It's been a few years, but this holiday shopping season again features a pair of brand-new video game consoles for consumers to quibble over in the form of Sony's PlayStation 4 and Microsoft's Xbox One.
These are the first new consoles from either company since 2005, when the Xbox 360 came out a full year before the PlayStation 3 and Nintendo's Wii. That time window broke the traditional five-year development cycle, thanks in part to the Great Recession and life-extending geegaws like Microsoft's Kinect and Sony's Move.
The true defining characteristic of this eighth generation of home consoles, however, is that it may be the last time we ever see the launch of a round of boxes devoted solely to playing video games.
It's not that people aren't interested in gaming anymore — far from it. A study from market research company Parks Associates last year claimed the gaming populace has increased 241 percent since 2008, to 135 million people who had played at least one hour a month. The age of the average gamer dropped considerably in 2012, as well, going from 37 to 30 in just one year, according the Entertainment Software Association.
Numbers like that are debatable from several angles (NPD said the number of gamers actually dropped 5 percent last year, to 211.5 million, using different formulas), but the root cause is the same: Mobile gaming, via apps or social media or some other outlet, is skewing the numbers away from the hardcore gamers who sit in front of their televisions or computer monitors for hours on end playing the latest AAA release. In their place is a breed of game consumer less concerned about graphics and multiplayer and more interested in whether they can play Words With Friends or Angry Birds on a tablet or smartphone.
In short, the fastest-growing segment of gaming is largely disinterested in whether the next Final Fantasy will have a slightly higher resolution or Battlefield 4 has 64-player online play. And that spells big trouble for Sony, Microsoft and Nintendo, who have sunk all their capital in a legacy razor-and-blades model that's been around since the days of the Magnavox Odyssey.
I'm just old enough to remember the Video Game Crash of 1983, when a glut of more than a dozen different consoles with sub-par software ruined the market and almost destroyed the entire industry. These days the Big Three control the console market, and the product is of exceptional quality, so that scenario is probably out. What's more likely to happen this time around is that people will look at the new consoles, with their attempts to integrate music players and on-demand video services and online file storage and so on, then look at their iPhones and Rokus and TiVos and tablets and laptops and wonder whether they really need to clear space behind their televisions to free up an HDMI port for another black box. The fact that they still have perfectly functional but incompatible 360s and PS3s and Wiis that mostly do the same thing won't help matters. You can ask Nintendo about that, as its WiiU has shipped (not sold, an important distinction) fewer than 4 million units since its launch last year, recently seeing a bounce only after releasing The Legend of Zelda: The Wind Waker HD, which is essentially a rehash of a popular title from the GameCube.
To be sure, early adopters have embraced the PS4 and One. Both consoles have reported sales of about 1 million after launching earlier this month. Microsoft boasted last week that it was the largest-ever launch for an Xbox, now in its third iteration.
But both also have reported hardware errors upon release, which Sony and Microsoft are trying to downplay — some PS4s aren't cooperating with TV sets, and the One seems to have a round of faulty optical drives. Sony says hardware problems are with about 1 percent of consoles, while Microsoft already has a replacement procedure at the ready after the 360's Red Ring of Death fiasco.
Hearing about something like that probably doesn't do much for the young potential gamer or their paying parents, who grew up playing the Atari 2600 and NES. Why invest $400 or $500 for a new box — with one controller and no pack-in game — when there are already so many other outlets? Will they really want to play Destiny or Mass Effect 4 that badly? Will they care about any game at all?
The industry may learn the hard way that beyond a core group of fanatical console acolytes, consumers at large are eschewing their wares in favor of cheaper and easier alternatives. And not for a lack of quality, but more because the concept is becoming outdated, like playing DVDs or writing checks. You can still do those things, and many prefer it that way, but why hit up Redbox when you can rent it online through Amazon Prime, or write a check when you have a debit card?
The highest-ever year in console sales was $14.1 billion in 2009, Forbes reported, and that feat hasn't been matched since. This next year will be lucky to top $12 billion, analysts say. Free-to-play options, meanwhile, managed to more than double their audience in the last year, NPD claims.
Consoles may simply fall victim to the same market and technological forces that are upending the music industry, cable and network television, advertising and, yes, even newspapers (especially newspapers). In that case, the Big Three will have no choice but to adapt their offerings for consumer preferences or fall to the wayside, like every medium from illuminated manuscripts to Betamax.
We have anywhere from five to eight years to find out if they're willing or even able. The clock is ticking.
Joshua Gillin writes about video games and entertainment news for tbt*. Feel free to challenge his opinions at [email protected]