Game Over for Consoles

Matt Barton's picture

Okay, probable flame bait here, but Peter Vesterbacka (marketing lead for Angry Birds) is claiming that the glorious days of console gaming are over. His argument? For one, as we all know, innovation isn't coming from the big companies these days (the ones who target consoles), but rather indies (ahem, Angry Birds). Secondly, there's a huge cost difference ($60 console game; $.99 Angry Birds). He also thinks that tablets pose a real threat to consoles. The main claim there is that "four generations of new tablets come before a new console." These comments followed a session by Satoru Iwata (Nintendo CEO) who wonders if the rush of mobile and social games might destroy the industry, making it impossible to earn a living as a developer.

What do you think? Are the days of the big three coming to a close?

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davyK
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Some amusing comments made by

Some amusing comments made by that so-called expert. Nintendo tried online content back in the early nineties with the Satellaview. You can't really say they have little experience in the area and you can be sure they have a pretty good understanding of it. They are very wary of the whole idea of free or cheap content as the quality has to take dive which levels the playing field making it hard for them to differentiate.

I think they would be pretty good at devising small scale quality content (some would say that's what a lot of their existing stuff is like anyhow). I still think the industry is so in love with the idea of online content that the quality is taking a back seat but hopefully that will pass when there is a bit of maturity and everyone looks back on this era with bit of embarrassment.

Using iTunes to draw parallels isn't a particularly good idea - there are too many differences between the industries to make that completely valid - though I guess there are lessons to be learned.

I am baffled at Nintendo's failure to release arcade Donkey Kong on their VC - are they afraid of someone stealing the ROM?

Touch screens are nice for certain game types but they are no replacement for a well made controller.

Nous
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from first to last
davyK wrote:

Some amusing comments made by that so-called expert. Nintendo tried online content back in the early nineties with the Satellaview. You can't really say they have little experience in the area and you can be sure they have a pretty good understanding of it. They are very wary of the whole idea of free or cheap content as the quality has to take dive which levels the playing field making it hard for them to differentiate.

I think they would be pretty good at devising small scale quality content (some would say that's what a lot of their existing stuff is like anyhow). I still think the industry is so in love with the idea of online content that the quality is taking a back seat but hopefully that will pass when there is a bit of maturity and everyone looks back on this era with bit of embarrassment.

Using iTunes to draw parallels isn't a particularly good idea - there are too many differences between the industries to make that completely valid - though I guess there are lessons to be learned.

I am baffled at Nintendo's failure to release arcade Donkey Kong on their VC - are they afraid of someone stealing the ROM?

Touch screens are nice for certain game types but they are no replacement for a well made controller.

Right, RANT TIME :-)

Touch screens (high quality, fine-tuned capacitive ones) with a touch of gyro+6axis controls are exactly what the vast majority of the "expanding casual gaming audience" wants. The traditional controller type of gaming audience has NOT expanded in the past 7 years, and that's a big part of Nintendo's success during that period.

What is happening now to Nintendo is what happened to Sony back then - cheaper, less "hardcore", direct-interaction (using a touch screen or a wiimote to directly point at the object instead of indirectly/abstractly control it via d-pads and analog sticks) types of twitch gaming comprehensively beat the "old(er) skool" kinds of long, console-like, time consuming (and effort demanding) games. The new expanding market of digital content and online gaming at affordable prices is to Nintendo's business what the DS was to Sony's approach 6 years ago - or, to put it simply, iOS is to the 3DS as the DS was to the PSP back then.

The problem with online content and Nintendo isn't so much lack of ability to execute (although do not underestimate the skill and design effort that goes into it, if you want to get it right that is) - it's the nature of the content and the emerging shape of competition in that market combined with the fact that Nintendo's whole existence relies on selling their product at a MUCH higher price than what open, healthy competition would lead to.

Remember the whole "compete without competing" thing? When you're the only fish in a virgin, casual pond, with no other fish around to compete with, you can do whatever you like, for a while, because you are by definition the biggest fish in the pond. When BIG competition comes along and claims pretty much most of your casual audience with both superior AND cheaper, high quality product you can't keep fighting for marketshare without compromising your margins in order to claim only a smaller slice of the pie, at best! That's Nintendo's biggest nightmare: having to fight worthy opponents, having to necessarilly drop prices AND lose marketshare at the same time. That's why they always try to add something of a unique selling point to their products, no matter how flawed or gimmicky, then use their excellent marketing and software writing skills to avoid competing with others in order to dominate the market and milk it through "prime value" iterations and "evergreen" (aka "never drop the price") product.

But I digress. One of the issues here is that it's simply not true anymore that cheap equals low quality, as Nintendo would have you believe. There are *thousands* of high quality games on the appstore for example, and many of them are both cheaper (a LOT cheaper) and better than many games you can find on "real" consoles at 10 times the price! Real Racing 2 for $5 or Ridge Racer 3D for $40 ? There is no comparison, in terms of price, and RR2 is actually so good the 3DS would struggle to even come close to that kind of quality, partly because 3rd and 4th gen iOS devices have much superior capabilities.

That's just one example. There are many , many more. There is no reason for anyone to spend any money (even if it's only a buck) on low quality titles anymore because there are so many high quality offerings at the same price and it's really not that hard to tell them apart, even for casual users -- in fact, and this is an important point, the search + rating system probably makes it easier for casual users to generally avoid rip offs on the appstore.

It gets worse: there is a trend of titles that we've already seen on handheld consoles being ported to these convergent devices and the games are often superior while still maintaining a low price point!

The problem with "consoles" (and Nintendo's conservative "let's milk'em all until they're dry" approach) is the business model - it's archaic and manipulative, it relies on "controlling" the market rather than letting it breathe and evolve naturally. I am sure those who adapt to this fast changing situation will thrive, and that means embracing convergence, digital downloads, dynamic content and online gaming - as well as competing with each other in a much larger, much more open environment (and yes, that also means lower price points inevitably). Those who stick to their "poke'em all" guns will face increasing competition and resort to bitching and fear mongering in an attempt to keep their $40-$45 (maybe even $50?) handheld prices for as long as they possibly can - until they move onto the next unique thing (finger sensing?).

End of RANT!

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davyK
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I'm probably in a minority

I'm probably in a minority but I have little interest in playing games on a phone or an iPad. For starters they're expensive and given the short lifespan of these devices at present there's little chance for maturity. I'm also not interested in wading through the amount of content online. Thousand of quality titles? Glad to hear that given the sheer volume available. I'd rather invest in a brand I trust and play games in my living room with my family. Online cheap content is a great thing but its depressing to think it would totally replace the current way.

Creating really new content (ie. not yet another driving game or bejeweled clone) takes time and money. If the market can't reward that then it won't happen. I worry about that - never mind Nintendo. I actually like to reward dev houses with a decent amount of money for their decent level of investment and effort - not throw a few coins at something that hasn't big time and effort expended on it.

I don't think Nintendo have too much to worry about even if they have to join that model. Online content may actually solve the pre-owned game problem and Nintendo games do tend to be smaller in scope and their titles seems to have a long shelf life - though I think we could say goodbye to the likes of Mario Galaxy which would be shame - the risk is just too high in that model..... and imagine playing that game or the next Halo with a touch screen? Wise up.

Matt Barton
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I think there's a tendency in

I think there's a tendency in the games industry (and probably all industries) to overestimate the impact of "the next big thing." Hell, from what I've seen, what they usually consider to be the "next big thing" is iffy at best, and often the real NBT comes out of nowhere and is unexpected. Right now the Facebook "platform" and the iTunes store are gold rushes. A few people lucked out and struck gold; now here comes the legions of prospectors who will be sadly disappointed. Again, just like a gold rush, the only ones who will really benefit are the people selling them support and catering to their perceived needs, in this case Facebook and Apple. Of course, there is never enough gold for everyone to get rich; only a select lucky few will. Only time will tell whether the settlements that spring up during a gold rush will stay; many become ghost towns (in this case, a forgotten platform).

Saying that Nintendo, Microsoft, and Sony are doomed because these niche markets are experiencing a gold rush right now--that's foolish. All that's really going to happen is that the market will go through a very uncomfortable correction and the vast majority of developers pushing those thousands of "quality apps" will end up with nothing, then desperately try to sell their pick axes for money to buy food.

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Nous
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Niche markets?

Sorry Matt, not sure which markets you're referring to as "niche" (or at least in what sense they are "niche").

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Nous
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But why?

Aha! http://mynintendonews.com/2011/03/21/nintendo-3ds-nintendo-refuses-to-co...

Except for a tiny detail; all else being equal (same number of sales), developers can make more profit on a $9.99 iOS game than they can on a $34.99 boxed game!

Unless of course *you are* the platform owner ;-)

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Nous
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Opinion: The Mugglification Of The Gaming Market

Interesting article again: http://www.gamasutra.com/view/news/33525/Opinion_The_Mugglification_Of_T...

Facebook, motion controllers, mobile phones and minute-long game experiences tap into casual (and social) game players. Many believe that conversion of these players to bigger and better games is just a matter of education and exposure.

And so we can expand the market for games exponentially. We can take on Hollywood. By broadening the appeal of games, everyone becomes a gamer.

Not so much. Casual players have significantly responded to games targeted at them, but not to richer gaming any more than ever. They like to play games, but don’t engage with the possibilities beyond what they already expect. They still don’t seem to see games as anything other than either amusements or for ‘gamers’.

In Harry Potter terms, they are muggles. If you’re going to make games for muggles, you need to realise that you’re not in the conversion business. You’re in the satisfaction business.

We Are All Muggles

In almost every market, there are those who explore and those who don’t. Those who want to be informed, and those who don’t care. Those who avidly chase after the new thing, and those who like the old thing which they understand.

The first group are magicals: the engaged and passionate fans who devote time and interest to the market. The second group are muggles, who may be passingly familiar with the market but come with their own expectations that they aren’t motivated to change.

We are all both muggles and magicals.

As children we tend to have a curiosity about everything, but by the time we are a few years into the working world our curiosity has usually zeroed in on a few subjects. We have less time to do everything, more responsibility and more stress, and the brain grows less adept at processing new information and learning new skills.

It’s harder for an older person to pick up a new language, for example, or to learn to drive a car for the first time. However, an older person develops wisdom and insight that younger infovores lack. Experience and constant exposure or interest over long periods brings its own reward.

Most of the people reading this are passionately interested in video games but have very little to say on the subject of modern art. Many geeks are proud of their cooking, but have zero interest in fashion. You may well be an art muggle, but a sports magical, inquisitive about pottery yet indifferent to soap operas. In short, it seems that we are built to specialise rather than generalise.

We only have so much available attention span. It’s not impossible to take up a new interest, but the point is we’re less inclined to cross a chasm and really immerse ourselves in new subjects as perhaps we once might.

But we are more likely to form deep and lasting interests in the subjects we already like. So in the subjects that we do not care about, we become muggles. While in the few that we do, we embrace the magic.

Culture also plays its part. Depending on environment, some subjects are beyond our normal frame of reference. I know essentially nothing about Chinese literature, for example. Meanwhile it’s likely that an average person from Beijing knows nothing about the novels of Flann O’Brien. It’s innately harder, though not impossible, for either of us to care about something so wildly outside our frames of reference.

While cultural exposure and limitations are not fixed, they affect the lenses through which we interpret experience, and so our available choices for subjects to embrace narrows. Few are the people who are true polymaths, interested in every thing and knowledgeable on every subject, although better sources of exposure (such as the Internet) are hopefully changing that.

The Relationship

The difference between magicals and muggles could best be described as ‘open to change’ versus ‘expectant of satisfaction’.

The magical has many opinions in his chosen subject, and is keenly seeking the new and unusual. But the muggle has firm notions that categorise the subject in his mind, and if those notions are not adhered to, he is not likely to be interested. So for example, fashion magicals might love new ranges of colours and fabrics every season, but muggle jeans for men should be blue, or occasionally black, and inexpensive. Never green.

All the activity in the magical sphere does eventually manage to pull the muggles along, but at a much slower pace. While the world of fine coffee regularly reinvents and experiments, muggles are still only somewhat accepting of the idea of Starbucks.

In order to bring exciting new coffees to the muggle world, Starbucks and other chains have had to change the product significantly, making it simpler to understand by eliminating bean choices and introducing easily understood sizes and terminology. And even at that many muggles still ask for ‘just coffee, no fancy stuff’.

When something totally new and important comes along, muggles will adapt – but only to the minimum that they require. Email muggles still can’t get to grips with Gmail’s threaded views and prefer chronological views because that’s what they’re used to since the days when they had to learn the basics of email.

Mobile phone muggles still pine for the good old days of having a phone that just works, with no extras. Web muggles have no idea what a browser is, or how URLs work, and use Google for navigation rather than searching. Cable television muggles never explore beyond the first 30 channels on their electronic programming guides.

It’s not about intelligence by the way. Remembering that we are all muggles in our own way, that means that this applies to how most of us live our lives most of the time. A muggle is simply interested in other subjects, and has no inclination to care about the subjects that a magical cares about.

Here are some specific differences:

Magicals are tribal. Within any market, there are always tribal tendencies, clans or schools of thought that endlessly sub-divide the magicals. Soccer fans in the United Kingdom separate their loyalties among dozens of teams, and have ancestral rivalries that extend through generations. Tribes are at the heart of marketing stories, and building tribes is the secret to success in single franchise publishing.

Muggles are monocultural. Muggles are not tribal. They have pre-conceived notions of what is good and bad, and they stick to that en masse. Soccer muggles are only vaguely aware of what's happening with the big name teams in the Premiership, not at all interested below that, but most will tend to rally around when England are playing in the World Cup.

Magicals love surprise. Magicals are consumed with the new. They engage with changes even if (sometimes especially if) they passionately disagree with a particular change. Magicals renew their interest with new ideas that confound previous expectations, and redefine their persona in relation to new surprises. Art fans have a highly intellectualised and subtle understanding of art, and its themes breed fascinating schools of debate, conflict, community and animosity.

Muggles prefer confirmation. Muggles have fixed and un-subtle views of what they like or don't. This means muggles often prejudge what they see before considering its merits. Art muggles are mystified as to why a pile of bricks, a light switch or a urinal might be worthy of the Turner prize. They have a defined sense that art means paintings and statues, that art's job is largely decorative and that modern art is actually a giant con.

Magicals are informed. Magicals follow the buzz, keeping tabs on new releases, ideas, interesting people and other developments. They like to keep abreast. Wine is strongly driven by the calendar. Wine fans obsess over new vintages, old vintages, knowing what’s a good year or not. They want to know the skinny, what Wine Library is talking about this week, what’s worth buying or not worth their attention.

Muggles do not pay attention. Muggles are guided by convention rather than buzz. When news crosses from a magical world into the muggle world, it tends to be about how that news will affect muggles rather than the subject itself. (Violent video game controversies are an eminent example of this.) Wine muggles tend to think of wine as a red or white accompaniment to meat or fish. They assess quality of wine largely on price, and often only buy it for special occasions like Christmas or Valentine’s Day.

Magicals love change. Magicals want to know, experience and stay endlessly engaged. Their passion to learn is all about embracing new perspectives and redefining themselves in new ways. Early-adopters frequently research their technology purchases to make sure that the kit that they are going to buy is the best. They want power use, new features, great user experience and delight at personal discovery. They love it when when their preconceptions are inverted and their reality is re-aligned.

Muggles find change annoying. Muggles are often sold on simplicity rather than complexity. They prefer when a product does something that they already know how to do in a way that they already understand. What geek doesn’t have a mother that still doesn't understand file management on a PC, knows no keyboard shortcuts in MS Word and still uses font settings and emboldening to manually lay out headers rather than learn how to use Styles? What these muggles need is a word processor that does what they expect rather that tries to change how they think.

Magicals are spenders. Young magicals are often pirates, but as they grow older they spend to support their favourite creators, establish prestige, build a collection or sample a rare and prized experience. The fashion houses of Paris and Milan can charge a thousand dollars for shoes because they are selling to motivated women who care about shoes as a statement of identity. Shoe enthusiasts are passionate about individual designers, ranges and upcoming collections and will actively seek out and pay a premium for the experience.

Muggles are cheap. Muggles always have their eye for what is a good deal, but are also less inclined to piracy because of the technical hurdles. Their tastes tend toward finding the optimum solution at the best price, so while they may not buy the absolutely cheapest version, value for money is always a factor in their decision-making. A shoe muggle buying high heels will never spend more than $150, preferring a sensibly priced approximation of a designer shoe to a $700 pair of Manolo Blahniks.

The Muggle Divide

In her novels, JK Rowling shows that wizards regard muggles as ignorant, but through the lens of Harry Potter's eyes we see that the wizards are just as ignorant of the muggles as the muggles are of them. Neither world understands the other, and in some ways neither world is that aware that the other exists.

When the Times Literary Supplement posts retrospectives on the work of an obscure Russian author, magicals appreciate the piece, but muggles struggle to relate. Yet when muggles go crazy for a Da Vinci Code, many a grail mythology fan stares on in disbelief at how people could be taken in by such a crass rendering of their beloved subject.

Muggles may not understand the appeal of games like Mass Effect, but most game industry people and fans are baffled (and disappointed) by FarmVille's success. There is a division of understanding on both sides.

Game makers often think that they can turn muggles into magicals, but that’s like saying that encouraging people to watch soap opera will convert them into cinephiles. It might, but that shouldn’t be the primary ambition of making soap operas. Wine experts who make cheap, heavily branded wine are not trying to turn wine muggles into wine magicals. Their wine is aligned to the muggle wine market, and if a muggle becomes a magical as a result that’s fine, but it’s not the focus of the winemaker’s business.

To make a product in any industry which is intended to draw in muggles, realise that that product has to conform to their narrow expectations. You may rail against it, but that’s what a muggle market is. If you can’t do it, make products for magicals instead. You’ll be much happier.

What social and and casual games have uncovered is the gaming muggle. Gaming muggles respond to broad, simple and cheap games. They don't want to be subtle, they don't want to learn and they don’t want to feel like they are ‘gamers’. They want to have fun in terms that they already understand, to play the best value version of whatever game they can find, and not to have to spend a lot of time, money or attention to do so.

This is what Nintendo understood with the Wii. They dumped their traditional design aesthetic and replaced it with a little white little box and wavey-arm controllers. They tailored the software catalogue for the machine toward barn-door simplicity, de-emphasised traditional Nintendo brands like Mario and Zelda, and opted for ‘verb’ games like Wii Fit and Wii Sports. The Wii is a machine built for muggles, with magicals intentionally kept well off the side. And it's cheap.

The same sort of thinking applies to many successful iPhone apps, Facebook games and other broad-and-simple software. These kinds of games are not meant for magicals (though magicals will of course try them, and sometimes love them). They are meant for muggles, people for whom the idea that games are a complex art form is entirely outside their frame of reference.

In time that may change, but in the mean time the muggles really just want to fling angry birds at green pigs to save golden eggs for the princely sum of 99 cents.

Mugglification

The thing is, the internet is having a dual effect on muggles and magicals. It is spawning many more tribes by allowing interested groups to connect as never before, and so magic is spreading. However it is also creating many more muggles.

Mugglification of the market has created a whole new layer of gaming customers for whom games are just a 99p activity. It has also opened opportunities for magical developers to connect to their customers because of the ease of distribution. In each case there is great success to be had, whether it’s a simple-and-fun concept like Tiny Wings (a muggle game) or something interesting to fans like Game Dev Story or Epic Win. Each has its place, but each also needs a very different approach.

The reason is the profusion of choice. As Chris Anderson notes in The Long Tail, one of the interesting things about offering users an endless choice is that they will take those choices. But remember that we are all muggles in many subjects and only magicals in a few subjects. We may have infinite choice, but we do not have infinite attention span, and that means that the number of tribes may be growing but their individual memberships may not.

What the internet has done is essentially created a divergence. People can connect and become even more magical about their passions, but they also have many more things that they ignore. So where perhaps there used to be a middle ground for the moderately successful artist, or the middling interesting game, the squeeze is on to eliminate that segment.

You’re either in the skimmed milk or the full fat business. Nobody wants half-and-half any more. The middlecore, as an online friend of mine once dubbed them, are increasingly uninteresting to either side. And the worst of both worlds is to try and include a bit of both.

Making a magical game that contains some nods to the muggles tends to result in a watered-down mealy mouthed game that the magicals don’t respect. Whereas making a muggle game that tries to involve the magicals results in a game that the muggles don’t understand.

Increasingly, the business of finding magicals requires a dedicated purpose and passion to really make something that matters. The indies have known this for years, and they are starting to connect with their audiences in real ways (and more power to them). However, making a muggle game is also an act of purpose. It takes hard work to make an idea simple enough, cheap enough and yet fun enough for the muggles to really understand and want it.

Conclusion

There is a world of difference between muggle and magical. Both influence each other, but both are alien to each other at the same time.

To make a game for a magical audience, you have to redefine expectations. You have to build a tribe, work on your visibility and communicate passionately with fans or would-be-fans. You have to surprise and excite and tell a marketing story.

To make a game for a muggle audience, you have to meet expectations. You are still telling a marketing story, but that story needs to have a very narrow frame of reference. It needs ubiquity, needs to engage them along lines that they will already understand, and at a price that they will like.

Each is different, and each is as prone to success or failure as the other. But if you’re going to do it then commit to it, because the one thing you’ll likely never do is create a magical audience from a base of muggles.

They just don’t care. They’re busy.

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Nous
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Pesky $5 games

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Bill Loguidice
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Yeah, Real Racing 2 HD is on

Yeah, Real Racing 2 HD is on my hitlist once my iPad 2 arrives...

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