NV55
2008-11-15 16:23:38 UTC
http://www.edge-online.com/features/online-execs-talk-death-consoles
Online Execs Talk Death of Consoles
The traditional videogame console format came under attack during a
panel discussion at BMO Capital Markets' Interactive Entertainment
Conference in New York on Thursday.
Alex St. John, the WildTangent chairman who's made no secret about his
stance on the current console model, hammered home his opinion that
the console platform is doomed.
"I think you're looking at the last generation of consoles. I don't
think Sony or Microsoft is going to make another console. The problem
is that great graphics, which is what used to differentiate a console,
are a commodity. Everybody's got it. You can't buy a PC that doesn't
have Xbox or Nintendo-quality graphics anymore."
He noted how World of Warcraft, a PC-only MMO, made more revenue than
all Xbox 360 software combined in 2007.
Hilmar Pétursson, CEO of EVE Online developer CCP chimed in, "Really
the only value proposition of the console was the lack of piracy on
the console versus the PC." But he claimed console gaming is losing
that feather in its cap, noting how online PC gaming is much more
piracy-resistant than packaged gaming.
Both St. John and Pétursson's businesses are PC-centric, so their
slant away from console gaming may be expected. But Lars Buttler, CEO
of online PC and console developer/publisher Trion World Networks also
noted pitfalls of the console gaming business.
"You also have these huge markets in Asia, Eastern Europe and
everywhere else that really don't give a damn about consoles. They're
all PC online," he said. "Once you run your big games completely
server-side there is really not much need for any specific box [such
as a console]."
He didn't downplay consumers' desire to play a game in a living room
setting, but suggested that gaming technology will become so
commonplace, dedicated gaming consoles as we know them will become a
thing of the past.
"The console is as great of an input/output and rendering device as
the PC, and if somebody prefers to play a server-based game on the
console, we should absolutely let them do it. So it's actually not
either/or. But the 'consoles,' the 'PCs,' those things that used to be
called 'platforms' will be reduced to input/output and rendering
'devices.'
"The real platform is powerful servers and broadband."
Ken Ripley, EVP of sales for in-game ad firm IGA Worldwide came to
consoles' defense, saying the current platforms are centered around
consumers more interested in a general entertainment experience rather
than core gaming.
"If we think about what's already in peoples' homes, which are 40-,
50-, 60-inch HD televisions centered around a stereo receiver with
Dolby 5.1 digital sound, and maybe one of those theater chairs, people
want to spend time in front of that kind of entertainment
experience. ... As far as entertainment is concerned, there isn't too
much more entertaining on that kind of home theater setup than playing
a console game."
St. John fired back, saying, "The illusion or the notion of the TV as
some sort of religious experience is false... Most console gamers or
kids play on their own TV sets in their own bedrooms ... Screens are
no longer an extraordinarily rare or scarce thing that you can only
find in the living room."
Microsoft, Sony and Nintendo have made console connectivity more than
just a bullet point this generation. But any PC on the market today
comes with the hardware and the assumption that a consumer will
connect it to a network. Consoles are still a long way off from PC-
like broadband penetration, and many in the industry see a high rate
of connectivity as essential for future business models.
"Only 15 percent of the next-generation consoles ever sold will ever
be connected to a network ... The vast majority of consoles will never
be plugged into broadband by 2012," St. John said, citing a report
from IDC.
"If you believe that the next business model for gaming is online
models, the MMOs and the advertising, you also believe that you're not
going to see a console business going forward," argued St. John,
"because it can't compete. It doesn't make sense in a community-based
gaming world."
However, Buttler said that there's a reason that most console gamers
don't connect: they simply don't have a reason to.
"What reason do you have today to really connect your console? There
are no large scale, massively-multiplayer persistent, dynamic content
applications on the console today," he said.
IGA's Ripley strongly disagreed with the notion: "Why would somebody
connect?" he asked rhetorically. "You've got a Trojan Horse in the
living room now. You've got a digital device with a huge amount of
memory and a lot of processing power that as we speak, can download HD
movies, rent them, purchase games from them, download additional songs
for Guitar Hero or Rock Band straight into your game. So there's all
kinds of advantages and great attributes for why you would want to be
connected right now, and I'll emphasize right now."
But St. John was unmoved. "I don't think that the economics for the
console business as we know it works viably anymore. I think you're
probably not going to see Sony or Microsoft eager to make any
announcements about launching another generation in the next few
years..."
Online Execs Talk Death of Consoles
The traditional videogame console format came under attack during a
panel discussion at BMO Capital Markets' Interactive Entertainment
Conference in New York on Thursday.
Alex St. John, the WildTangent chairman who's made no secret about his
stance on the current console model, hammered home his opinion that
the console platform is doomed.
"I think you're looking at the last generation of consoles. I don't
think Sony or Microsoft is going to make another console. The problem
is that great graphics, which is what used to differentiate a console,
are a commodity. Everybody's got it. You can't buy a PC that doesn't
have Xbox or Nintendo-quality graphics anymore."
He noted how World of Warcraft, a PC-only MMO, made more revenue than
all Xbox 360 software combined in 2007.
Hilmar Pétursson, CEO of EVE Online developer CCP chimed in, "Really
the only value proposition of the console was the lack of piracy on
the console versus the PC." But he claimed console gaming is losing
that feather in its cap, noting how online PC gaming is much more
piracy-resistant than packaged gaming.
Both St. John and Pétursson's businesses are PC-centric, so their
slant away from console gaming may be expected. But Lars Buttler, CEO
of online PC and console developer/publisher Trion World Networks also
noted pitfalls of the console gaming business.
"You also have these huge markets in Asia, Eastern Europe and
everywhere else that really don't give a damn about consoles. They're
all PC online," he said. "Once you run your big games completely
server-side there is really not much need for any specific box [such
as a console]."
He didn't downplay consumers' desire to play a game in a living room
setting, but suggested that gaming technology will become so
commonplace, dedicated gaming consoles as we know them will become a
thing of the past.
"The console is as great of an input/output and rendering device as
the PC, and if somebody prefers to play a server-based game on the
console, we should absolutely let them do it. So it's actually not
either/or. But the 'consoles,' the 'PCs,' those things that used to be
called 'platforms' will be reduced to input/output and rendering
'devices.'
"The real platform is powerful servers and broadband."
Ken Ripley, EVP of sales for in-game ad firm IGA Worldwide came to
consoles' defense, saying the current platforms are centered around
consumers more interested in a general entertainment experience rather
than core gaming.
"If we think about what's already in peoples' homes, which are 40-,
50-, 60-inch HD televisions centered around a stereo receiver with
Dolby 5.1 digital sound, and maybe one of those theater chairs, people
want to spend time in front of that kind of entertainment
experience. ... As far as entertainment is concerned, there isn't too
much more entertaining on that kind of home theater setup than playing
a console game."
St. John fired back, saying, "The illusion or the notion of the TV as
some sort of religious experience is false... Most console gamers or
kids play on their own TV sets in their own bedrooms ... Screens are
no longer an extraordinarily rare or scarce thing that you can only
find in the living room."
Microsoft, Sony and Nintendo have made console connectivity more than
just a bullet point this generation. But any PC on the market today
comes with the hardware and the assumption that a consumer will
connect it to a network. Consoles are still a long way off from PC-
like broadband penetration, and many in the industry see a high rate
of connectivity as essential for future business models.
"Only 15 percent of the next-generation consoles ever sold will ever
be connected to a network ... The vast majority of consoles will never
be plugged into broadband by 2012," St. John said, citing a report
from IDC.
"If you believe that the next business model for gaming is online
models, the MMOs and the advertising, you also believe that you're not
going to see a console business going forward," argued St. John,
"because it can't compete. It doesn't make sense in a community-based
gaming world."
However, Buttler said that there's a reason that most console gamers
don't connect: they simply don't have a reason to.
"What reason do you have today to really connect your console? There
are no large scale, massively-multiplayer persistent, dynamic content
applications on the console today," he said.
IGA's Ripley strongly disagreed with the notion: "Why would somebody
connect?" he asked rhetorically. "You've got a Trojan Horse in the
living room now. You've got a digital device with a huge amount of
memory and a lot of processing power that as we speak, can download HD
movies, rent them, purchase games from them, download additional songs
for Guitar Hero or Rock Band straight into your game. So there's all
kinds of advantages and great attributes for why you would want to be
connected right now, and I'll emphasize right now."
But St. John was unmoved. "I don't think that the economics for the
console business as we know it works viably anymore. I think you're
probably not going to see Sony or Microsoft eager to make any
announcements about launching another generation in the next few
years..."