By Kris Graft
November 13, 2008
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"You also have these huge markets in Asia, Eastern Europe and everywhere else that really don't give a damn about consoles. They're all PC online."
The traditional videogame console format came under attack during a panel discussion at BMO Capital Markets' Interactive Entertainment Conference in New York on Thursday.
Alex St. John, the WildTangent chairman who's made no secret about his stance on the current console model, hammered home his opinion that the console platform is doomed.
"I think you're looking at the last generation of consoles. I don't think Sony or Microsoft is going to make another console. The problem is that great graphics, which is what used to differentiate a console, are a commodity. Everybody's got it. You can't buy a PC that doesn't have Xbox or Nintendo-quality graphics anymore."
He noted how World of Warcraft, a PC-only MMO, made more revenue than all Xbox 360 software combined in 2007.
Hilmar Pétursson, CEO of EVE Online developer CCP chimed in, "Really the only value proposition of the console was the lack of piracy on the console versus the PC." But he claimed console gaming is losing that feather in its cap, noting how online PC gaming is much more piracy-resistant than packaged gaming.
Both St. John and Pétursson's businesses are PC-centric, so their slant away from console gaming may be expected. But Lars Buttler, CEO of online PC and console developer/publisher Trion World Networks also noted pitfalls of the console gaming business.
"You also have these huge markets in Asia, Eastern Europe and everywhere else that really don't give a damn about consoles. They're all PC online," he said. "Once you run your big games completely server-side there is really not much need for any specific box [such as a console]."
He didn't downplay consumers' desire to play a game in a living room setting, but suggested that gaming technology will become so commonplace, dedicated gaming consoles as we know them will become a thing of the past.
"The console is as great of an input/output and rendering device as the PC, and if somebody prefers to play a server-based game on the console, we should absolutely let them do it. So it's actually not either/or. But the 'consoles,' the 'PCs,' those things that used to be called 'platforms' will be reduced to input/output and rendering 'devices.'
"The real platform is powerful servers and broadband."
Ken Ripley, EVP of sales for in-game ad firm IGA Worldwide came to consoles' defense, saying the current platforms are centered around consumers more interested in a general entertainment experience rather than core gaming.
"If we think about what's already in peoples' homes, which are 40-, 50-, 60-inch HD televisions centered around a stereo receiver with Dolby 5.1 digital sound, and maybe one of those theater chairs, people want to spend time in front of that kind of entertainment experience. ... As far as entertainment is concerned, there isn't too much more entertaining on that kind of home theater setup than playing a console game."
St. John fired back, saying, "The illusion or the notion of the TV as some sort of religious experience is false... Most console gamers or kids play on their own TV sets in their own bedrooms ... Screens are no longer an extraordinarily rare or scarce thing that you can only find in the living room."
Microsoft, Sony and Nintendo have made console connectivity more than just a bullet point this generation. But any PC on the market today comes with the hardware and the assumption that a consumer will connect it to a network. Consoles are still a long way off from PC-like broadband penetration, and many in the industry see a high rate of connectivity as essential for future business models.
"Only 15 percent of the next-generation consoles ever sold will ever be connected to a network ... The vast majority of consoles will never be plugged into broadband by 2012," St. John said, citing a report from IDC.
"If you believe that the next business model for gaming is online models, the MMOs and the advertising, you also believe that you're not going to see a console business going forward," argued St. John, "because it can't compete. It doesn't make sense in a community-based gaming world."
However, Buttler said that there's a reason that most console gamers don't connect: they simply don't have a reason to.
"What reason do you have today to really connect your console? There are no large scale, massively-multiplayer persistent, dynamic content applications on the console today," he said.
IGA's Ripley strongly disagreed with the notion: "Why would somebody connect?" he asked rhetorically. "You've got a Trojan Horse in the living room now. You've got a digital device with a huge amount of memory and a lot of processing power that as we speak, can download HD movies, rent them, purchase games from them, download additional songs for Guitar Hero or Rock Band straight into your game. So there's all kinds of advantages and great attributes for why you would want to be connected right now, and I'll emphasize right now."
But St. John was unmoved. "I don't think that the economics for the console business as we know it works viably anymore. I think you're probably not going to see Sony or Microsoft eager to make any announcements about launching another generation in the next few years..."
Everyone else has already covered most of what I would say in response to St John's arguments - I don't think consoles are going anywhere. Two things I would add though.
First, St John might have a point that hasn't been well-covered here: the advent of cloud computing raises possibilities for videogames that aren't well-understood yet. If a company can get a game running on servers in an online cloud that anyone can access over the internet, then it won't matter what box you use to play the game on: the console/computer essentially just functions as an internet terminal, and the quality of your graphics will be determined by your connection bandwidth, not your local hardware. You could end up (probably in 5-10 years time, mind) with a $40 console that's little more than a commodity, like today's DVD players. Single-player FPS and RTS games can work on this model just as easily as multiplayer games. This future scenario is totally plausible once bandwidth gets to an appropriate level, but is by no means inevitable.
Second, to the point that consumers in East Asia get by without console boxes, this has less to do with whether they like consoles or not than it has to do with what's practical for them. If you can only afford to play videogames 50 cents at a time in an internet cafe then naturally the sorts of games that can be accessed over the internet (i.e. Flash games) or that come pre-installed on the computers in cafes (Lineage, Starcraft) will be the ones that get the most playtime. As people in those countries get richer, more of them will be able to afford home console gaming, and generally speaking economic consumption habits in developing countries tend to converge with habits in rich countries as levels of income converge. Just as we see the Chinese swapping their bicycles for cars as they get richer, they may swap their net-focused gameplay habits for home consoles as their incomes increase.
Just to reiterate what others have said here, and I think this is really the bottom line, it's insulting, naive, and arrogant to think that we all want to play online only games. If the game is an fps, an rts, or even the point and click action rpg, all these genres which are generally sales generating on the pc usually have online components, but why would a publisher assume that's the reason people are buying them? This crap is starting to sound like the recording industry, we all want to listen to manufactured pop we conveniently get from record stores in the mall, obviously. I'm sure the record industry would like to abolish selling any records and just go straight to selling rights and subscriptions. Would drastically increase revenue, and I think in all honesty that's what the motivation for this chest-puffing is.
I don't buy a console, especially a sony or microsoft one, for the online value, or the things that I can do on my PC. I buy one with the idea that I can get with my friends and play in a single room. I don't want to connect with them online. I want to LAN together. I want to be able to take a console to a friends house, LAN the consoles, and have a party with everyone in one room. The death of the console kills the social aspect of gaming. You can make the argument for MMO's being social gaming, but it's just so impersonal.
Consoles are the reason most people game; only hardcore gamers use their PC exclusively, and if Sony moves to MMO's for the PS3, there's practically no reason for me to even use my PC for games.
The Death of consoles will equal to a step back in the industry. I am so glad that Next-Gen delivered what it took me 2000+K to get on gaming rig.
I rather sit down, enjoy bluray, and all the PS3 games from the comfort of my couch. What the online community should do is release a MMO type of game for consoles and see what that can generate for them.
Think about it.... There are a good amount of hardware unit across all platforms this early. I think we should go forward not backwards. What I could see though is a all in one ent-hub!
Last console generation LOL!!!!!
This is hilarious. They compare one console to a monster MMO. That's completely ridiculous. Considering consoles make a lot more money than PCs in terms of software sales, consoles aren't going anywhere. It's a ridiculous assertion. Where are games going then? All of them online? Yeah. Dream on.
So it IS true that everybody thinks there platform is the best. Although I’m not going to deny that consoles are catching up and fast. PS3 is about a close as you going to get to pc gaming experience and saving about £700 in the process and what I’ve seen of it Xbox360 does a pretty decent job of it too. what none of those guys deem worthy of mentioning the reason why console gaming is so popular, is that the hardware provided work so well. There is so much baggage that goes along with the PC that a casual gamer would simple not enjoy.
I'm going to play devil's advocate because I have both PS3 and PC and I see benefits of both.I think in term of logical progression consoles are just getting going, you can stuff paying a thousand pounds and getting a machine that still might be in date in a years time, or you can get a next-gen consoles, for the price of one Top End PC gfx card, which for the money offers a stunning alternative..
You won't have a bloated operating system. You don't have to mess about with drivers and you can literally plug and play. You won’t get other application taking preference at integral moments of gameplay. You won’t have those annoying moment as you ALT+TAB in mid battle. What you will get is a working hardware solution straight out of the box. You could, if so desired put a Linux build on the PS3 and use it’s as a PC.
The DLC with consoles is getting really good now with more and more software houses embracing the direct to drive technology. Playstation network a excellent easy to use service. And most importantly with Sony, you don’t have to pay that all important subscription fee that comes with XboxLive.
PC’s are great if your an enthusiast and want to spend more time tweaking this thing or that, to get your games running better, they have a very prescribed use for the most part, even with the sector become more popular with gamers. PC are difficult to use, troublesome in terms of hardware reliability and effectiveness. The market is saturated with third part equipment which at best is bewildering. They do offer some advantage though. PC games by and large supersede consoles on image quality in game and it term of general use thee is a lot more functionality with a windows based OS.
I run the PS3 through a second hand Hitachi cpx990 projector at 1080i with games that support it, although the vast majority of PS3 at the moment are 720p. PS3 falls down on image quality and that's always were the PC is at an advantage. You can really pile on the AA and AF on pc, with consoles you don’t really get that, hence all the jangley lines, but I can handle that when there is no lag and everything run’s smooth at 60fps, shame similar can’t be said of my Desktop PC running Vista running on a Over clocked Quad with 2x Over clocked 8800GT (SLI) gfx and as much DRR2 ram as I could get on the board (8GB as I have 680i Striker). I still have trouble getting good frame rates out of games like crysis and far cry 2 if running at resolutions like 1680x1050 (or similar). I realise that even though I have spent the best part of this year building the machine and slowly realising that it shortly be happening again.
About march time this year, encourage by GTA4 bundle and was have been seriously impressed. It’s really was the right time to buy the PS3 there has been loads of top releases over the last couple of months. I’m have currently sated my appetite for games this, but still look forward to what Q12009 will bring. One slight niggle with the PS3 was the initial Hard drive size. considering I have a Terrabyte in my PC on mirrored raid it was disappointment that there were no advantage to using a higher rpm hard drive. Plus the initial capacity was used up in a few months with games. I was also disappointed initially with the lack of PS2 backward compatibility, but I soon got over this.
In terms of post processing, the PS3 really shines, if you compare Devil May Cry on all three formats for me PS3 version is the best. PC is almost too crisp and clear and the models look like there superimposed on the background, very decent gfx and good amount of AA/AF but no post processing you get with the PS3 version.. But with the PS3 version, they’ve really gone to town, the textures are smooth foreground as background have nice depth of field so the models look at home within the environment. These are just a few quick examples. there are others, don’t even get me started on Grid.
I believe if anything, as much as PC gamers like to comment to contrary. Consoles are becoming more like PC and vice versa and in the end they'll meet on some new common ground, maybe where everything has the almost Identical hardware and you just buy whatever system you like based on the brand you want to be associated with (MS, Sony or Nintendo, perhaps Sega)
I just think as gamers we should ALL be on a level playing field, who give's a shit who's got the most powerful system just get some decent games on the go. I would like to see the day when we can game cross format. and everyone uses the same control method, to do away with this Keyboard and mouse is better than Joypad argument. But none of that will ever happen never going to happen without somebody having a serious look at the hardware issues. And at least set a benchmark we can all follow for the next 5years or so. I don't, nor need an upgrade ever year, but that damn sure what Nvidia or ATI would have you believe, same with CPU manufacturers.
Last week werent' we discussing whether PC gaming was dead in light of how good consoles were becoming, I guess that this is just the PC backlash. Because while either formats have merits in there own right.. None of them should be single out, as “the best” or “the future of gaming” because we gamers are getting wise to the industries hyperbolic claims about it’s hardware.
How can you compare software sold on consoles to WoW? WoW is the only MMO with that kind of software revenue. That's a totally unfair comparison.
I don't have a whole lot to say as most have already touched on everything I'd like to say.
Omega,
You're right, we don't really know what will happen, but I'm pretty sure price really isn't going to be much of a factor as new consoles aren't really that much more expensive than they've been in the past. (The PS1 launched at $299 USD). You can argue that with the arcade unit ($299 at launch) matched the PS1's launch price. Only the PS3 has really gone beyond what we've seen with past console launch prices if you exclude duds like the 3DO. With the PS2 still doing so well, maybe that's a sign that people aren't ok with the current pricing (mainly with the PS3) and only now are PS2's sales slowing a bit as prices of next gen systems start falling. $299 USD for a 60gig 360 aint bad when compared to what its capable of when compared to a PS1 right? I wouldn't be surprised if we hear about the next xbox as early as E3 2010.
I've never played an MMO on PC or console (the time commitment and monthly fees put me off), but I enjoy solitary gaming, local multiplayer, and non-MMO multiplayer online gaming through consoles and PC. I don't want to see an end to either platform - I like gaming on the PC because of the mouse/keyboard controls and free online multiplayer modes where you don't have to subscribe; I like console gaming because it's often more enjoyable sitting infront of a TV (be it a HD set in the living room, or an SD set in the bedroom) to play games, rather than sitting at my desk, and because of the streamlined experience - just turn it on and you're quickly into the game.
The article raises good points about the failings in console business models should online become the be all and end all, but I don't think that it will, not for console gamers. The revenues from console gaming may be lower than online monsters like WOW, but that doesn't mean it's still not profitable and worthwhile for consoles to not focus entirely on connectivity.
I don't understand the comments about server-side gaming being the future, because surely there will always be people who want solitary, disconnected gaming experiences? Server-side gaming is just one of many applications of gaming tech.
The comment that there is no reason to connect your console because there are no "large scale, massively-multiplayer persistent, dynamic content applications" also doesn't ring true for me (for a start, I thought there were MMOs on console, like Final Fantasy XI). As I said, I've never played an MMO on console or PC, but I have many reasons to connect my 360 or my Wii: I like playing Halo and Mario Kart Wii online against more human opponents than you could ever get around one TV; I like the ability to download demos and films, and receive news and weather reports. I have to unravel a 30m Ethernet cable to connect my consoles, which might seem like a chore, but I always have a reason to do so.
I think that there are more than enough people who aren't that bothered about online gaming, and who like playing games on their TVs, to warrant the continuation of consoles. Sure, consoles may be scarce in China and Korea, or Eastern Europe, but what about places like Western Europe, Japan, North America, and Australia, where consoles are popular? I'm from one of these places, and I do want a console, not just a PC.
Alex St. John seems to get stupider with every new comment he makes "You can't buy a PC that doesn't have Xbox or Nintendo-quality graphics anymore." Umm.. been to pc world or any high street computer vendor lately? To play today's games you need a graphics card with way more muscle than the cheap intel solution found in most budget PCs, and when it comes to lap tops the situation is even worse.
"The illusion or the notion of the TV as some sort of religious experience is false... " well, though Ken Ripley sums it up pretty well in his response what he fails to mention is that the "kids play on their own TV sets in their own bedrooms" notion may have been true 20 years ago but now those kids have grown up and still play games, only in their own lounge with their own 40" Hi-Def TV.
As for St. John's notion that we all want to be playing MMO's, maybe he should realise that most of us have, and either play both, or got bored of the grind and went back to our consoles. No one is saying WOW isn't a great success but to assume that this type of game is all PC owners want to play is either profoundly naive or outright insulting.
I wonder why the healthy games sales figures of this generation weren't pointed out to St. John but i guess he would probably just stick his fingers in his ears and shout "I'm not listening!".
@OmegaVader - I like your points. There are already programs that support resolutions higher than 1080p, I believe its around 1900 or so. Nonetheless, consoles are very dominant. Graphical limitations of these systems are becoming very clear but other technical and software-enable opportunities are yet to be discovered.
I foresee a Wii HD by 2010, early 2011, A new MS console in 2012, released in 2013 and a Sony will hang on to the PS3 as long as possible in hopes of eventually breaking even. It's clear that the Wii has created a new market for console gaming and I think that point is largely overlooked by the these online execs. Simply put, consoles will be around for some time because they are a diffraction point of development costs.
Well this is certainly a break from the usual rigmarole of the PC market dying...now it's the console market?
I think, given that online gaming is a niche market rather than a full market, it would be silly to assume that the industry moves in that direction...for one, it assumes there' more market to carve out around the behemoth that is WoW, and for another, it assumes everyone wants that kind of play experience...which I doubt, giventhat most play experiences today *don't* resemble MMOs!
If there is any reason to think this the last generation of consoles, I would instead consider it is the *ultimate* generation of consoles. Nintendo made a good call on sticking with a standard def console, insofar as most consumers don't yet have a HDTV. The consequence is a cost-effective console and cost-effective game development that Sony and Microsoft can never match. Furthermore, the difference between the Wii and these 'next gen' consoles on a standard def TV is minimal, maybe even impossible to discern with the right game. We reached the pinnacle of standard def tvs. That said, we'll reach teh same barrier with HDTV...if we haven't already. The 360 and PS3 can utilize the resolution depth, obviously, and for most people, they haven't even experienced it yet. Once market penetration of HDTV outpaces standard def, the 360 and PS3 will still seem new (and by this time I expect Nintendo to release a "HD" variant of the Wii). Indeed, it's getting difficult to imagine how they can improve the gaming experience with graphical technology alone now...perhaps yet again why Nintnedo moved in a different direction. We may of reached the limit with graphics, and now it's time to focus on what we can do with the technology we have.
This is, of course, assuming we don't soon introduce a bar higher than HDTV. But really, how much better can it get to the human eye? Furthermore, the 360 and PS3 are becoming more like a platform, as stated in the article, what with game purchases, downloadable content and movie rentals taking place through the console. This further solidifies our commitment to the given console, and our reluctance to ever move on. In addition, since it is so expensive to create an install base with these 'next gen' consoles, I doubt either sony or microsoft are financially winning to start all over again any time soon.
However, whoever 'loses' this console race is probably going to be of a different opinion. Much like a presidential term ending, it's time for the other party to try and 'shake things up' so as to gain a larger hold of the market. Seeing how Sony is becoming more and more of the 'loser' of this generation (but this ignores the huge success the PS2 is *still* having!) , they may be inclined to exact this change up for their own gain.
But in the end, this is all just speculation. Who the hell knows. Maybe things will proceed as they always do and we'll have a new slew of consoles in 3 years...but I hope not. it's getting expensive for the consumer as well at this point.