It’s a tough time to be a hard-core gamer. Veterans of the gaming industry are declaring that we are in the midst of the death of “console gaming” itself—i.e. the end of those set-top boxes made by Sony, Microsoft and Nintendo that have long been the staples of video gaming. Sales of video games have been in a tailspin for the past four years, and in April sales of both software and consoles were down 25% from a year earlier.
So when Sony today launches a “price war“ by announcing that its next-generation PlayStation 4 will retail for $399, $100 less than Microsoft’s next-generation console, the Xbox One, it’s hard to see it as anything other than a retreat by the industry, designed to lure people back to consoles by making them cheaper.
What’s killing consoles? As with the PC, it appears to be mobile devices. Arguably, hard-core gamers who demand bigger, better, faster everything in their consoles have always been subsidized by a large number of people who bought video game consoles but weren’t as obsessed with their being the latest and greatest. (Hence the success of Nintendo’s Wii, which had significantly worse graphics than competitors but, with its motion controller, was far more accessible to the unwashed masses of non-hardcore gamers.)
These days, free-to-play and free-to-try casual games—the sort that dominate mobile apps stores—are competing with consoles for the free time of people who don’t have 60 hours and as many dollars to devote to the latest console game.
In addition, the sheer power of new consoles means that video game development costs are through the roof. That could be one reason why many industry critics think that console games just aren’t that creative, any longer: Who can afford to take creative risks on games that cost, on average, $20 million to develop? With the smaller teams required to create lightweight mobile games, on the other hand, developers of mobile titles are free to try new things and cater to niche interests.
Despite the sturm und drang coming out of the video gaming press, it’s possible that cheaper console alternatives that double as set-top boxes (for streaming video from services like Netflix and Hulu) could revive this industry. But they’re not made by heavies like Microsoft and Sony. Instead, projects that use the free, open-source operating system in Google’s phones—Android—could be disruptive. One, the Ouya, launched on Kickstarter, costs just $99, though reviews suggest it has a way to go before it’s all that compelling. The other, the Steam Box from Valve, which already hosts Steam, the world’s largest service for downloading games, is the dark horse in the battle with Sony and Microsoft.