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A Third Outcome for the Future of Gaming
by Josh Klint on 08/28/13 11:48:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

Opinions on the future of the game industry pretty much fall into two possible outcomes: Either mobile devices will become the primary gaming platform, or the next-generation consoles will renew interest in console gaming, and mobile will either remain its own unique creature or fade away.

Ben Cousins makes a good case for the first option.  Console hardware is sold at a loss and is reliant on sales to people that aren't really that into games.  There is certainly an underlying "core" segment, but they alone are not enough to support the market.  The casuals have moved on to a new gimmick, mobile, and won't be buying new Playstations and XBoxes.  Or something like that.

The other possibility is that a new hardware refresh cycle will attract renewed interest in console games, and things will continue as before.  This is a less revolutionary prediction, so I won't link to anyone espousing this theory.

If mobile does indeed "kill" consoles by taking away the casual segment that funded the core segment, the idea is that game studios will move over to consoles.  Mobile will become the new leader, and we'll all be playing "console-quality games you can hold in your hand!" (TM)

There's a problem, though.  High-end 3D mobile games have already existed for some time.  id Software led the way with a version of Rage for iOS.  Epic has been messing around with mobile for a while now.  Both of these studios that led the charge have quietly terminated mobile development.  If 3D mobile games are so hot, why are the market leaders shutting down?

 

Maybe the business model for mobile is different.  Maybe In-app purchases are the way to go.  Sure, you will get less revenue per player, but the market size is enormous, so you can make it up on volume.  The problem with that approach is that as your market gets bigger, it gets dumber, and the increased benefit of a nice looking 3D game matters less to them.  They're perfectly happy playing simple match-3 games.  Maybe their tastes will improve as mobile hardware gets more powerful.  But attempts so far at console-quality mobile games do not appear to be going well.  If this was what the market wanted, Rage for iOS would have mopped the floor with "Candy Crush".  Instead, id shut down their mobile division and sold their company to Bethesda.

I think we should consider a third possible outcome: Mobile might steal away casual interest in consoles, but that doesn't necessarily mean it will provide a new ecosystem capable of sustaining the industry.  How many free games can the mobile market support?  How many VC-funded firms will aggressively market free products for years in hopes of a big payoff, before finally shutting down?  Exactly how low can prices drop once they've already hit zero?

If this happens, 3D gaming would likely return to the PC and mobile would experience a repeat of the Atari game crash.  The entire industry would compress.

My purpose in writing this is not to inflame controversy or make a prediction.  I just wanted to consider a third possible outcome I haven't heard anyone talking about.  Maybe the future of the industry isn't an either/or choice between consoles and mobile.  It's anyone's guess, but we'll find out soon enough.  With Leadwerks, I am keeping a foot in both PC and mobile, for the time being.


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Comments


Kujel s
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I feel the third outcome you're talking about is microconsoles, they offer the best of both console and mobile and can survive of the niche that gaming as always been for. The casual players will never really get into games like us nerds but we will always be too few to support big expensive platforms, why do you think MS pushed the multi-media functions of the X1 so hard at the reveal?

Big budget platforms will disappear, mobile will live on, and micro-consoles will be come the home of the core gamers.

Mike Engle
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Do you really think core gamers are interested in settling for a budget experience? To me, they're interested in a high-quality premium experience, and are willing to pay more for that experience.

Marc Schaerer
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If the current microconsoles are used as a measure of what we could expect there, then thats definitely not gonna happen.

if people are already unhappy with mobile as their primary platform, why should they settle with a microconsole thats less mobile, has the same broken monetization, quality and flooding issues and on top of it has worse hardware than their mobile while also being less consistent than real consoles (which is the main reason consoles get the high quality games - lack of fragmentation and support messups)

Mike Kasprzak
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We are already well past the point of sustainable on mobile. I don't think Microconsoles are the answer, but it is a nice diversion. There's something to be said about "making something you love", because after when the smoke clears, at least you'll have that.

Andrew Williams
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I think that your use of the word, "dumber" is a very good way of "inflam[ing] controversy"! If people are choosing not to spend money on nice looking 3d games on mobile, that does not mean that they are dumb.

mikolaj Kuta
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I think he means by dumber is too much simplification: simple match 3 games, angry birds, very basic mechanics without storylines or depth to their gameplay.
Even on consoles you can already see signs of this: the "mainstreaming" of games such as CoD series or Dead Space, where the original dead space has had incredible atmosphere, the latest instalment is a shoot and gun with some spooky elements.
The bigger you want your market the more generic product you have to make, ie: dumber.
(I'm perfectly aware the storylines in our games aren't that good most of the time, but they're definitely better than what the most popular mobile games offer)

Michael Ball
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Whether you like it or not, there is such a thing as the lowest common denominator.

Brenton Haerr
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"Liking match-3" and "Not caring about mobile 3D graphics" are not synonymous with being the "lowest common denominator."

The success or lack-thereof of "core-ish" games on mobile will not be an indicator of the relative intelligence of the mobile market--it will only be an indicator of the market's tastes and the inherent strengths of the platform.

Santeri Saarinen
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Of course it is synonomous. The most popular is always the most popular because it caters to the lowest common denominator. Since the core titles popular on consoles are not popular on mobile (assuming similae quality of gameplay between platforms) means that there's even lower common denominator within mobile userbase. And to that one, basic core title (aka simple shootet) is often too complex.

Josh Klint
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I meant that their IQ was lower and tastes poorer. Or that they don't really care, because they're not really into games in the first place.

To be more precise, the things they base purchasing decisions on are not technical in nature, so it becomes very hard to penetrate the market based on any technological innovation.

Alternate Procellous
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The reason you're seeing "market leaders" abandon mobile games is because they aren't leaders in that market. They're leaders in the core gaming market segment. They're good at what they do there. Their competencies don't necessarily translate to other market segments. In business, it's often better to find your niche and own it.

Epic and id decided that mobile wasn't their niche, that's all. The skills they have in-house don't necessarily apply to mobile game development. If they were to develop those skills (either by building them or acquiring them in the form of new hires), it means a considerable up front capital expense for them to enter a market that's already extremely crowded. It might be an expense they'd reconsider if mobile games threatened their niche, but I haven't seen a really successful first person shooter on mobile yet. People who want to play first person shooters are going to play them on their PC or their dedicated gaming console -- not on mobile.

James Coote
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Conversely, companies like Gameloft and Madfinger seem to be doing just fine making relatively high-spec 3D games for mobile.

I suspect it's more to do with getting the business model right than anything inherent to the platform or games themselves. Whether it's failure to adjust the development process for mobile, or to market / sell the finished game, clearly id and Epic didn't learn enough from their experiments with mobile to feel confident of getting it right next time

Also, people have a tendency to think in dramatic all or nothing terms. Eventually, growth in mobile will stagnate and companies will have to think a little smarter about how they make and sell mobile games. Equally, great big baroque blockbuster console games aren't going to suddenly disappear. They'll just become less and less frequent (and even then, I doubt they'll ever die out completely. People still write new symphonies and operas)

John Gordon
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People see the mobile market growing and the home console market shrinking. This is really happening, but the former is not causing the latter to happen. They are in two different market spaces. Where is the proof? If they were in the same market space, then Nintendo handhelds would have killed off home gaming a long time ago. Instead what we have seen for decades is Nintendo handhelds thriving without affecting sales in the home console space. "Gaming on the go" is in a different market from home gaming.

If mobile gaming is taking customers from anywhere it is from handheld consoles. I believe it has already taken Sony's handheld customers, and in time mobiles will probably eat into Nintendo's handheld business to some extent. But if home consoles crash it will have nothing to do with mobile devices.

The problem with home consoles is that software development just costs too much under the current model. The demand for home consoles is still fairly healthy, but as time progresses home console developers will have a harder and harder time keeping their customers satisfied with enough games coming out. Plenty of smaller studios have gone out of business in the past few years, and bigger players like EA have lost tons of money. This means there are fewer games out there year after year, and the people making the games are growing more conservative since the risks are so high. Customers are already becoming disgruntled about seeing the same types of games year after year. If home consoles stay on their current trajectory, then they will kill themselves off. The home console guys need to figure out home to rein in their costs, or they are going to destroy themselves regardless of what is going on in the mobile space.

Bob Johnson
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Good point.

Paul Grayston
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I think something to consider for the drop in the core console market is the fact that up until this point each new generation has brought the gamer a staggering step up in graphical fidelity and speed, look at the step from Playstation to Playstation 2, Xbox to 360, gamers could look and instantly see a visual improvment, something they could put their money behind.

That gap is now so small and seemingly insignificant that gamer's are simple less in a hurry to upgrade, they cant look at a XBO game and think "holy crap look how much better that looks than the 360", same can be said for the PS4, were hitting the visual ceiling people. and the gamer's know it.

This is something that Mobile really does not have to contend with, as has been said above its a different market, people are not looking for HD rich 3D scenes, they just want something that looks nice and is easy on the eye, and that's what they are getting at the moment from the mobile market.

I think the days of Core Consoles are numbered, but rather than fade away I think they will blend in and merge in with other hardware, I don't think it will be long before TV's come with a console built in as standard, it seems to me like the next logical step.

Michael Pianta
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This is why I think, as far as consoles go, Nintendo may have the last laugh. Their conservative approach will insulate them from losses due the shrinking console market, and their core fans will keep them afloat. Then, as Sony and MS move on to greener pastures or totally refocus their platform towards a general entertainment market, the people who really MUST have the best possible graphics will switch to PC and the remaining people who simply prefer console experiences will switch to Nintendo because nothing else will be left. This will make the Nintendo platform more attractive to third party developers. I can imagine a scenario where there is mobile, micro consoles, PC, entertainment platforms that happen to have some games, and Nintendo, all by their lonesome, keeping themselves afloat with their core IPs and loyal fans and the few holdouts of the old console market.

Who knows if that will actually happen but it seems like a possibility.

Sean Sang
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It's an interesting theory but if Wii-U numbers are any indication the Nintendo loyalist are very small (probably the first two months of sales accounts for their size) which I don't think is sustainable for them. I see Nintendo stop making hardware and becoming a software developer.

Micro consoles I don't see catching on, at least not in their current form which sales so far is holding true. Micro consoles are not as good as home consoles or PCs and at the same time not differentiating themselves from what people are playing on their tablets or smart phones. For me this is a dead platform.

There will always be a market for the hardcore who will game on their PC but the problem is what companies out there will spend the money to please that crowd which is just too small? Sure the big engine makers will try in an effort to sell their engines but if the way game budgets are going who will their customers be? The risk to reward ration just doesn't make financial sense.

What the industry needs is to re-evaluate the state of game budgets and quit this obsession of improving game technology with blind abandonment. Gamers have shown time and time again with their wallets they don't care if the technology improvement does nothing for improving game play. You can wow gamers with better graphics but if the game experience is hollow and not interesting don't expect to get the sales you need to turn a profit.

Michael Pianta
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I agree with what you're saying, especially the last paragraph, but I think you're underestimating the size of Nintendo's core audience. As there has never been a Nintendo platform with ONLY Nintendo games on it, we don't know what that number is exactly, but I would estimate that it's somewhere in the neighborhood of 10 million. If the hardware was sold at a profit (as Nintendo usually does, though not with the Wii-U) and assuming Mario and Pokemon and what not remain about as popular as ever, Nintendo could probably sustain itself, barely. But at any rate, I wouldn't expect that to happen. Rather, because they stand to lose less money (or lose it at a slower rate) they would simply outlast Sony and/or MS and then become the beneficiary of all those displaced consumers.

You say, "What the industry needs is to re-evaluate the state of game budgets and quit this obsession of improving game technology with blind abandonment," but that's exactly what Nintendo has done, and it hasn't really worked out too well so far. But they are well positioned for the future, I think. Sony and MS can't pivot fast enough nor is it what their consumers expect and want. Nintendo just has to ride it out for a few more years.

But we'll see how many PS4s and Xbox Ones are sold this Christmas.

Michael Stevens
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I think the Mobile and Console spaces are both on track to tear themselves apart, but I think there are enough divisions in the market (Mobile, console, handheld, arcade, indie, English, Chinese, etc) that there's enough of a buffer to let people adapt and reorganize if anything weird happens.

I feel like a lot of the uncertainty comes from not having a unified format like DVD (PC doesn't count, mobile eventually could). Unity is helping on the "making stuff" side , but the "playing stuff" side still requires too much customer education and gear. Content-wise, almost nothing deserves more than the month-long shelf life it currently gets, but thats ,like, four other balls of wax. Most people can't play most games and don't have a reason to want to, and the sword of Damocles will stay hanging until someone can figure out how to address that without business cynicism or patronizing.

Robert Green
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I'm curious as to what the mobile market crashing would look like. The number of people making games is so large, and the cost of entry so low, that 99% of games could be failing to make a profit and I doubt anyone would be shocked. That could be happening already for all I know.
Having said that, it also wouldn't surprise me if the number of people still willing to spend US$60 on a game isn't enough to support console development as we know it.

Steven An
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I question your assertion that Rage for iOS is a better game than Candy Crush :P

Larissa Krasnov
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What PC and console devs really need to do is prioritize and deliver the gameplay they've been delivering for years (preferably improved upon) without the insane graphics and associated costs they've been delivering. Successful games like Orcs Must Die!, State of Decay and Minecraft prove that compelling 3D avatar-driven experiences can be created on a decent budget without much graphical fidelity, massive teams and massive prices.

A sufficient player-base will always exist, given a sufficient quantity of games - devs just need to adapt to the amount of money that player base can move. It would be a shame to see most non-mobile game genres die a bloody death because developers refuse to stop investing millions in high-resolution textures and multi-million-polygon scenes. Because as I see it, that's what's really at stake here - not hardware (when it comes down to it, why care what it runs on?), but GENRES - control paradigms, gameplay geometries, story types, and the whole idea of aspiring to create a coherent fictional world the player experiences, rather than digital playscreens for people to prod at while on the can.

I personally think that the mobile market has the feeling of a market that is being flooded and will eventually correct itself, but I guess I'm hopelessly biased.

Peter Eisenmann
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Why should developers stop investing in better tech? It's the only thing they can argue their price point with. Not many people will buy a PS4 game if it looks like it could run on PSX.
I agree with your concern about traditional game genres though. Kids who discover gaming primarily through their mobile device will have a hard time appreciating a game with a long, unfolding storyline or complex control scheme. Google play seems to me like digitized ADS sometimes.

Jonathan Murphy
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Yes, no, yes? I'll flip a coin. Until 2014 is over anyone's guess is as good as the next. Will Mobile be the great savior? My magic eight ball says, "No."

Andreas Ahlborn
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One of the main problems of these markets is the fact that the downward spiral towards zeropriced (read:FREEMIUM) products is a very thin line to walk.

Going Back to high-price for the market as a whole is highly unlikely. (XCOM is not a trendsetter, in my opinion) But what happens if jurisdiction, say, makes it mandatory for modile developers to refund customers for ingame purchases, if they are not happy with it. ( I can take anything I buy within two weeks back, without even explaining why)

Or impose the gambling verdict on most of the slotmachine-like games (for juvenile protection) and thus shutting down the complete freemium segment that is tailored to kids? Which will bleed the market in the long run, because kids will be coming back to consoles/handhelds when every micropayment-app will be forbidden for unaderaged customers.

Gameloft, which launched a AAA-Farmvilleclone for our company targeted at kids between 8-12 shyed away from the next Project with the reasoning: at the moment the legal situation in Europe is too complicated to justify furter investmentrisks on their side.

What initially is a big Plus in digital distribution (24/7, instantaneous reachablity) could well become its big Minus if any of the states in the western world would make an example to ban/restrict/censor monetarization models targeted at underaged consumers, making them practically as "dirty" as Porn, Tobacco or Alcohol.

Bob Johnson
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As long as consoles can deliver experiences that mobile can't then the customers will be there.

All these people that say mobile is taking over never list the equivalent mobile experiences to all the top selling console games. The reason they don't is because they can't. There are none.

daniel birchal
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Hardcore gamers wont trade mobile games for console games. And they wont vanish any time soon.
Hardcore gamers are the ones you can allways count on, they wont stop buying games in a recession, like the casual do. Casual can be a good market for the quick buck, but I doubt it can be as stable as the hardvore market.
As long as youguys respect your customers and keep the "regular" console gaming model up and running you're safe! By respecting I mean not getting to greedy with all that anti-consumer stuff like allways online requiriment (when not really necessary) and digital distribution only (for AAA $60 games).

Josh Klint
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Wow, I had no idea this blog would generate so much discussion. This was just me thinking out loud one evening. To expand on this thought, it seems to me like mobile has effectively stolen casual players away from the consoles, which the consoles needed for volume. PC gaming looks like it is resorbing some of what it lost to the consoles, mostly due to low-end PC graphics hardware becoming moderately better. Consoles and mobile could go any which way. It will be interesting.


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