Wednesday, April 25, 2012

From Dinosaurs to Birds: Wither Gaming Consoles?

I'm a digital media, data mining and mobile advertising sort of fellow, and - although I am an an active, non-apologetic gamer - I have never touched a line of game code in my life. (Well, I did write a Towers of Hanoi application in LISP for an AI course once, but that doesn't really count.)  So imagine my strangeness yesterday when I found myself at the LA Games 2012 Conference in Hollywood.

The experience was interesting - not quite "fish out of water," since I knew a surprising number of people there - but close. There were several people that I knew from my life in mobile, who apparently moved over to gaming through the mobile experience. Games on iPads, games on Android phones, that sort of thing. 

Opening Slide for Ben Cousin's
GDC Talk
I got there early, which allowed me some time to walk around, network and - most importantly - duck in to other panels. There was a theme that ran through some of the panels, and the afternoon live-panel debate on what monetization strategy will win, concerning gaming consoles. Some of the panelists and industry insiders are predicting the death of high end gaming consoles. One panelist even went so far to say that the PS3, XBox and Wii consoles were "dead man walking," and would be supplanted by tablets, phones and PCs as early as 2016. (I suspect this sentiment was given credence last month when ngmoco's Ben Cousin's called the death of the console an inevitability at the Game Developer's Conference. It's a convincing argument - you can see Ben's talk over at Blog Games.) 

Interesting theory - but it feels shortsighted. (Or, more to the point, surprisingly self-serving, since some of the advocates of this idea ran mobile gaming concerns.) There are a couple of reasons why this feels shortsighted to me.  To begin with,  there are two types of gamers. The first type I would call "arcade gamers" - sitting on your phone for 5 minutes a shot to play relatively simple, yet satisfying games, like Plants vs. Zombies or Angry Birds is a fine way to kill a few moments of time. And while I fully realize that the sophistication, and therefore gaming capabilities, of mobile devices will increase over time, there are just inherent limitations of gaming on mobile: the device itself is the controller, which limits the activity choices and availability. 

The second type of gamer can be thought of as the premium gamer: on a couch with a controller, a gaming console connected to a television (or high end PC), and a beer, a premium gamer will spend hours at a shot immersed in a game (either alone or online) playing a complicated, cinematic game through to completion. Both types of gaming are completely legitimate, but they are completely different experiences. 

However, the primary reason that the belief that the console is going away doesn't quite feel right is the reason I was at LA Games in the first place. I was asked to sit on a panel called "Entertainment on Consoles: Reinventing the Media Hub of the Living Room," moderated by Chris Marlowe over at Digital Media Wire

Game console penetration, for just the XBox and PS3 alone, is around 50M units. Unlike other consumer products, the hardware refresh of a typical gaming console is around 10 years. The reason for this has to do with the complexity involved in developing and engineering games for these systems - a typical game for your iPhone can be constructed in months with just a few people, whereas a premium game for a high end console is more like a movie production: there are hundreds of engineers and game designers, voice and motion talent, set design, etc. It takes upwards of a year or two to create, so having a box that gets hardware refreshed in any timeline faster than a decade is not going to attract a lot of developers. (Why spend 18 months and millions of dollars engineering something only to have the hardware requirement change on the 19th month?)

So, in order to combat consumer fatigue, modern gaming consoles are designed to be as future proof as possible for the technology of the day: high end processors (both CPU and GPU) are designed into systems that can be reprogrammed with new firmware. Constant internet connections to the mothership are made so that new software, operating system changes and business models can be injected onto these systems through upgrades. (For instance, the ability to buy games directly through the Playstation Network wasn't available when the PS3 was launched, but it is now.) The systems are typically sold at a loss to the company that is making/supporting the console, with promise of payouts on the backend for licensing deals, game developer fees, and consumer subscriptions.

All of this makes these boxes attractive purchases for consumers - you are almost guaranteed that the $200-$400 you spent on a box in 2006 will still be a viable device in 2012. 

It also makes these boxes excellent trojan horses: they are quite powerful out of the box, and once installed at a consumer's home, more and more functionality can be added remotely. Modern gaming platforms, most notably the PS3 and XBox have re-invented themselves to be more than just game platforms. These devices now allow users to rent movies from their in-device stores, or download applications such as Hulu+, Netflix and Amazon Instant Video to get film and television through these other sources.

Both the PS3 and the XBox have recently retooled themselves to reflect this additional tour of duty: the PS3 version of Netflix is the only one that outputs in 5.1 audio, and is the only gaming console at all to carry Amazon Instant Video. In January, Microsoft released a complete UI redesign for the XBox reflecting not only the "Metro Tile" look and feel to the XBox, but actually de-emphasizes games as the primary driver on the XBox in lieu of applications. The XBox app category downloaded most frequently? Video applications. (The HBO GO App on the XBox is a thing of beauty, especially when paired with the XBox Kinect.) 

I suspect that the next game console hardware refresh we see (from both Sony and Microsoft) will contain quite a few changes. Some easy to guess predictions: no physical media, higher bandwidth connections, Thunderbolt output, easy mobile connectivity for session shifting (this has already started in the case of the PS3), options (either physical or wireless) to use mobile as controllers, and higher resolution output. They will be smaller, easier to connect, less power hungry, and more discrete devices - perhaps deals will get struck with cable operators similar to what Xfinity just released with XBox, freeing us from cable boxes forever.

So, is the gaming console really the dinosaur of gaming? Sure, but dinosaurs never really became extinct, they just morphed into birds...