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[Mpl90]

Nintendo was right in not trying to copy Sony or MS and make it the "console triplets." It's not enough to just release a box, they'd have to do lots of brand building and it would take time to build that name for themselves and court those audiences. Nothing wrong with that in itself, but when you see how that actual market is smaller, it's not worth jumping into the ring to fight for a share of a shrinking pie.

So they went another way with their console, and it sucked for lots of other reasons. I bet if they took a different approach, a third approach to the console, they could have fared slightly better. It's good that they are trying to branch out into other industries, whether it works remains to be seen.

Services are very important now for everyone. Consolidation isn't just in gaming. Hell, Comcast just bought Time Warner. "Content" delivery is also important and that's really Valve's wheelhouse. Realizing efficiencies in NIntendo "new" gaming hardware business through a unified architecture doesn't really solve that. I really hope their answer is a more robust sales force and promotions.

Not saying they're not important. I even stated that PsNow can be great if it doesn't substitute the classic way of selling games, because I can't possibly think that would be enough to sustain development costs (the movie example is right about this: from what I gathered, movies recoup the biggest part of their budgets - by far - through cinema releases, and THEN through retail releases AND streaming services). Services must be there, but I think they can't substitute buying and selling games as normal.

About Nintendo, well, as already mentioned, they also want to make NNid their platform, spreading across all their future hardwares, and they mentioned they want to give customers ways of paying less for games (discounts for people buying more games / letting more friends play multiplayer titles), so they seem to be on a good road for that (theorically).

 

[SmokyDave]

I think it's too early to say either way with consoles. The PS4 is still selling everything they can make with territories left to conquer, and the XBone still has to launch all over the place.

Handhelds are toast though. Perhaps the next Nintendo device will sustain itself on kids and hardcore Nintendo fans, but Sony probably won't even bother trying.

 

[entremet]

Remember, people blew the Christmas loads already.

Neither console has particularly compelling killer apps either.

 

[jcm]

I think different parts of the market have different worries. Dedicated handhelds outside of Japan are pretty well fucked. I have serious doubts about even Nintendo's ability to thrive in the dedicated handheld space. The hardware sales are bad, and the software sales are worse.

On the console side, casual games and shovelware are subject to the same pressures as handhelds. I think there's still plenty of money to made in core console gaming, though. There's fewer publishers, and might make fewer games, but that's not necessarily bad for the industry.

 

[AdventureRacing]

Both consoles have actually been selling pretty damn big numbers compared to last gen and that's with the software library being absolute garbage. It's a bit early to have this discussion yet (especially based purely on NPD numbers).

Personally the console industry has been moving away from my taste anyway. PC has become my main platform and it's thriving at the moment so i'm happy. Shame about nintendo though as they have really been the company that has kept me playing consoles.

Also i assume by gaming industry you mean home consoles and handhelds. Because if you include things like PC and smartphone gaming than the industry is far bigger than ever before.

I think different parts of the market have different worries. Dedicated handhelds outside of Japan are pretty well fucked. I have serious doubts about even Nintendo's ability to thrive in the dedicated handheld space. The hardware sales are bad, and the software sales are worse.

The 3DS is just a huge failure. It's way too expensive for what it is and the software library is simply lacking. I don't think we will ever see the highs of the DS again but i think there is room for a more successful handheld than the 3DS.

 

[troushers]

Pretty sure they said they've broken even by now. It's still worrisome.

More specifically, they broke even on the cost of the original PC / 360 / PS3 version. I wonder if this is straight out dev cost, or dev + marketing (it got a major push). The definitive edition will have a lot less ground to cover to make some money, presumably.

 

[StreetsAhead]

They also had Dead Rising 3 at xbox's launch.

Whoops. I always forget that franchise exists.

 

[Freeman]

Some comparisons make little sense and make things look worse than they should.

 

[w1gglyjones]

I think different parts of the market have different worries. Dedicated handhelds outside of Japan are pretty well fucked. I have serious doubts about even Nintendo's ability to thrive in the dedicated handheld space. The hardware sales are bad, and the software sales are worse.

On the console side, casual games and shovelware are subject to the same pressures as handhelds. I think there's still plenty of money to made in core console gaming, though. There's fewer publishers, and might make fewer games, but that's not necessarily bad for the industry.

Evidence suggests its worse. Forza on XB1 launch is just one very recent example.

 

[Shig]

Divining this new gen's sales potential from current month sales is about like predicting the DS sales curve based on pre-Nintendogs/Brain Age/Mario Kart numbers.

There's no killer apps yet. If stuff like Titanfall, inFamous SS, and Destiny come out and flounder in sales, then you can start panicking.

 

[UberTag]

Can an industry sustain huge titles if only one platform is even remotely successful?

3. Would you be happy with an industry where the big budget games have almost entirely evaporated outside of a few per year, but the rest was dominated by indies? Why or why not?

The best thing that could happen to this industry would be for the bubble to burst on all of the bloated, unneeded so-called "huge titles" with mega budgets and multi-year development cycles. We don't want them. They effectively destroy developers and publishers either due to tanking... or if they're successful... forcing them into regurgitating them with recycled assets that stunt creativity. The only studios proven to be capable at developing these juggernauts and not compromising themselves in the process are Naughty Dog and Rockstar North.

Every publisher leaning on this model NEEDS to get wiped out. And if only one platform is successful, so much the better. It means only one platform is getting AAA-exclusives instead of 3 or 4. It means only one platform needs to be optimized for the big third-party AAA titles instead of 3 or 4. And it forces publishers and developers to entertain the idea of smaller titles with quicker development cycles, smaller teams, fresh ideas, abandoning the "everything must be $60 at launch price model" and adopting the approach that indie devs have embraced. Not trying to be the next Call of Duty in a market full of aspiring Call of Duties.

 

[quetz67]

Xbox One is not giving Microsoft investors any reason to keep in the console business. It's not Wii U bad but then again Nintendo isn't considering dropping gaming any time soon.

Fully agree. Microsoft will sure go into panic mode, which might help sales but not the investor problem.

PS4 hardware sales look solid but the software sales aren't impressive either. We all know what's happening with Nintendo.

Too early to tell with demand higher than supply. I am sure they produced another million in January but a third of that was probably reserved for Japan (and is already covered by preorders I assume).

Overall, to predict a decline in console sales from last gens seems to be highly questionable with the data we have. My prediction with todays numbers is a PS2/Xbox/GC scenario.

 

[Pureauthor]

The best case scenario for the dedicated games hardware industry is the recreation of the PS2 era.

The problem is that there are a lot more things eating away at a consumer's desire to purchase a PS4 than a PS2, and even if Sony could recreate the old wildfire sales, dev costs have already exploded way beyond the PS2 era.

It's gonna be bleak.

 

[w1gglyjones]

Divining this new gen's sales potential from current month sales is about like predicting the DS sales curve based on pre-Nintendogs/Brain Age/Mario Kart numbers.

There's no killer apps yet. If stuff like Titanfall, inFamous SS, and Destiny come out and flounder in sales, then you can start panicking.

It's 100% true. But it still doesn't look like the gameplay of announced and upcoming titles will really be that much improved over last gens. But yeah, it's still true that some compelling games are needed.

 

[McHuj]

I think it's too early to tell with regards to next gen especially with PS4. I don't think they're numbers are bad given that stock didn't seem to start showing up until late January. We'll know more in a couple of months. But they're still probably way ahead of their own projections for sales.


X1 is in trouble, but the brand is strong enough that MS can turn it around if they act quickly. 499 is too much to pay.


I don't think anyone should be surprised by sales of PS3 and 360 given their price, point in life, and next-gen replacements being out.


I've always wondered how many unique console owners there are. If you take out consoles bought for replacement (I owned two 360's) and multi-console owners (360 & PS3 or multiple of the same in one house hold), I bet that number would be a lot closer to 100M than ~160M and I think that's the market that's needed to sustain core AAA games.


If PS4 goes on to sell 100M consoles, between it and PC, I think it, will be able to sustain AAA games just fine.

 

[jcm]

Evidence suggests its worse. Forza on XB1 launch is just one very recent example.

I don't understand. What is Forza an example of?

 

[troushers]

I was simply stating that if companies thought the PS3+360+PC market was viable, they should still consider the PS4+XBO+PC market as a similar opportunity. There isn't anything in the numbers that indicates to me that PS4 and XBO are markedly weaker than their predecessors in selling potential.

I think the point is though they have to be markedly more successful if similar sorts of games is going to demand ?20-30% higher budget this time around.

 

[w1gglyjones]

I don't understand. What is Forza an example of?

You said the publisher/developer consolidation isn't necessarily worse for the industry. I disagree.

 

[Opiate]

There's no question it is consolidating and has consolidated. People keep saying it is too early to tell, but it really isn't. Look at the carnage in the development sphere. Look at the contraction of publishers. Hell, look at a release calendar. This is not an expanding industry.

Except for our friends in the indie sphere. God bless 'em.

And mobile and social spheres. Most of the contraction is occurring the console/handheld space.

 

[Naminator]

1. Is this a true sign of things to come, or are we still too early to tell? Is this chicken little nonsense, or should we start getting prepared for how to salvage what's left?

2. What potential ideas could change this industry's trajectory? Some new form of social gaming? Some console/handheld hybrid? VR? What do you believe can capture people's imaginations and share with them the importance of gaming as a medium?

3. Would you be happy with an industry where the big budget games have almost entirely evaporated outside of a few per year, but the rest was dominated by indies? Why or why not?

1. I think it's way too early to tell, we just had a huge launch, bigger than ever, so of course we should see a huge drop right afterward.
I also believe that the launch would have been even bigger if there were any worthwhile games on the systems, me and my friends still don't care enough to drop 400-500$ on these consoles, there are just no worthwhile titles out.

2. Mobile gaming integrated with consoles. Lets face it, mobile while not taking over the industry(despite all armchair analyst predictions) it's still an incredibly popular thing, I and pretty much everyone I know with a few exceptions love mobile games, when you're in a car(assuming your not driving of course, otherwise WTF), when you're on a bus(assuming you're not driving of course, otherwise seriously WTF!), when you're bored, mobile games are always a great way to waste a few minutes and make the time fly a bit faster.
So integrating the mobile devices in to the consoles would be amazing, of course the integration should go beyond just simply having the ability to send a message on your console through a phone, but things like video games moving all the annoying mini games, like ME2 resource gathering to the mobile side, while reaping the benefits of those resources when you're back home on your console.

3. No I would not be happy with just a few select big titles every year while the rest are indie games, because that just scream of an industry dominated by the Free2Play model, while all the big titles are nothing sequels, or carbon copies of other big titles.
If the budget are the issue then people at these big publishing corporations need to step up and find a way to optimize their budget, and if they are so greedy and stupid that they will keep on trying to copy CoD and it's commercial success, despite failing at it over and over again, then they deserve to fail, and I'll actually be glad to see them go.

 

[Kimawolf]

Well it's as I said in all my threads on the subject. The Wii U is not the huge failure it is squarely because of Nintendo, it's a combination of factors that are affecting the entire industry, all you see is with the PS4 and to a lesser extent the XB1 more hardcore gamers gathering around them vs the Wii, U. The ENTIRE casual market left the "core" gaming eco-system, plus there has obviously been some contraction in core gamers who've either switched to mobile, still can't afford the jump, are happy with the current systems, got bored with gaming in its current state, or simply don't wish to buy into Next gen because they feel it wasn't a big enough leap to justify the leap.

The major contraction is happening and this NPD proved it. Now you have one console doing okay, another one doing sub par and the third one cratering. Where will these 3rd parties sell all these 400 man team, 60 million dollar and up games now if there's only one viable eco-system and even THAT one isn't exactly setting the world on fire in selling games?Even if the PS4 sells 100 million untis, what does it matter if Xbone only sells 50 million and Wii U only sells 15 or 10? WE will see far more companies go under, and see the complete lack of risk taking on publishers parts going forward because the ROI as people love to point out simply won't be there.

 

[Taurus]

The 3DS is just a huge failure. It's way too expensive for what it is and the software library is simply lacking. I don't think we will ever see the highs of the DS again but i think there is room for a more successful handheld than the 3DS.

Wow. Just wow. What is the Vita then?

In my opinion I see the 3DS as a healthy product with profit on the hardware as well as software which should be the norm instead of loss-leader tactics to make a healthy industry. Of course the product itself could be better like with better account system and no region loc, but other than that it's a great system.

 

[rjc571]

I'm not too confident in the PS4's sales remaining healthy after the initial launch hype dies down. I mean, look at its upcoming release schedule:

Upcoming games for the PS4:

Feb:
Thief
Rayman Legends

March:
inFAMOUS: Second Son
Putty Squad
Dynasty Warriors 8
Metal Gear Solid V: Ground Zeroes

April:
Final Fantasy XIV: A REALM REBORN

May:
MLB 14: The show

Besides Infamous, it's nothing but cross-gen titles and late ports. Hardly the type of stuff that'll convince people to drop $400 on a new system.

 

[sflufan]

The glorious, eternal PC stands ready to save gaming's bacon.

Again.

 

[w1gglyjones]

Well it's as I said in all my threads on the subject. The Wii U is not the huge failure it is squarely because of Nintendo, it's a combination of factors that are affecting the entire industry, all you see is with the PS4 and to a lesser extent the XB1 more hardcore gamers gathering around them vs the Wii, U..

Nintendo did A LOT of stupid things with their latest console. There's little point focusing on the secondary causes (market conditions) when it comes to Wii U.

 

[Opiate]

The best case scenario for the dedicated games hardware industry is the recreation of the PS2 era.

The problem is that there are a lot more things eating away at a consumer's desire to purchase a PS4 than a PS2, and even if Sony could recreate the old wildfire sales, dev costs have already exploded way beyond the PS2 era.

It's gonna be bleak.

Yes, it's the costs here that are really the problem. For those who aren't economically minded, this can be put very simply: a PS2-sized generation may not sound too bad for you. But now imagine that we have an audience the size of the PS2 gen but with 4x the development costs.

 

[Oppo]

I have a really difficult time thinking "the industry is contracting overall" so soon after GTA V sold umpty bazillion copies, and watching the XB1 and PS4 launch on pure hype alone, shattering their previous records with meagre launch lineups.

Clash of Clans, Puzzle & Dragon etc are huge flashes in the pan, the new Guitar Heros or Wii Sports. These too shall pass.

The glorious, eternal PC stands ready to save gaming's bacon.

Again.

As if it needed it.

 

[goonergaz]

I'm not too confident in the PS4's sales remaining healthy after the initial launch hype dies down. I mean, look at its upcoming release schedule:



Besides Infamous, it's nothing but cross-gen titles and late ports. Hardly the type of stuff that'll convince people to drop $400 on a new system.

you mean rubbish selling cross-game titles like CoD/GTA/MGS - oh ok

 

[Delusibeta]

Honestly? Probably too early to declare doom, we really should have to wait and see how the second wave of big games for the new gen (Titanfall, Infamous SS, Drive Club etc) do. That said, previous gen is dead and the generational transition (outside of Japan) will probably be surprisingly quick.

[Edit] That said, if it does turn out that the cry of doom is accurate, do not despair because the Vita demonstrates that yes, you can still make a decent profit making and marketing video games for a format that sells zero units.

 

[SmokyDave]

Wow. Just wow. What is the Vita then?

A target for knee-jerk reactions.

In my opinion I see the 3DS as a healthy product with profit on the hardware as well as software which should be the norm instead of loss-leader tactics to make a healthy industry. Of course the product itself could be better like with better account system and no region loc, but other than that it's a great system.

The 3DS ain't healthy. Did you totally gloss over the figures in the OP? Software would look even worse.

 

[Petrae]

The 3DS is just a huge failure. It's way too expensive for what it is and the software library is simply lacking. I don't think we will ever see the highs of the DS again but i think there is room for a more successful handheld than the 3DS.

Oh, my.

I agree that handhelds will never see a juggernaut like the NDS family was, but I can't agree with your assessment of 3DS being a huge failure. It's managed to do okay despite an exploding mobile gaming sector and periods of software drought. Could it be selling better? Sure. That doesn't make it a failure.

Vita, on the other hand? That's a better argument for being a failure. Two years after release, and still very few want one. It's battling perception problems (too expensive), storage woes (bigger, cheaper memory cards needed), and a lack of software balance (indie machine, few prominent/recognizable titles).

 

[Plinko]

I'm not too confident in the PS4's sales remaining healthy after the initial launch hype dies down. I mean, look at its upcoming release schedule:



Besides Infamous, it's nothing but cross-gen titles and late ports. Hardly the type of stuff that'll convince people to drop $400 on a new system.

This is what I've been saying for months. The release schedule looks too soft to sustain the system.

That said, with the market seemingly turning toward Sony, I think they'll be fine in the long run (although I don't think we'll see Wii-like numbers). Microsoft is the one I'm worried about. I really think the market is contracting to the point where people are going to be going PC + 1 system.

 

[goonergaz]

I have a really difficult time thinking "the industry is contracting overall" so soon after GTA V sold empty bazillion copies, and watching the XB1 and PS4 launch on pure hype alone, shattering their previous records with meagre launch lineups.

I don't doubt the XBO+PS4+WiiU sales will not reach last gens, but I can see PS4+XBO totalling more than PS3+X360

 

[badgenome]

Handhelds are toast though. Perhaps the next Nintendo device will sustain itself on kids and hardcore Nintendo fans, but Sony probably won't even bother trying.

Some would say Sony didn't even bother trying this time around. :-(

 

[Lunar15]

While I'm bearish on the industry as a whole, I will say that Jan's numbers are not enough to make a solid conclusion on. I think once games start coming out for the new consoles, it will pick up.

That said, it's pretty clear that we're just going to see less console games in general this generation. The risk/cost is way too high right now.

 

[Simzyy]

I'm super curious to see the numbers for March. If Titanfall & Infamous don't cause big spikes then we are going to see some depressing numbers until at least September. This time next year we will have a very good idea about the health of the industry.

 

[Delusibeta]

Also, a prediction: the proportion of indie game to AAA game as exhibited on the Vita will be similar to the proportion of indie:AAA the PS4 will get, and the Xbone will wind up being the butt of the no gaems jokes. The Vita is a glimpse into the future of hardcore gaming.

 

[teruterubozu]

The last generation lasted 8-9 years. Not even a blip on the radar yet.

 

[Plinko]

I have a really difficult time thinking "the industry is contracting overall" so soon after GTA V sold empty bazillion copies, and watching the XB1 and PS4 launch on pure hype alone, shattering their previous records with meagre launch lineups.

Clash of Clans, Puzzle & Dragon etc are huge flashes in the pan, the new Guitar Heros or Wii Sports. These too shall pass.



As if it needed it.

Because casuals drove last-gen. Wii sales were gigantic and it appears most of the people that Wii drew into the market have left already. Unless somebody does something to draw them back from iOS, a contraction of the market is inevitable.

Handhelds are toast though. Perhaps the next Nintendo device will sustain itself on kids and hardcore Nintendo fans, but Sony probably won't even bother trying.

I'm fairly confident that the Vita is Sony's last dedicated handheld. They're not even trying.

 

[Taurus]

The 3DS ain't healthy. Did you totally gloss over the figures in the OP? Software would look even worse.

I don't have any 3DS software data, but I suppose it's bringing profit to Nintendo as well as offering devs a good platform to bring out games.

And if the LTD sales are somewhere near 40 million then, with lowered expectations and considering the changed outlook of the industry, it at least SHOULD be a healthy platform overall.

I can't see the handheld game dev costs being so high that 50 million LTD sales couldn't create a healthy ecosystem around the console.

 

[SeanR1221]

I'm also very interested in seeing what amazon pulls?

Kindle fire with a controller that docks to your tv?

 

[entremet]

The whole AAA push reminds of Ouroboros, the snake eating its tail.

 

[orioto]

Hmm i'm not sure i get the logic behind the idea that the console market is shrinking.. Isn't the PS4 having a pretty amazing start ?

I really don't see why the sum of PC/PS4/XBO would be smaller this gen. it will be bigger maybe even. Just, the ratio won't be the same, that's all.

Worrying cause the first year will be rough in term of software ? Crossgen ports ? Hm wasn't it even worse last gen ? This gen has no reason to be at lower global for the same period of time. Hell, it should even go faster based on PS4 sales and its price (compared to PS3), as people will probably wait less to buy one.

 

[AHA-Lambda]

we're going to be in for some rough times ahead, last gen has contracted faster than anticipated and alot of people aren't out for a $400/500 machine.

but no reason to think yet that the industry is,doomed.

 

[kaiyo]

Yes, it's the costs here that are really the problem. For those who aren't economically minded, this can be put very simply: a PS2-sized generation may not sound too bad for you. But now imagine that we have an audience the size of the PS2 gen but with 4x the development costs.

The development should go down from last gen though.

 

[Taurus]

Hmm i'm not sure i get the logic behind the idea that the console market is shrinking.. Isn't the PS4 having a pretty amazing start ?

I really don't see why the sum of PC/PS4/XBO would be smaller this gen. it will be bigger maybe even. Just, the ratio won't be the same, that's all.

Worrying cause the first year will be rough in term of software ? Crossgen ports ? Hm wasn't it even worse last gen ? This gen has no reason to be at lower global for the same period of time. Hell, it should even go faster based on PS4 sales and its price (compared to PS3), as people will probably wait less to buy one.

Did you even read the OP? Last gen vs current gen comparison is there.

 

[EventHorizon]

Dev costs rising and dev time being longer is a huge problem. You can't compare 2001 to 2014.

Single succesful console can't keep the industry afloat.

Umm...A single successful console reduces dev costs. This whole line of thought seems to miss the obvious. If the XB1 did tank, then a large percent of the people who would have bought an XB1 would get a PS4 instead.

 

[LegendofLex]

We won't know anything for sure about this generation until we see how Xbox One fares in comparison to Xbox 360 on a multi-month basis (it is off to a bad start), and whether PS4 ever is able to top 400k/month in the U.S. (Wii's average from Jan-Oct in Year 1 on the market) once it is in more plentiful supply.

PS4 supply being distributed all over the place masks its real popularity, unfortunately. Unless we see the sales numbers go up and up and up (Wii's average climbed to more like 600k in Year 2 and continued to sell out until March 2009), it's safe to say the entire gen is probably going to be severely impacted compared to last-gen in the long term.

 

[njean777]

Look at Tomb Raider. It needed 5 million copies sold to break even ie. cover the costs of developing it. The game was well recieved, it was released on everything not made by Nintendo, and it was still a financial failure. Square Enix are doubling down - hoping a follow up will have better success. But it will cost more to develop for PS4 / one, and they will have a smaller install base when it launches. What makes you think it is still a viable path?

People keep bringing tomb raider up as an example, problem is I can point to Dark Souls which sold around 1.8 million and was hugely successful. Not the consumers problem that square doesn't know how to budget accordingly. The budgets for these games need to go down, and we have seen it is easily doable, problem is that the publishers are not paying attention, and think that spending a huge amount of money on marketing will save them.

 

[Hades Hotgun]

One dominant console is better for the industry and the market. A divided user base was a major factor in the increased costs of game production last generation.

During the PS2 era a game could be released for one system and enjoy healthy sales in all market regions.

The only thing in trouble is the absurd notion of AAA games, which are fundamentally unsound business propositions in the longterm. This could cause some badly run companies to suffer, but that is ultimately a good thing as far as I can see.