers have no compelling reason to throw their existing console to the landfill and rush to buy the new model. This is why they try to expand their domain into the mass-market of casual gamers. Unfortunately this is no piece of cake. In fact it is very clear if you look at what happened to Wii-U. Nintendo, with Wii had been the first manufacturer to target casual gamers. They dumped the complex controller (too many mysterious buttons) for the more intuitive (even if not so hardcore-player friendly) Wii-mote. But they discovered that it is far more difficult to have casual gamers brace the new console then gaming nerds. I think the reason is quite simple – the casual gamer considers the game console like a fungible appliance, no more, no less than a TV set or a dishwashing machine. Do you rush to buy a new dishwashing machine as soon as a new model is out?
That’s why, IMNSHO, Sony and Microsoft try to appeal non-gamers and to differentiate their products by center their marketing on non-gaming features – social and “share button” for Sony and TV and sports for Microsoft.
This makes the arena wider, it is no longer the game console, but the living room. This arena is open to other competitors, whose appliance are all considered fungible – smart-TVs, DVRs and disc players (that can do everything a smart-TV does), apple TV and other set-top boxes. There are so many different, diverse and overlapping technologies hardly talking each other that I found difficult to think that there could be ever a single winner.
Wii-U has been a flop, PS4 and XBox-one, despite all the hype, may likely to be on the same track. At this point, it would make more sense to turn consoles into a standard appliances you don’t need to know anything about thanks to compatibility. Much like you buy a dishwashing machine, once and then again when it breaks beyond repair. But every dishwashing machine soap is fine. Just take the one you prefer (usually the cheapest).
I don’t like really this approach, but if you look for mass market, that’s what mass market is. Hardware is not going to be profitable because manufacturers will no longer be able to appeal customer to shell out their money on the next generation.
As per I see it, the only way to stay profitable is on software – moving along the content dimension. Be it a renowned brand or an innovative art and entertainment expression, it is the content that differentiates and eventually pays the bills.
Thinking about content, maybe that the mass market be still precluded to traditional video game designers. Successful mass market titles such as Ruzzle or Angry Birds are fast and cheap entertainment designed to split in small chunks to fill your daily waiting (to be played while queuing up at the lift, or during train commuting). This is quite far away from the desired audience for traditional game designers, since they tend to consider videogame more as art than an idle pastime. Even if we achieve to make game shorter and denser, filled with emotionally sound playtime and captivating story, maybe that the really casual gamer – as of today – will always prefer swiping words into place or flinging birds at pigs. This doesn’t contradict what I stated above, i.e. that the software is going to stay profitable, because it is just a matter of rightsizing the development effort and to define success as (more or less) stable profit, not unlimited growth.