Console != Highlander

Next-Gen recently published an editorial entitled The Road to a Universal Platform which (to be blunt) rejected one naive assertion about the fate of the console with an equally naive (if well-intentioned) proposal to the industry. Let’s dive right in:

David Jaffe recently came under some criticism for a few statements to consumer website 1UP about his future visions of the game industry. The big headline, repeated across the Internet for a day or two, was “Ten years from now there will be one console”.

Like there’s one computer processor? (AMD vs Intel) Or one brand of cola? (Coke vs Pepsi) Or one consumer operating system? (Mac vs Windows) Etc…

There won’t be “one console” anytime soon because market forces won’t tolerate the existence of a single player in this space — not as long as “consoles” are defined as they are today. The market opportunity is simply too great for potential competitors to ignore. And of course, there are the social and legal dimensions to this.

The most essential problem is that unlike film or music, video games have yet to come into their own. Before anything resembling standardization is appropriate, there are still tremendous problems in interface, design theory and craftsmanship to address…. the difference between the Wii and the Xbox 360 should give a taste of how far we have to go before we’re ready to settle.

Well put, though I’d go one step farther and say that design innovation will (and should) never cease, and as such, the opportunity to “settle” on a single console platform will never occur. Today we’re playing with physical motion and Live services. Tomorrow we’ll be experimenting with holographic projections, or mind-controlled games, or who know what else. Whatever the case, you can be sure the possibilities will be far too numerous and wonderful for any individual company to single-handedly digest. Competition is a vital component of innovation. In a free market economy, you simply can’t have one without the other.

What the industry really needs is a video game standards commission — a body headed by a rotating board of representatives nominated from all areas of the industry… Different manufacturers would agree to different development paths, depending on their market and audience goals. All manufacturers would receive input and guaranteed and appropriate support from member developers.

Not so well put. Not only is this naive, but it borders on illegal collusion (the only difference being the level of secrecy… not sure that would make enough difference to the courts.)

Let’s imagine Nintendo’s senior executives having a private conversation approximately three years ago. The topic: how to rescue their non-portable console business. The plan: abdicate the technology war (which Nintendo has no hope of winning) and focus on a novel interface innovation and pricing strategy. “Great work, team! Now all we have to do is run this past Sony and Microsoft at our monthly standards meeting. I hope giving them advance notice of our plans won’t have any unintended, negative consequences.”

*Cough* Sixaxis *cough*. I wonder how much the PS3′s controller design would have changed with multi-year advance notice of Nintendo’s plans?

Is it such a big step for the three hardware manufacturers to form a coalition for the betterment of all? The bigger step would be ceding authority to an outside body on matters directly affecting business. Still, if representatives from all three manufacturers are given a seat…

Wow. I feel like I’m watching an episode of “That 70′s Show.” Except all the attractive women have been replaced with a bunch of stoned male game developers in a sweaty group hug.

20 Responses to Console != Highlander

  1. This is indeed la-la-land stuff. To be honest, I can’t help but think that in ten years, there’ll be no console. Surely the humming serverbox in our basements that streams everything to seventy different screens around our homes will fulfill that function? Mind you, I think I predicted this about five years ago, and it ain’t happened yet…

  2. I know quite a few people who would agree with you on the “phasing out” of the traditional console. *If* it happens, it will probably take a surprisingly long time (since game-specific technology innovations are evolving quickly and with no end in sight.) And *if* it happens, you will still not see one box and one standard. That serverbox in your basement is going to be the site of titanic corporate clashes…

  3. Given our similarity in business-world training, it’s not surprising that I agree with you, David.

    I should dig up my analysis of the industry I did in B-school last year that showed there would continue to be multiple consoles and see if it still holds true. Honestly, I think that we’ll continue to have consoles — and multiple consoles — until such time as the structure of the industry changes (or, what you called the redefinition of “console”).

    Although I can see how one console would help developers, since they’d only need to make games for one platform, I can’t imagine that publishers (or developers!) would be happy having to deal with a single market-controlling monolithic entity.

    Given that technological change would still occur and require a new system every few years, I don’t see any real benefit to consumers. As difficult as they can be, market forces are good for some things.

    And one last nitpicky practicality point: if you have this standards commission, what happens when a player wants to leave or enter the market? Does SEGA still get a say in consoles after they become a software house? Does Microsoft get a seat before they have a product on the shelves? What about things like the Phantom? What about the handheld market? Games on cable boxes? Yikes, what a can o’ worms!

  4. What do you think of Costikyan\’s argument that first-party gatekeepers to digital distribution means (i.e. XBLA, Wii Store, PS Network) attain a new hegemony by displacing third party publishers from the equation? Isn\’t that, in seperately dimensional sense, similar to the cohesion you\’re describing here, except its a matter of party hegemony instead of console hegemony?

  5. What do you think of Costikyan\’s argument that first-party gatekeepers to digital distribution means (i.e. XBLA, Wii Store, PS Network) attain a new hegemony by displacing third party publishers from the equation?

    Fundamentally untrue. You can’t “displace” third party publishers — not unless you’re feeling suicidal from a business perspective. What do you think would happen if Xbox told publishers, “Hey, we’re cutting you out of the whole digital distribution thing! Nyah nyah!” I’ll give you a hint: something very, very bad would happen to our overall content pipeline.

    XBLA has a dedicated “third party publishing process” that is designed precisely to keep publishers happy (and keep their valuable content flowing into XBLA.)

  6. David,

    Did you see this article about the potential XM/Sirius merger (http://www.engadget.com/2007/02/21/sirius-and-xms-merger-presentation-revealed/)?

    I agree that a unified box isn’t likely (particularily given the fact that we are seeing greater and greater diversity in what people want from their gaming boxes. Mobile, portable, casual, online, etc) but I wonder what your thoughts are on potential mergers in the space as it exists now (or in the next few years).

    Can you see a scenario where we’d see one less player in the space due to a merger or buyout? If so, who?

    -Ben

  7. Did you see this article about the potential XM/Sirius merger?

    Hadn’t seen it — thanks for the link!

    I don’t know as much about satellite radio as I probably should. That said: I believe these companies have been (and are predicted to continue) losing money hand over fist. The market’s ability to sustain two companies is an important consideration. Also, a question: are these companies Pepsi and Coke, or are they both Pepsi wanna-be (battling traditional radio, which would be Coke?) Anyway, that’s enough from me since I know almost nothing about the satellite radio market. ;-)

    I wonder what your thoughts are on potential mergers in the space as it exists now

    I think you’re more likely to see an outside juggernaut try to buy Nintendo (or, to a lesser extent, Sony) than you are to see a merger of existing console manufacturers.

    Can you see a scenario where we’d see one less player in the space due to a merger or buyout?

    One less player is possible, though the cause may not be merger or buyout. Hard to say anything more than that (outside the realm of very wild speculation.)

  8. Here’s my contribution to deconstructing the road. In a nutshell, Waugh gets “the most essential problem” of video games wrong. The problem is not a lack of standardization. In truth, the problem is most likely a lack of differentiation. Waugh is simply perpetuating the convergence myth as strategy.

  9. It’s not only not going to happen (single console), but the view taken by Jaffe is just *way* too limited.

    There are not 3 consoles today. THere are DOZENS. The ‘premium’ consoles (360, ps3, wii), the budget/price-waterfalled consoles (AFAIK, you can still publish a PS2 game), there are budget/dedicated consoles (like the retro-atari ones that come with 20 games built-in), there are kids consoles (leapfrog and one or two other companies make them – same razor/blade biz model), and there are console biz models on multifunction devices like set top boxes.

    The bigger the market grows, the more opp’ty that a niche segment can sustain a console targeted/dedicated to just that niche.

    Jaffe’s comment is pretty naive if taken at face value. If he’s really saying ‘there will be one winner in the premium/high-end space, and others won’t have the capital to invest and keep up/catch up’, then it’s plausible. I disagree, but it’s a plausible theory.

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