The Death of the Video Game Console Market
Last Updated on Friday, 26 September 2008 23:42 Written by Rich McGrath Friday, 26 September 2008 00:56
 | Written By Rich McGrath Friday, 26 September 2008 |
Thursday September 25th marked the start first annual New York Games Conference, at the Museum of Jewish Heritage. The New York Games Conference brings some of the top minds and talent of the Video Game industry together in one room to discuss the latest trends, predictions, and issues affecting the industry.
While there were many fascinating panels, it was the “Debate Club: Is the Console Entertainment Hub of the Future or Fighting to Stay Alive?” that sparked a great discussion. The Pro-Console team consisted of Justin Townsend, CEO & Co-Founder, IGA Worldwide and Robert Stevenson, VP, Business Development, Atari Group. The Anti-Console team consisted of Alex St. John, CEO & Founder, Wild Tangent and John Welch CEO & Co-Founder PlayFirst.
The Pro-Console team argued, the ability to play games from ones couch, and the high cost of entry into pc gaming, the immersive experience a console can provide, and the focus on console manufactures to turn consoles into media hubs, is propelling the future of the console market. "The core of the console market is the core and mid core gamer, and going after that living room experience, That original experience does not exist in the home office, or on your work computer, on a laptop or other devices. Those devices are not suited to have the full on immersive experience." Robert Stevenson (VP, Business Development, Atari Group)
While the Pro-Console team presented great cases, the
Anti-Console fired back and strong. Alex St. John cited the failure of the PS3,
and the lack of profit from 
Microsoft’s Xbox 360 causing them to forgo a next
generation console. “Sony is not the
company they use to be and the Playstation 3 is a market failure. Sony will
never recover the billions they lost on the current generation of consoles.
Sony says were not making another for ten years, which is code for we can never
make back the billions on we lost on PS3, let alone convince our executives let’s
make one again. Microsoft has a hole mile deep dug in the middle of Microsoft’s
Campus to bury the billion dollars of broken Xbox 360's they got. The Xbox
business is not a profitable business for them. It's only become incrementally
profitable for them after many years, and billions invested. To give you some
perspective the Xbox 360, which is the second most popular console in the U.S;
All Xbox revenues combine; create less revenue than World of Warcraft
subscriptions. The entire 360 software business is minuscule compared to one PC
game. So the interesting observation, is that both Microsoft and Sony are in a
position where their unlikely to ever have the motive to invest the Billions
into making another generation on consoles”. Alex St. John (CEO &
Founder, Wild Tangent)
Predicting Microsoft to exit the console market is a bold claim but a possibility. On June 12, 2008 IGN interviewed Shane Kim the Corporate Vice President of Strategy and Business Development at Microsoft. In the article Shane Kim posses a series of questions, that one could concludes Microsoft fight from the hardware console market and into the digital realm “How [do] you think about next generation? What is that next generation going to encompass? How are you even going to define that? All of that is part of the equation. What kind of geographic expansion do we need to see? Is the world more of an online world than a hardware-oriented world? I think there are some really fascinating opportunities in front of us." (http://xbox360.ign.com/articles/881/881386p1.html) The console market is in for a change, and it may not be better graphics, and better technology.
Alex's Speech at the NY Games Conference (sorry the audio quality is not the best)
Debate Club: Is the Console Entertainment Hub of the Future or Fighting to Stay Alive? Panel (sorry the audio quality is not the best)
Check back soon for more news from the conference!
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