The New Console Cycle – It’s VERY Important!

I don’t really care what we call this new cycle; it’s go big or go the heck away…


 

The spectre of a new console cycle – be it Gen 8.5 or Gen-9 – looms large over E3 2016.

We all want to get into a new console cycle, if not a new generation. A new cycle gives the industry a chance to hose down the walls and at least pretend that the last few years haven’t been a cavalcade of unremitting failure – failure that E3 itself has nothing to do with, and though I’ve been hard on the E3 show many years running, this year to kick the E3 showcase feels like kicking a cancer-ridden puppy. You’d have to be the most callous, heartless, cruel monster imaginable to even think of blaming E3 this year for anything. Everyone messed up – E3 has to pay the price this year.

Thing is, whilst the new console cycle – whether they call it Gen 8.5 or 9 makes no difference – is nice, to the industry… these new consoles have to do something more than just be nice. They need to succeed – and succeed to Gen-7 levels. Anything less could cripple any one of the major manufacturers.

I know lots of people will roll their eyes but the numbers don’t lie; Sony wants you to pretend that its 40 million PS4 sales makes it the best-selling console in history – but it isn’t. You see, it’s taken two years and six months for that number to be achieved, and it’s a huge figure no doubt. But the Nintendo Wii was released in November of 2006, and by April of 2009, it had reached 50.39 million sales – so no, the PS4 is not the biggest selling home console in history. It’s not even the best selling console of the last decade. And more painful for Sony is in the same time-frame, the PlayStation 2 a generation prior to the Nintendo Wii had also reached 50 million units. So it’s not even Sony’s best-selling console of all time!

Why would Sony lie about this? I don’t know – but anyone who says to me with a straight face that the PS4 is the best-selling console ever will get the dirtiest look I can manage, alongside facts and figures to prove them wrong. And if that’s oppressive to you Sony fanboys, then call me Senor Stalin because I don’t care about your fantastical delusions. The figures speak for themselves.

But at least Sony can say it sold a load of units; the Nintendo Wii U, despite having some of the finest and best games this generation (again) – and I do own a Wii U and I do believe the console has ill-deserved its fate – has sold like bottled farts during a smog storm, with the console still barely on 14 million units in over three years. Microsoft isn’t faring much better – breaching maybe 20 million units for the XBox One, but it too won’t look on those numbers with any favour as they’ll still be the worst sales figures since the original XBox (and for Nintendo, significantly worse than the Gamecube). The competition just hasn’t even got a look in.

And this is unusual when you consider how healthy the market was a scant generation ago. Sure, the Nintendo Wii was flying off the shelves because everyone and their Granny wanted one, but the PlayStation 3 and XBox 360 weren’t exactly sales slouches either. The Wii sold in excess of 100 million units, and both the PS4 and XBox 360 sold just shy of 80 million units each. That meant there was a huge, thriving market who wanted games and game consoles. At current rates, even if we didn’t have new consoles coming – no major console manufacturer would hit the figures from the last generation even if they did have another three years.

The conclusion that we draw from these numbers is inescapable – this generation has been a critical failure for the industry. And no, that’s not hyperbolic; that’s just stating numerical fact. Sony believed the PS4 could reach 100 million unit sales; but it knows it can’t achieve that unless they pretend the PS Neo is “just a PS4” and bundle those sales in with it. And there’s no guarantee that even doing that will allow them to reach that 100 million unit figure.

“But Kami…” I hear you snort. “The video game industry is predicted to grow to 100 billion dollars by 2020, how can consoles be failing when the market is growing?”

Well, much of this is down to the exponential growth of the Smartphone Market and the PC Market – the latter the more interesting case in point, as the ESA suggests that more over-50’s are playing PC Games than ever before (not a surprise to me, of course, since my grandfather was running an Everquest 2 guild well into his 80’s – but I may be unique in that). In fact, despite years of quips and jokes about how “PC Gaming Is Dead”, the reality is that PC Gaming has never been more alive, more healthy or more lucrative. Steam, GOG and even Lucifer’s Sweaty Jockstrap (also known as Origin) have in recent years revolutionised PC Gaming; automated updates, good sales deals, an eye on supporting older games on new system hardware and such forth. Last years ESA report showed that the biggest share of the gaming market today… is the PC Market. We all have computers – and we are, more or less, all playing games on them.

But let’s not dismiss the rise of the Mobile Market either; in a decade it has become an unavoidable presence. Where once most thought mobile gaming would remain a relative novelty, now most will have to concede that as everyone has a smartphone, it’s impossible to escape the mobile market. Companies have carved out lucrative markets; true, the rapid expansion of the market has meant we’ve seen companies like King and Zynga rise (and fall) – but it’s amazing the market has grown so rapidly to accommodate such huge companies too.

China and Japan are very much into their Mobile Gaming scenes. And the Western Market, as it turns out, is becoming more PC-Focused. Consoles are caught in the middle – and that’s not a good place to find yourself after thirty-seven years.

Every perk the console had over the PC – the speed, the controllers, the reliable tech, the not-needing-to-patch-everything; all of that has gone. What is left are nice machines, but they’re taking on a market that has evolved, adapted and now thoroughly kicking its arse. As we already know from Gen-8; the PC Market has felt that it has been held back and hobbled by third parties desperately clinging to console architecture. Sometimes this is just a visual fidelity issue – see The Witcher 3. And sometimes you get Mortal Kombat X, or Batman: Arkham Knight, or basically anything by Warner Bros. Interactive. But the PC Market, in the last year or so, has wriggled its way free and is moving way beyond the consoles. And the resentment coming from PC Gamers to the PLayStation 4 and XBox One, the consoles whom third parties are trying to keep sweet, is not going to work in their favour for newer consoles, since the more that transition to PC Gaming, the smaller the need and sales for third-party games on consoles.

Analysts can muse for weeks over every microscopic detail and press reveal and miss the point entirely; but we live in the real world, and we all know that the last few years for games consoles have been hard – no amount of denying the figures can shake off the sensation that we’ve all had to suffer through this generation. As PC Gaming and Smartphone Gaming grow, so the console market gets smaller. As I’ve said before, there’s only a finite amount of consumers available at any given moment, and the more they are split – the more the market splits, and everyone gets a slice of the pie. A decade ago, consoles had very little competition; now, they absolutely do, which means it has to share that previously enormous helping of pie with a growing PC market and a mobile market that it barely even knew was coming.

So there’s no denying it; it doesn’t matter what you call this new console cycle, only that we know that it is critically important in the long run. If the console industry gets things right and gets consumer interest, it might well be able to match sales figures from Gen-7. Ahh, but this comes with a caveat; if the console industry gets this coming cycle wrong – a possibility that is very likely with a lot of onus on VR Headsets and pseudo-4K streaming to detract from far more pressing concerns that they should be facing up to – then it may also just start to disappear entirely. And the reasons why Gen-8 was such a cluster of unremitting nutty bran muffins will be a topic for another day.

To survive, the console industry is going to have to embrace the changing tides of technology in a way it hasn’t for a while. Card-based media is where home consoles should be heading – the benefits far outweigh the potential costs, and the console industry needs that lag-free, load-free benefit to differentiate from PC (after all, why bother waiting for consoles to load when the same happens on a PC?). Not only that, home consoles will have to invest heavily in themselves; exclusive games, strong deals, consumer perks – anything that can convince people who have become accustomed to the PC Market, Steam and the Almighty Gaben’s Steam Sales, to return to consoles once more. Because those gamers haven’t gone anywhere – they’ve just moved to a different market, and the home console needs them back. Hence why Tokyo Game Show is so important for the industry in 2016; Japan long ago abandoned home consoles, and they used to love them. It has taken less than a decade for Japan to go from being the most eager console market in the world, to one of its weakest markets. And yes, the same can happen in the West; anyone who thinks it can’t clearly isn’t paying attention. It happened. It could realistically happen here if the market isn’t careful – and let’s be brutal for a second, the last three years aren’t exactly examples of care and nurturing, are they?

Microsoft, Nintendo and Sony now face their biggest battle. It’s no longer merely about competing against each other; though they will still have to. The coming years will see them having to fight on multiple fronts, against multiple devices, all of which want their share of a market that is starting to feel rather crowded. Failure to carve out a strong niche now will be fatal; the market is cut-throat, and there will be no mercy for the weak.

The motto is clear then for this new console cycle; it’s time to go big, or go the hell away. Consoles now have to prove themselves capable of surviving a radical shift in consumer tastes and against heavy competition. It is time for the industry to evolve.

Or die trying.

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