A Third Outcome for the Future of Gaming

Opinions on the future of the game industry pretty much fall into two possible outcomes: Either mobile devices will become the primary gaming platform, or the next-generation consoles will renew interest in console gaming, and mobile will either remain its own unique creature or fade away.

Ben Cousins makes a good case for the first option.  Console hardware is sold at a loss and is reliant on sales to people that aren't really that into games.  There is certainly an underlying "core" segment, but they alone are not enough to support the market.  The casuals have moved on to a new gimmick, mobile, and won't be buying new Playstations and XBoxes.  Or something like that.

The other possibility is that a new hardware refresh cycle will attract renewed interest in console games, and things will continue as before.  This is a less revolutionary prediction, so I won't link to anyone espousing this theory.

If mobile does indeed "kill" consoles by taking away the casual segment that funded the core segment, the idea is that game studios will move over to consoles.  Mobile will become the new leader, and we'll all be playing "console-quality games you can hold in your hand!" (TM)

There's a problem, though.  High-end 3D mobile games have already existed for some time.  id Software led the way with a version of Rage for iOS.  Epic has been messing around with mobile for a while now.  Both of these studios that led the charge have quietly terminated mobile development.  If 3D mobile games are so hot, why are the market leaders shutting down?

 

Maybe the business model for mobile is different.  Maybe In-app purchases are the way to go.  Sure, you will get less revenue per player, but the market size is enormous, so you can make it up on volume.  The problem with that approach is that as your market gets bigger, it gets dumber, and the increased benefit of a nice looking 3D game matters less to them.  They're perfectly happy playing simple match-3 games.  Maybe their tastes will improve as mobile hardware gets more powerful.  But attempts so far at console-quality mobile games do not appear to be going well.  If this was what the market wanted, Rage for iOS would have mopped the floor with "Candy Crush".  Instead, id shut down their mobile division and sold their company to Bethesda.

I think we should consider a third possible outcome: Mobile might steal away casual interest in consoles, but that doesn't necessarily mean it will provide a new ecosystem capable of sustaining the industry.  How many free games can the mobile market support?  How many VC-funded firms will aggressively market free products for years in hopes of a big payoff, before finally shutting down?  Exactly how low can prices drop once they've already hit zero?

If this happens, 3D gaming would likely return to the PC and mobile would experience a repeat of the Atari game crash.  The entire industry would compress.

My purpose in writing this is not to inflame controversy or make a prediction.  I just wanted to consider a third possible outcome I haven't heard anyone talking about.  Maybe the future of the industry isn't an either/or choice between consoles and mobile.  It's anyone's guess, but we'll find out soon enough.  With Leadwerks, I am keeping a foot in both PC and mobile, for the time being.