Is The Fat Lady About To Sing For The Games Console?

Is The Fat Lady About To Sing For The Games Console?

After 50 years of often bloody competition between the makers of computer gaming consoles, the latest technology in the world of cloud computing means the end could soon be nigh for one of the most prized of wrapped boxes under the Christmas tree. From the earliest days of Atari’s consoles that played what now seem hugely primitive games on cartridges through to the Sega Master System and Nintendo NES and today’s duopoly of the Xbox and PlayStation, games consoles have been a fixture of home entertainment for decades now. But the writing could now be on the wall. Will this be one of the last Christmases that kids will delight in connecting to the TV that slickly designed plastic box they’ve been dreaming of for months?

Gaming as an industry is far from dying. Rather, the value of the industry is growing at a breakneck pace. Strong double digit growth every year, a rate expected to persist over the next decade. The global value of the gaming industry is expected to come in at just under $140 billion in 2018. But the face of the industry is changing with technology. Mobile gaming is expected to, this year, account for more than 50% of the sector’s value, at 51%. That trend is expected to continue for at least several more years as smartphones become ever more powerful and able to run more sophisticated games.

For decades the console battle has been between rival brands. Now it’s Microsoft with its Xbox and Sony’s PlayStation, which share the spoils. The console sector is still worth around $35 billion globally, 25% of the gaming industry, and with reasonable growth of just under 4.5% in 2018. There have historically been 2 major consoles competing for market share at any given moment.

That seems to be the natural balance and any time a new player has entered the market they have either failed to gain a solid foothold and retreated or displaced one of the incumbent 2 gamer mainstays. Sega and Nintendo became Microsoft and Sony. There has occasionally been room for a 3rd console, such as Nintendo’s Wii and its current handheld/home console hybrid Switch. But not on quite the same level as the main two. Many brands hugely successful in other areas of consumer electronics, Apple being the prime example, have tried and failed to crack the console market.

But over the next few years 2 could well become none. Despite the fact the PlayStation has said it is working on a successor to the PlayStation 4 that could be launched before 2020, cloud gaming looks set to disrupt the industry. Cloud technology will mean the computing power traditionally encased within the console will instead happen on the cloud. There will be no need for a physical device, just a high speed internet connection.

That development will spell the end for the console’s business model, where games are made to run on the particular console. Instead, the model is expected to move to one similar to streaming. Games publishers won’t need a console hardware middleman anymore. Or, at least, a different kind of middleman. Who would bet against Netflix, Amazon Prime or Apple TV already planning the launch of streaming-based gaming.

However, there may still be a few years left for consoles. The heaviest games of the present generation would need reliable 5G for cloud-powered streaming to be viable. It’s difficult to tell exactly when that will be a reality.

It will be soon but just how soon is open to debate. But the ‘Fat Lady’ is certainly starting to warm up her vocal chords to sing the last song for the games consoles most of us grew up with and made our Christmases if we were lucky enough to find one with our name on it under the tree.

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