We’re witnessing a rare event: the changing of the guard in video game consoles.
Nintendo introduced its next-generation Wii U last year and Sony and Microsoft both recently unveiled their new consoles – the Playstation 4 and the Xbox One. These new offerings will replace their dusty current models, which were introduced in 2005 and 2006.
But this newest generation of consoles will face a drastically different landscape than their predecessors. More and more devices are competing for our eyeballs and video games are being played on more platforms than ever before – especially smartphones and tablets.
The question is, what does that mean for this new crop of gaming systems?
The so-called seventh generation was certainly a success. Microsoft has sold more than 76 million of the device’s current incarnation, the Xbox 360, compared with almost 100 million Wii consoles from Nintendo and more than 70 million PlayStation 3 systems from Sony.
But Alex St. John, an entrepreneur who worked on Microsoft’s pre-Xbox game efforts, says he is pessimistic about the prospects for gaming consoles.
“They’re coming out with the latest and greatest stone tool,” St. John said. “The new console that trumps the old console is called the Apple iPad. This generation of kids loves mobile games.”
Not so fast, say some analysts.
That’s like saying there is no place for televisions because consumers now have tablets, said Michael Pachter, a research analyst with Wedbush Morgan Securities.
Consoles still offer a top-line experience compared to their mobile counterparts, he said.
“The content is completely different from mobile. It’s like comparing YouTube video to ‘Avatar’ in the movie theater,” he said by email. “For those who wish to have a cinematic, immersive experience, consoles are the only option (other than PC), and console gaming is more comfortable. Anyone who wishes to play multiplayer can only do so on console or PC as well.”
Industry veteran Gary Gattis, CEO of Austin developer Spacetime Studios, said there will be room for next-generation consoles, but he said they will be much more of an all-inclusive living room device.
“Graphics will not define them like they did with the last generation because they do not offer the same leap in quality,” Gattis said. “Instead, consoles will be defined through their content distribution deals (like Netflix), peripheral devices (like motion detectors) and connectivity (cloud streaming).”
Newer systems will also do far more than just play games, compared to their older counterparts, Gattis said.
“You will be able to save your gaming sessions and broadcast them to your friends,” he said. “The next-gen Kinect (Xbox’s motion control add-on) will be able to detect your heartbeat, which is an amazing thing.””
The games business could use a jolt. Total U.S. retail sales of game hardware and software fell 25 percent to $495.2 million in April from $657.5 million a year earlier, according to estimates by NPD Group, a research firm. That figure does not include the sale of downloadable content over the Internet.
Sales of handheld devices like the Nintendo 3DS are being dented by mobile, Pachter said, but consoles aren’t being hurt as much.
“They might be denting the casual end of the Wii audience … but they aren’t cutting into PlayStation or Xbox sales at all,” he wrote.
“There is plenty of room,” he said. “YouTube didn’t kill movie theaters, and mobile won’t kill consoles.”
David Kaelin, who owns the local retro gaming Game Over Videogames chain, says he’s still a fan of consoles and is excited for the latest crop.
“Even with tablets, smartphones, PCs, etc. there is still no comparison to playing games on a machine and with a controller that are made for games,” he said.