Introduction: The turbulence that has been enveloping the entire gaming industry for more than a year has left some experts openly questioning whether the world is moving away from physical consoles. While these devices are presently one of the cornerstones of the entire video game market, their upcoming evolution could see their importance fall off or even end with them becoming obsolete.
Article: Having strong opinions about the future of the video game industry is historically speaking, a bad decision. Decade after decade, this creative and business field has managed to surprise many with constant change. But, while it is hard to precisely gauge the future, it is still very beneficial to understand its main trends, as well as possibilities of future evolution. That was precisely the goal of the recent IGN Live panel event, where several top-ranking industry experts provided their assessment of the upcoming big changes in gaming. The panel saw Shawn Layden, Van Burnham, and Michael Pachter discussing a range of possible movements of the video game markets, including the biggest question of them all: is it possible that the video game consoles will ultimately disappear?
Here, the experts assessed both the headwinds and tailwinds for these devices, as well as the role they play in the wider gaming ecosystem. Interestingly, the discussion also slowly progressed toward other domains of video game development, touching upon both hardware and software, which in this case represents the video game releases themselves. The conclusion is that the web of entangled influences and interconnections will not change overnight, but that the overall movement in the markets shows that the present form of consoles is at its peak. Instead of their further growth in this current form, the consoles will likely continue to evolve in different trajectories, all of which will have to deal with the overall changes in the global gaming and IT space.
Console Market Challenges
The panel of experts quickly agreed about the present state of the console gaming market. In short, it is declining both in terms of player numbers and console sales. However, that trend has been ongoing since at least the early 2010s, mostly because the console manufacturers failed to introduce new gamers to this ecosystem. Instead, players who own a console would simply replace it at some point with a newer model, or for example, Xbox games would move onto a PlayStation. The only difference appeared with Wii Fit, a console that tried to market itself as a means of getting in shape and exercising more frequently.
That device on its own introduced an estimated number of around 20 million new users who otherwise did not own any consoles. But, that was simply a blip on the radar in the overall declining trend. Presently, the console market is at about 250 million active users and the same number has been present for years. The start of the COVID-19 pandemic saw better fiscal results for console video game developers and publishers, as people had more spending money. That resulted in an increase of about 20 to 30 percent in revenue, but again, this came from the existing users. Ultimately, that inability to grow the user base represents the biggest chink in the console gaming armor.
Gaming Evolution
Consoles might have problems with attracting new users, but that is not the case with other domains of gaming. Mobile gaming, for example, presently deals with a global market of around two to three billion active players. That group will continue to grow in the coming years. The same goes for streaming services, which are also gearing up for further expansion. Netflix, one of the giants in this field, has been investing steadily in its production of video game-like experiences. Many other similar games, including fully-developed titles that will be played with external controllers, will come about in the next year or two.
However, the good news for the consoles is that nothing is on the horizon that will, in the technological sense, completely eclipse the present gaming technologies, including home systems like Xbox, Nintendo Switch, or PlayStation. A truly immersive VR technology has not proven itself outside of a very niche market, which is growing, but overall represents a minuscule part of the global gaming community. Mobile gaming is popular but has little ambition to go for the AAA or AA video game players. That is why consoles still have plenty of support to evolve into their new form.
Old Experiences and New Business Models
The main appeal of console gaming remains in the well-known high-quality experience. With the most expensive games, which cost hundreds of millions of dollars to make, consoles offer that seamless feel of playing excellent content in excellent visual and audio settings. Presently, streaming simply cannot globally offer a similar experience. While Tokyo, Japan has the broadband internet potential to stream AAA games without lag or other issues, London, UK, for example, does not. Many other places have a similar problem.
At the same time, many streaming business models, like Google Stadia, got shut down, so no one can say that streaming is a one-size-fits-all solution. Instead, consoles will have to adapt to the changes in the gaming industry, first and foremost when it comes to metaverse support. Right now, massive companies develop games like Roblox and Fortnite, which will undoubtedly get a bigger level of support on upcoming consoles. Furthermore, console-only games will become a rare breed, with many gamers looking for that interconnected feature of the metaverse experience. Yet, the metaverse gaming principle does not carry a direct threat to the physical consoles, nor will it push them out of the market.
Adapting and Changing
It was stated at the start that gaming constantly changes. That is why consoles will have to do the same. One aspect of that will be a move from very closed and centralized systems towards more open, metaverse-enabled gaming. Another aspect will be the need to make console gaming something that can also be mobile and used on the go, as Nintendo did with its Switch device. Tweaks like these do not mean that AAA single-player games will no longer appear for consoles or that physical home gaming devices will just vanish. But, the pressures that are real in the same gaming niche will not magically go away. Instead, the heads of companies that make both consoles and games for these devices have to work harder at adapting to the coming future, instead of expecting that the future will accommodate their present way of doing business.
Author: Ivica Milaric, game designer and assistant professor of game design at the Novi Sada Academy of Arts, Republic of Serbia