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The Death of the Video Game Console Market

At the New York Games Conference this week, Alex St. John CEO of WildTangent, claimed that both Microsoft and Sony are not developing next generation consoles. "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..."(Alex St. John CEO of WildTangent) More after the jump.

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Timesplitter143251d ago

well.... if they can bring everything to PC I wouldn't be SO sad even if consoles have a charm of their own

Tempist3251d ago

Wasn't it just 6 months ago they were calling the death of the PC? So if PCs and Consoles are both going to die... what are we going to have left? Apple? is the iTouch /iPhone going to save gaming?!

Silver3603251d ago

so he hates on the console market. It is just spin

soxfan20053251d ago

The next generation of consoles cannot exist under the same model that it does today. The only certainty is that Nintendo will continue to be extremely successful when they produce the next Wii. If Nintendo follows the same strategy and introduces the Wii 2 in 2010 or 2011, and uses 5 year old technology, then the specs will be something like this: PS3/XBOX 360 quality graphics running at 1080p high definition. Pretty impressive. More impressive is that they will probably sell it for $249 and still make a profit on each unit, because of the reduced cost of the technology needed.
It will be extremely difficult for Microsoft and Sony to introduce new consoles. The leap in graphic quality from PS2/XBOX to PS3/XBOX 360 is nowhere near as much as from PS1 to PS2/XBOX. The leap to the next level will be even less. How will MS and Sony convince consumers to spend $500-$600 on a new console that will provide a barely noticeable upgrade in game quality?
I just don't see a three way race next time around. With the extremely high cost of game development, exclusives, both first and third party, will begin to disappear. Why would a developer produce a game that 20 million people can buy when they can produce a game that is available to 40 million?
One of two things will probably happen next generation. Either MS and Sony join forces and produce a super console to compete with Wii 2, or either MS or Sony will drop out of the hardware race and concentrate on software only. As exclusives disappear, there simply will be no reason to have two extremely expensive systems on the market that play the same games.

Blasphemy3251d ago

As long as there is money to be made on licenses fees there will always be more then one in the console market. Sony and Microsoft will never join forces.

iceman28853251d ago

There are a couple of holes in your argument.

First of all, if the Nintendo releases a Wii 2 that has the same graphics as ps3/xbox360 and 1080p output in 5 years at $249, what will that be? It will be 7 year old technology copied from ps3 and 360, not actually impressive at all. Furthermore, I imagine in 5 years, when you propose the wii 2 would come out, the 360 and ps3 will probably be about equivalent or lower price. Say what you want but there is a big enough market for people that want to use the most high end technology to give whatever graphical advantage they can, and you can't really predict what the difference in gameplay and graphics from this gen to the next gen, since that is probably about 10 years in the future.

Secondly, you mention why would a company/developer create/release a game to 20 million when they can release it to 40 million...well ask yourself that question right now. There are many more Wii's on the market than their are ps3s or 360s yet all the big games that most gamers want are released for the ps3 and 360...odd.

I'm not saying you don't make some valid points, I'm just saying some of your argument is flawed.

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trancefreak3251d ago

ah the extremist the ones who claim the world is ending.

GiantEnemyLobster3250d ago

They should replace the picture with the playstation 3's "yellow light of death" LOL. Since if the extremely small percentage of people do get 3 red rings, they can get it repaired for FREE, but if you PS3 breaks (which TONS of them do), then you're screwed! Sony can't afford to replace your consoles, LOL! Therefore no more video gaming for you and thus the death of video games. Good job Sony!

dale13251d ago

the market is growing by billions a year and they have no plans to make another console, yep that seems logical.sony will get most of them billions back in the form of bluray and license fees alone, ms on the other hand will not

gamesR4fun3251d ago

yeah n if theirs one thing sony does its make great hardware then make better and cheaper. No doubtr in my mind well see the next version b4 10 years up tho they will keep supporting the ps3 for at least ten years like they said...
as for ms cant say but they dont seem to b shy bout throwing good money after bad so we may just see another box yet... lets just hope they get it right and make some money next time lol

Kratos Spartan3251d ago

I just hope it's not too soon. Give me one around 2014. The PS3 is too much a technological beast for them to spring a new one on us too early. Give the devs the time to figure this monster out, so they can tap, tap, tap that power that lies within.

Sarick3250d ago (Edited 3250d ago )

When PS3 was first launched it had nearly full compatibility. After losing money on the chips and having the prices higher they decided to remove the ps2 hardware to save money.

If they make the next ps4 who's to say it'll have any BC?

The PS2 chips aren't easily emulated. With the Cell your talking a lot more hardware will be requared to make the system BC.

The thing I see here is MS, did something using near PC hardware instead of creating a new CPU. This makes it easier to develop for as people have said before. If you look at the early console markets such as the ps1 you'll see how that easy of use helped that product gain marketshare.

If anything the next generation consoles will probably not have as much proprietary hardware in them. Look at how this gen the PS3 and 360 had some hardware derived from PC's. Even better the PS3 had compatibility with standurd memory cards hdd's, wi-fi and usb devices.

I see the next gen consoles becomming more like scaled down PC's with more bang for the buck.

I think bill gates had it right when he said something like.

"Computers don't sell software. Software sells computers"

If you look at it that way a console with great capabilities will only so well if people like the software on it.

R_19933251d ago

Yeahhhhhh and i also heard a a ton of people say Nintendo failed the gamecube and won't be coming back into this market. I'd like to hear those people tell me the same thing again now.

jamesrocks31473251d ago

F*ckin Cr*p!!!!!!!!!!!!!!!!!!!!!!!!!! ! agree with the microsoft bit tho ;)

Gam713251d ago

thats funny because i agree about the sony bit.

cheapndirty3251d ago

Are you aware of how a pubicly traded company works? If one of your divisions is losing billions and those billions wipes out the earnings for the year from your other profitable divsions, then why would the shareholders allow more money to spent on yet another conole?

MS lost 2 billion on the first xbox and so for is about 1 billion down on the 360.

Sony has lost 3 billion on the ps3. Even if they make 500 million a year profit it will still take 6 years to break even.

Blasphemy3251d ago

Actually Microsoft lost 4 billion on the first Xbox and anywhere from 1-2 billion on the Xbox 360.

comm133251d ago

Maybe sony lost billions on PS3 but the division will not get shut down.

1. Costs will be recuperated with future games and licenses

2. PS was crucial to the victory of Blu-Ray which if it is successful, it will bring billions of dollars into the market, and the adoption rate for it is pretty good.

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