I would argue Microsoft and Sony are sustaining because the economy is still recovering and the market is effectively saturated. It's not like blockbuster movies died because of YouTube.

I always hear about "game time migrating heavily to mobile" but I don't really see it. If you're talking about percentage of total game time of the entire population, then sure, but that's because people who didn't play anything before do now, and because people who did play before now play at times they previously didn't. The people who set aside time to play high-end games are still doing so. People didn't cut back on World of Warcraft or Call of Duty time to play Angry Birds.

I would be happy to purchase a next gen digital-only console, and develop games for it, that simply provided a way to play apps on my HD tv - if it had PSN/XBox Live Arcade/Indie style games along with apps from Android or WP8/Win8 and could stream, media center style; Netflix, HuluPlus, YouTube, Vimeo and media from my home network or USB drives I'd be set. But that market is being served by Ouja or GameStick or Roku - not Nintendo or Microsoft or Sony.

It would not have to be the fanciest 3D processor, have optical media, terabytes of data, or require holograms or mind-reading. It should recognize my gestures, voice and use a gamepad. Having a 2nd-screen (WiiU or Xbox to mobile style) would be nice since I want to play sometimes when my TV is being used for cable watching. It should have a good internet browser and keep me upto date with my social network - like my Windows Phone or Windows 8 does, by integrating those feeds into my interface. While I can see certain games being streamed via cloud servers - I like the HTML5 and thin-client style solutions better these days for compatibility reasons... it just seems easier for small developers to support than cloud streaming does.

As more options pile onto the playing field (like nVidia Shield) it seems more likely that an Android or iOS solution will succeed before a console solution can gain back market share.

Give me an MINI Xbox with WP8/WinRT style apps, Xbox Live, media center streaming and access to my home network with Kenect and BT wireless controllers - allow me to also play those same games and stream the same media on my tablet and phone - and I'd be happy as heck.

Oh - and most important don't make me spend more than $200 on it.

Imagining MSFT going the way of DEC brought joy to my day.

Recent events seem to contradict the thrust of this article.

Both Sony and Microsoft have begun efforts to leverage their console efforts into broader game-curation brands. PSMobile, if Sony develops it properly, will become a hardware-agnostic platform for game distribution, probably in competition with Valve's upcoming LittleFoot. I fully expect the same to happen with their non-mobile offerings. Did we forget that the company acquired Gaikai last year? And then this happened?:
http://www.vg247.com/2012/10/11/sonys-revamped-gaikai-teaser-shows-uncharted-kil
lzone-god-of-war-more/

We may very well see PS3-era first party games, along with Gaikai's other offerings, streaming on PCs, internet-enabled TV's, and other devices. Sony will probably try to build brand awareness among a broader audience to lure more purchasers towards their next Playstation. Eventually, I think, these offerings will converge and if there is a fifth Playstation, it will be something along the lines of what Valve is doing with BigFoot: a relatively hardware-agnostic platform but with the platform creator offering their own optimized device.

Microsoft has been moving XBOX Live to PC's and mobile devices as well. Rumor has it we'll see an XBOX-branded Surface. They're probably going to pursue a similar route--if you recall that leaked Durango design document, it referenced cloud processing.

There was once a group of egg farmers, who ate nothing but eggs, day after day. They were healthy though, and the farmers were happy, and it seemed nothing would ever change in the community. But one day one of the farmers felt like he was so sick of eating nothing but eggs that he killed one of his chickens and BBQ'd it and it was GREAT. Wow! What a fantastic meal! And the other farmers thought "wow, I should try that, eating chicken seems so much better than eating eggs!"

Well the farmers started killing their chickens and eating them and the feasting was fantastic. But then they realized they weren't getting as many eggs as they were before: they couldn't survive on eggs alone now that they had fewer chickens. So they had to keep killing chickens until there were no chickens left.

Parable? The AAA game market might seem small compared to the cash cow social phenomena, but it's sustainable and AAA gamers have a continuous and voracious appetite for content. But when you kill off your AAA development (and the hardware ecosystem that revolves around it) to cash in on the social fad, you also kill off long-term sustainable development.

Not only has the "race for the bottom" with mobile driven the 99 cent game into over-priced oblivion, but it's also gutted the quality design that brought us into this industry to begin with. It won't take long for the saturation of skinner boxes and cow clickers to drive the "social explosion" into extinction.

When it does go, people will turn back to high quality game experiences. The long term winner will be the farmer that still has all his chickens alive and happily laying eggs.

The analogy is bad. PC could do anything a DEC could do, they were slower maybe but functionaly they were the same.
Mobile games have nothing to do with AAA games, the experience is incomparable. Ouya and android boxes with gamepads could replace current big consoles in the long term, but mobile gaming is simply a different market. It will cannibalise the AAA market but not replace it completely.
Don't confuse opening new markets with disruption in an existing one.

Wow, the guy has no idea what DEC's hostory was or why it failed.

First of all, DEC was the leader in mini-computers, not mainframes. It was minis that put the company on the map, along with an emphasis on personal interaction. A monochrome screen and keyboard may seem primitve to us but it was a huge improvement over handing a pile of punch cards to a system operator and waiting for a printout of the results.

DEC did attempt to get into the PC market, as did so many others, with machines that ran MS-DOS but weren't BIOS-level IBM PC compatible. THey did some incredibly dumb things, like require the purchase of preformatted floppies. DEC figured this would be so lucrative they didn't equip their machine to format its own discs.

DEC was once a major innovator but but its internal culture became frozen around that era and it couldn't see how to approach a new customer base in the small business and consumer sector. Even so, during its long decline DEC continued to produce remarkable new technology like the Alpha processor and the FX!32 emulator with code retention that was a major advance in how architecture migration would be performed by Apple (68K to PPC to x86) and Microsoft (Xbox to Xbox 360) by other companies who paid attention.

I think consoles future hinges on the tech they put in. If there is a clear distinction from a ps3/360 games to the new gen ps4/720 games then they will be fine. If the next gen madden, and fifa, and so forth bring us to the door step of photo realism game play, consoles will be fine. If they do not, it may well be game over. Gamers/consumers are used to giant steps tech wise between console gens, they expect it, can microsoft and sony give it to us? Thats to be seen.

In my opinion Unity 3D is the best solution to the problem consoles are trying to fix. One of the ideas of the console is to provide a single hardware platform with known parameters to reduce the cost of game development. Instead of having to build for dozens of different video cards you only have to build for one. What's more is that the console providers can provide other services that game developers are happy to not have to build such as leader boards, community services and software sales and updates. Sadly, while it sounds good on paper it fails in execution. That is because the console becomes just one more platform they have to support. The Unity 3D approach is for the game engine manufacturer to take care of supporting all the hardware, while the game developers develop for the engine. It is similar to the way programming languages like Java and C# work. The programmer codes one way for all OSs. The runtime compiler compiles for the specific OS. In that way Unity has succeeded where the consoles failed.

There is still alot that Unity can do to complete the picture. They can provide some of the core services that make game development much easier. Their UI system is terrible. There is no good native networking solution. They don't have native avatars like Wii and XBox or leader-boards or community services but they are getting there. As a game developer what I want to develop is games. But all the other stuff takes a huge percentage of my time and money. If you want a true democratization of game development then provide a development environment that allows the game developer to focus on what drives their passion - the game.

The whole premise that the big 3 and the mobile industry are in some sort of life and death struggle has got to be one of the stupidest things I have ever heard modern game writers come up with. I have lost a lot of respect for people I thought were intelligent that buy into this crap. it is ignorant crap written for interesting headlines like "the death of the console" and " mobile conquers and refines gaming". It is a headline that grabs the flocks attention and gets a read!

Here is the basic flaw to the logic. the only away the argument hold up you would have to believe that there are only a finite number of gamers or there are not enough gamers to financially support all of the platforms out there.

Truth : this has never been the case. there has never been a platform that has failed during it's prime solely because there were not enough gamers on the planet to support it. the rate of increase in the human population is such that the number of gamers will always exceed the number of of assessable platforms.

another logic flaw is that the explosion in mobile has to come at the expense of console games because people cant have more than one console.

Truth : more and more people are multi platform. When I grew up only the lucky kid "spoiled bastard" had the NES or the Atari 2600. But never both. now days it is VERY common for families in the US that live paycheck to paycheck to have multiple game platforms in their home. As for the “Explosion in mobile” this is and offshoot of the casual and Wii phenomenon. The vast majority of these people weren't playing games before and therefor cannot be counted as a loss for console gaming. If anything I have know gamers that were exposed thru casual “Facebook, Wii, and Mobile” who because gamers and later got and xbox or a PS3. Hell some of them actually started PC gaming.

These writers act as though gamers got an iPhone or and iPad and all of the sudden said “Holy crap this is so awesome I’m gonna stop playing my xbox” or PS3 or whatever. This just doesn't happen. The guy that plays Call of Duty isn't gonna give up hist xbox for and iPad. Unless of course they make one that is just as good as an xbox and can be docked to the TV and supports 4 controllers. But things just aren't there yet.


Real Gamers, Are not gonna stop buying xboxes and playing halo and sit around on their iPhone playing effin Angry Birds. I’n not saying that they might not do both. Don't get me wrong I play modern combat or angry birds. But its because I’m somewhere where my xbox is not. like if I'm waiting in line at the DMV or sitting in the card with my kid while the wife is in the store. if my xbox or PS3 is available I’m playing a “real” game.

Besides. All of these claims of “console quality on a mobile device” are a joke. these things “even the Tegra 4 are not pushing near the number of triangles at the frame-rate and effects levers as consoles that are 5-7 years old. Their just not. Yeah technically they can do the effects but not at the frame rates or number of triangles and/or resolution that a 360 does. Even some of the best stuff going is still dialed back for the chips. is you look at the models in wireframe they are very optimized. There is not near the headroom the there is on the console.

When I can have a phone or tablet game that runs in 1080p at 60p and has 30 zombies on the screen with a hi-LOD of about 2000-3000 tris then we will have this discussion. Right now ever the really good mobile stuff from the lies of MadFinger has 1-2 maybe 3 zombies on the screen. And as good as Real Racing 3 looks a lot of what they show is not on a mobile device. and look at the number of cars on the screen for what they have been showing. In almost ever “non-pre-rendered” trailer shown there is a max of like 3 cars on the screen.


End of line...

Cousins has gold rush fever and fails to see different markets here.

Just as tv came along and didn't destroy movie making.

We have a new mobile gaming market and will still have AAA games.

Any problems AAA gaming has in the future will be due to the cost of making AAA games outstripping the audience for those games. And nothing to do with mobile gaming.

We were already seeing this before the iPhone. Game prices were raised $10 this generation.

But it isn't like consoles don't have digital stores with inexpensive games. They are adapting.

It also isn't like consoles were ever as appealing to as large of an audience as pcs or phones.

And it isn't like the mobile gaming market isn't enjoying the novelty of capacitive touchscreens and dirt cheap games. Maybe it is hard to believe now but swiping up or down eventually won't be so novel. And the low hanging fruit will be get picked and fresh experiences will dwindle. And even dirt cheap or free wont be enough to attract consumers.

Last if anything the innovator's dilemma is more of a problem with the smartphone and tablet platforms which aren't even gaming platforms first and foremost. Apple and the various Android manufacturers aren't going to bring gaming innovations to the marketplace for the sake of gaming. Their audience isn't there primarily for gaming.

Contrast that with console manufacturers who are there for just that. Look at the Wii U controller and 2 screen gameplay. Look at Kinect. Look at the Wii. The dual screens and 3d of the 3ds. Look at the upcoming VR headset tech. The 2nd stick Sony added. ....

Congratulations consoles, you have now matured. This is the same exact thing people said about pc gaming for the last 10+ years (since the console boom).

I agree with many above stating the markets are a bit different and one can't properly substitute the other. At least the current and the next generation of consoles are way better positioned to offer that "couch gaming" experience in the living room than anyone else at the moment. This may change over time, of course, but it's hard to believe that most of the people would be suddenly willing to give up the "AAA" gaming experience preferring to play on their tablets and phones. It will take years before tablets can provide a substitute for console gaming and it has many hurdles to overcome.

In the past there has been many different new segments of the markets that have been estimated to grow much faster than they actually did. It may happen that mobile/tablet market growth will slow down due several factors like device fragmentation or market saturation. Remember Wii?

Early 2000 there we predictions that mobile games market is going to be worth billions and billions by mid-2000, but I guess we've just last year come to close to those educated guesses people put forward almost 12-13 years ago. There's a similar story with MMO market size and it seems that social / facebook gaming is growing in much less than predicted a couple years ago (or at least predicted by Zynga). Things are changing and evolving and it may be that in a decade there is less meaning of distinction between different markets mobile vs console vs pc vs online as the same game experiences could be accessed from different devices and channels. For instance, in mid-2000 online distributed casual game markets on PC was a growth area, but I guess now it really doesn't make sense the define it like that as those kind of experiences have migrated to mobile and tablets.

In a sense PC can in part to replace consoles as devices, but the experience they would offer would be similar to what consoles are offering. I think it's still relatively rare for people to have a proper PC set-up connected to their main television&stereo setup in the living room as it's not as convenient yet to do for the most of the people. On the other hand, consoles are a bit like a very specialized PCs anyway offering many benefits and easy-of-use for the end consumers, so it's hard to see them suddenly disappearing or being replaced by something else.

Wait... why cant consoles be smartphones? Have you all seen how small some of these new consoles are getting?

In 2 years, is it not probable that you can run an app on your Galaxy V to act as a console Host that broadcasts the game play on the nearest smart TV.. at the same time all the other players in the room are using their smart phones as controllers?

Sounds like a good use of the 10 or so old smartphones well have in the drawer.

Consoles and mobile are merging.

I think this article is somewhat missing the point that none of the three console manufacturers are focused purely on "high end games from high end developers".

On the hardware front, all three have been pushing their consoles as media centers, adding features such as online media streaming, web-browsing, social tools, etc. And there's also the "VR" elements - Microsoft's avatars, Sony's Home and Nintendo's Miis.

On the software front, all three offer several tiers:
a) "physical disk" games, which range from low-budget 3rd party titles to in-house high-budget AAA titles
b) Curated online stores, which offer games at mid-low price points
c) Low end games - Xbox's Indie Games, Sony's Minis and Nintendo's Virtual Console

It's also worth noting that most - if not all - of the "disruptive" phenomena have significantly deflated or faded away altogether.

Mobile gaming - especially in the Apple ecosystem - was a major growth market for a while, but touchscreen controls significantly limit the range of gameplay experiences which can be produced, and the fierce competition in this area has led to development and marketing costs ballooning dramatically.

Social gaming earned a lot of attention, but this was arguably driven by both novelty and the ability to promote your wares via free/low-cost "pyramid scheme" marketing campaigns. The former has faded and the latter has dropped away as rules have been tightened on systems such as Facebook, and companies such as former Wall Street darling Zygna are watching their share prices rapidly dwindle.

Free to play (often atop the other two above) was another headline grabber. But again, as competition has increased, it's become more difficult for companies to get revenue from these, much as happened a decade or so ago with online advertising.

In the meantime, the core market has trundled onwards. There may have been some notable high-profile failures and it may not be as profitable as it used to be, but this is arguably at least partly due to the extended console lifecycle of this generation, as well as the impact of the recession and some fundamentally bad decisions from game publishers (bringing out uDraw on the Xbox 360, THQ?). But it's still going and will almost certainly do so, regardless of what next emerges from the industry's undergrowth...

I think the real fear here is not that mobile is pulling away hardcore gamers from their consoles but rather that the technology needed for hardcore gaming is changing and it is leaving the console out in the cold.

at the higher end, the PC is still master but there are tablets being released that are as powerful and much more mobile than even laptops

at the mid level, the bulky and quickly outdated console has multiple problems. It takes years for a console to become profitable as development cost and marketing often mean billions in lost revenue, and thus a big risk. by the time they start making a real payback on investment, they become outdated technology.

The I devices and similar have caught the attention of the world as a whole. Everybody has or wants one and they have proven to be great devices for gaming. Their functionality as phones, internet devices etc and their ease of use have opened the door to mass apeal and unlike what some people think, they have a large amount of, 'hardcore' content, not to mention, their is significant interest in development for new ip and experimentation in general.

What hurts Sony in particular, but Microsoft and Nintendo even more, has been the steady trends of decline across all their business. Sony has had a terrible decade, losing market share evrywhere in their business empire while Microsoft has also seen better days.

Even to play devils advocate and say that handhelds do overtake consoles and become the the only one really in a position to make a smooth transition survive here is Microsoft and maybe sony assume the rest of their business doesn't put them out of business. Nintendo is the real loser in this hypothetical reality we are discussing. Microsoft would easily be the dominant player not harmed by this.

What happens is dependant on many things such as instant access with no latency issues for a song would make behemouth $399+ consoles instantly obsolete when a netflix style streaming service would be all we need if the heavy lifting was performed on server farms.

We could have a box the size of roku 2 / apple tv which would contain playstation,xbox and nintendo dashes and we could still buy games and dlc digitally and all content would be stored off site. Dlc would function as a lightswitch don't own it and it's off buy it and it's on and carts,cd,dvd or even bd would be un necasary as it would be hyper fast access for less than road runner light....the only possible problem would be a psn size crash which would mean everything fades to black.

It's the eventuial destination /metamorphisis consoles will go through.

With ac,super wi fi and beyond you could even have a thinpad think gamepad designed for travel and be able to play the same home games on the road anywhere-imaging taking bioshock infinate on a road trip intact and when you arrived home you'd simply continue at the newest save not missing a beat.

This is where i expect to end up now flicking more angry birds on a tablet/phone.

I fully expect both new consoles to act as what the industry had been anticipating for a while now, a wonderbox that does everything for your living room. Which points to one clear differentiation, cell phones are in your pocket, TVs are in your living rooms.

Akin to phones becoming Swiss Army Knifes and encapsulating every aspect of life on a single device, next gen consoles will accomplish the same with televisions. There's the obvious PVR functionality, but also the idea of having a large selection of Apps on your TV, true effortless multitasking (this is bigger than I think most people anticipate), and the ability to easily connect with people across many networks.

So the only relevant question I see is whether or not the living room has lost its relevance to a degree that will permanently damage the console gaming industry. I'd argue that is has damaged it, but I do think that it has influenced the next generation of consoles in a good way.

We have evidence that the living room is still important: we have seen companies like Google and Apple attempt to enter this domain.

They have plenty of reason to want to break into the living room. Some tasks are well suited for it. Just as I'd prefer checking out twitter on a handheld device rather than my PC, some Apple users may prefer using FaceTime from their couch rather than with the handheld device. They may prefer watching their iTunes purchased movies and TV shows on a big screen, and they may prefer having their music played on their HT audio system. Hence, Apple TV made a lot of sense. It still does, despite it's low sales.

When the iPhone came out, it demonstrated that a versatile computer can exist in your pocket, and that this computer is intrinsically tied to your life. It also came after a period of stagnation from products like the Blackberry. We have seen the same stagnation for the past few years in the console industry. When these new consoles come out, they are going to also demonstrate that you can have a versatile computer in your living room, and again, a computer that is intrinsically tied to your life.

When they do come out, these products are going to make a lot of sense to the general public and are going to turn televisions into another popular medium. Tablets and phones have coexisted, and the living room television can as well. Televisions and living rooms have suffered, yes, but that is because they've been left behind, technologically speaking. These new consoles will bring them back into relevance.

I think we'll see Nintendo become a software-only company like Sega within 8 years.