Gaming is, undoubtedly, the most popular form of entertainment with younger generations and the older members of society are keen to take it up too. For some people it’s even becoming a way of life, with gaming competitions offering thousands of dollars prize money.
New developments in technology mean that gaming is becoming even more widespread, entering more aspects of our everyday lives - like our phones and mp3 players. However, this modern interpretation of gaming is killing the traditional console market.
The Games Console
The history of console gaming as we know it today goes back to 1967 when the Brown Box was introduced to the world by German television engineer Ralph Baer. However, the games console didn’t really kick off in the mainstream until the eighties, when the Gameboy was launched. Ironically, this handheld console could also be the reason for the current crisis in traditional console gaming, as it showed that gaming could be portable.
Despite this potential danger to their business, the development of portable consoles was generally controlled by the main games console manufacturers, so any threat was always in their hands. It may have been this that has led to the slow development of the games consoles themselves. It has become quite normal for cycles of games consoles to take in advance of 5 years, which by modern technological standards is crawling pace, especially in comparison to smartphone technology.
Life time sales figures for the current generation of consoles in the market are still impressive though, and it is a very competitive market. Figures for the Xbox and Playstation 3 are 67 million and 64 million respectively, while 96 million units of the comparatively cheap Nintendo Wii have been sold.
However, figures show that there has been an arrest in sales figures since the console gaming high between 2009 and 2010. In 2010, the PS3 hit its highest sales figure since its release in late 2006, reaching over 2 million sales in the 3rd quarter alone. Since then, however, sales have started to decline and have now plateaued. Similarly, the Wii reached almost 4 million sales at the end of the final quarter in 2007, before suffering a steady decline – and sales have now reached an all-time low; this has prompted a reaction from them with the announcement of the Wii U. Smart phone sales on the other hand read differently; they are turning the games console industry on its head.
The idea of the smartphone has been knocking about for a while but it wasn’t until 1997 that the term was officially coined. It was in this era that Ericsson unveiled their concept smartphone, the GS88. Since then, the technology in smartphones has improved dramatically – as have its sales. In the fourth quarter in 2011, figures show that 157.8 million smartphones were sold worldwide, bringing the number up to 491.4 million units for the year. The best-selling smartphone in that year was the iPhone with over 20 million units sold in 2011 alone – this equated to a year-over-year increase in sales of 142%.
Compare this to games console sales figures and the disparity is stark. Of course, it would be right to say that they are too different platforms but owing to apps, the smartphones’ answer to discs and cartridges, the two platforms cross over more than the games console industry would like.
Although in 2011 video games sales figures were higher than those of apps, apps sales were increasing whereas video games figures had slipped from the year before. This may be because apps are cheaper but it also shows that gaming on the move is becoming more and more popular and it is something the games console industry is going to have to address. So what’s in store for the future of console gaming?
The console gaming industry is already trying to react by increasing the development of its own handheld consoles. But figures of these don’t compare favourably with top selling smartphones. The top selling handheld console, the Nintendo DS, peaked in the first quarter of 2007 reaching around 9 million sales. Since then nothing has even come close to this, including the 3DS. But even advancements is handheld devices won’t solve the problem for static games consoles, which are the companies’ main source of business. So how will these types of consoles have to adapt?
It could just take the release of a new generation of games consoles to give the market the injection of sales it needs, but it is still likely that these machines will be the last of their kind. Developers are already looking into integrating games consoles into TV sets, which would mean you would be able to stream games with streaming services such as Gaikai and Onlive already available. It would also mean that companies would be relying more on digital games distribution than the physical hardware. This will obviously help console companies do away with another threat to their business – the second hands games industry.