This is Not the Last Console Generation; Nintendo Should Not Go Mobile

There are recent prognostications  by industry analysts arguing that video games as we know them are on a lifeline and that the current generation of hardware is the last gaming generation. Their predictions are often accompanied with grandiose statements about how the future of gaming will be found in the mobile market. This most recent round of doom-saying is spurred by Michael Pachter's recent comments in a Cloud Gaming USA, where he argued that because the most recent Call of Duty only has 25 million players while Candy Crush Saga has 350 million, video game publishers should go into the mobile market and disregard console gaming, as "there won't be a next cycle" [of video game consoles]. Analysts and game journalists alike further argue that another reason that will precipitate the death of the console are the alleged low sales numbers. Buzzwords like "low adoption rate" and "small user base" seem to flood publications. Last time that someone made this argument, I offered a counter-point using available data. This time, I will use a comparative approach to show that based on the current sales numbers, the gaming industry as a whole is just as healthy as it was at this point in previous cycles.

The Playstation 4 was released on November 2013. By the end of its first quarter in the market on December 31st 2013, the console had sold 4.1 million units. Since then, the Playstation 4 has gone through three additional quarters (the current quarter included).The fourth quarter has not come to a close, and the Playstation 4 boast 10 million units sold. A comparative gaze juxtaposing the eighth generation Sony console against the highly praised seventh generation Playstation 3, one will notice that when the Playstation 3 was at the stage of its life cycle that the Playstation 4 now finds itself on, the  Playstation 3 had only sold 5.63 million units. In other words, a comparison of sales figures between the Playstation 3 and the Playstation 4 clearly shows that the Playstation 4 is at a stronger position than its predecessor was at the same point in its life cycle (source: vgsales, NPD sales figures, MediaCreate sales figures, chart-track sales data).

The X Box One, also released on November 2013, also finds itself in a more favorable position than what mainstream video game journalists care to acknowledge. During its first quarter in the market, the X Box One somehow sold 3 million units, despite facing harsh criticism from gamers and game journalists alike. The latest sales numbers for the console place the sales number at 5 million. Although this places the X Box One sales numbers at around 900,000 units less than those of the X Box 360 at the same moment during its console life cycle (by September 30th, 2006 the X Box 360 had sold 5.9 million consoles), this is not entirely surprising given that the X Box One was released in Japan only a few days ago, while the X Box 360 was released in Japanese markets only a few days after the U.S. release (source: vgsales, NPD sales figures, MediaCreate sales figures, chart-track sales data).

An argument could be made that Nintendo is in a poor position when it comes to console sales. The most recent data places the total Wii U units sold at 7.1 million. Although it might seem that the Wii U is at a better position than the X Box One, it is worth noting that Nintendo's latest console was released on November 2012 - a full year before Sony and Microsoft's consoles. This would place the Wii U currently at its eighth fiscal quarter. When comparing its sales numbers to the sale of Nintendo's previous console, the Wii U's mere 7.1 million units pale in comparison to the Wii's almost 35 million. (source: vgsales, NPD sales figures, MediaCreate sales figures, chart-track sales data)

If trends mean anything, and one would think that in data analysis trends are of utmost importance, then what one would expect, rather than "the death of consoles", is a bump in console sales fueled by the holidays, followed by additional yet steadily decreasing sales in subsequent years. If trends hold true, based on current numbers, and assuming a console generation to last around 8 years, it would not be unreasonable to assume that within the next 7 years, the Playstation 4 will have sold over 85 million units, with the X Box One surpassing the 70 million mark and the Wii U selling at least 50 million.

The data analyzed above shows that there is no obvious "death of the gaming console". As I have noted in my previost posts, it is true that there are more potential customers for mobile games than there are for console games. After all, assuming a best case scenario, if one assumes that console owners only purchased a single console during the past generation - that is, that no one purchased two or more consoles (a ridiculous idea if there was ever one) - it would mean that around 270 million families own a game console: 101 million Wii units sold, 83 million PS 3 units sold, and 83 million X Box 360 units sold (source: vgcharts). By contrast, the number of cellphones sold yearly are measured in the billions, the majority of them being smartphones. This, of course, would make analysts who are largely ignorant of the gaming culture - analysts like Pachter - think that phones are the gaming device of choice. What Pachter and others fail to understand is the simple fact that phones are not video game consoles - they do not appeal to the same type of player, they do not offer the same play experience, and they fail to offer games of the quality demanded by those who use consoles, or even personal computers, to play games.

Plenty of commentators have written about the different types of players. Many of these monikers center around the type of games predominantly played. "Hardcore gamers", for example, are those who primarily play games such as Madden and Call of Duty, while "casual gamers" are those who play social games through platforms such as Facebook. In order to understand what type of hardware caters best to what type of player, however, it is prudent to renounce the kind of schema previously mentioned and instead look at gaming habits. When it comes to gaming habits, people who play games can be divided in two broad categories - those who play games at home and those who play games on the road. The first of those groups include not only those who purchase video game consoles, but also those "casual gamers" who wait to be in their homes before playing games. The second, much larger, group includes those who play games on their phone when waiting for a doctor's appointment, for the instructor to get to the classroom, or for the next bus stop. These play habits are best served by hardware specific to each task. Those who would prefer to game on-the-go will want some kind of a small device, preferably one that fits in their pocket, that can provide easily accessible games. Many will opt to purchase a dedicated gaming console such as the DS family of consoles (total 195 million units sold), while others opt to play games on a mobile device that they already have accessible. Certainly, it would be easy to argue that people can play with their phones at home or that phone games can be streamed to a television set. However, this kind of argument ignores the fact that games readily available on mobile stores offer different play experiences than games available on gaming consoles.

Most of the games available in mobile game stores fall into three broad categories. The first broad category are "clicker" games. in these  games, the player taps the screen at given intervals. These intervals can be determined by rhythm,  with the now popular Cytus serving as an example, or by pre-determined game goals. This second category of clickers include diverse genres such as one-click endless runners and farm games. The second broad category are "swipers", games like Fruit Ninja and Infinity Blade in which the player swipes the finger to accomplish a desired outcome. Certainly, there are some exceptions, and those exceptions are found in the third category - mechanically simplified adaptations of video games. In this category there are adaptation games such as Sega's Sonic Racing series - games which are available both for mobile and console devices but whose mobile versions have simpler controls and mechanics and less features - and  influenced games such as the Zenonia series - simple Zelda-style adventure games. Console video games, on the other hand, offer players complex play experiences. Certainly, one could summarize the play in Call of Duty as "shoot the other guy". However, this would ignore how the game system is balanced to give different character types and different weapons advantages under different situations. True, one could summarize the narrative in Atelier Ayeisha as "one girl trying to rescue her sister", but this would ignore the complex alchemy, battle, gathering, and exploration systems which lie under the game's visuals and narrative. Furthermore, as visually stunning as Infinity Blade III is, current cellphones are unlikely to be able to run current generation titles such as Destiny and Titanfall. Furthermore, as stated above, the play experience - that is, where and how someone plays the game - are drastically different when one plays on the phone and when one plays on a console. Phones provide small screens, relatively poor audio, simple games, and touch controls with no feedback. Consoles, on the other hand, allow gamers to use large screens and set up surround audio to play complex games using force feedback and rumble features in their controllers while they sit on the couch.

I should note that my comments do not mean that phones will never be able to play games such as Titanfall or Destiny. Indeed, the current generation of phones perform brilliantly when running games such as Final Fantasy Tactics, which was originally made for consoles.  Given the visuals that current generation phones can output, it would be easy to imagine a phone running Playstation 2-level games. However, current generation phones simply cannot run modern titles because they lack the processing power. It may be that sometime in the future technology has advanced so far that a cellphone may be "docked" into a home system and that phone will have a video card that is able to output visuals on-par with whatever the current gen of console and P.C. games are. It may be that because of the digital nature of mobile game distributions and the always increasing size of video games, the phone will come equipped with a few hundred gigabytes of memory, so that it will be able to store those gargantuan 10 - 40. However, while that future is indeed possible, given that the increment in processing power of phones per generation versus the increase in power per console generation and in the power of personal computers, it is accurate to say that unless there is some sort of breakthrough in phone technology, that the power of phone technologies will always lag 10 - 15 years behind whatever the current video game generation is and that they will never match a computer in terms of processing power. It may be that society reaches a point when they say "we don't need any more processing power", cut development on computer technologies, and focus on making phones as powerful as computers, which would then allow phones to run console and P.C. level games, but that seems unlikely. As it stands, if technology keeps improving at the rate it has for the last half decade for phones, computing, and consoles, not only will phones never be able to run whatever is considered "current gen" at any given time, they will have problems running anything considered "last gen" as well. Despite what industry analysts might hope against hope for, the infrastructure of phones simply does not allow for large scale, mechanically complex games.

It would not surprise me if in the future, perhaps 15 to 20 year from now, consoles as we know them will no longer exist. When one looks at the rate of technological progress, it indeed does become difficult to imagine a future where video game consoles in their current form still exist. In fact, it is arguable that we are already on our way to that future. The technological convergence that we are experiencing all but guarantees that eventually we will have a single technological device that will perform as computer, tablet, phone, and game console. As things currently stand, video game consoles are behaving as multimedia centers through the inclusion of apps like Netflix, Amazon Prime, and Red Box, while computers are offering a selection of video games almost as robust as that available in consoles through services like Steam and GoG. The Microsoft Surface and other similar products break the boundaries between tablets and laptops, and - yes - even phones allow users to browse the web and play simple games. However, this does not mean that video game consoles will die this cycle, because despite Steam and GoG and The Apple Store, some video game developers are still hesitant to put their products on digital game distribution systems, and with good reason. Despite Steam having over 75 million users, Call of Duty: Modern Warfare sold a meager 1.6 million copies on P.C. digital distribution systems, while selling well over 25 million copies on consoles. Bioshock Infinite saw sales of over 3 million in consoles, while only selling around 500,000 copies on P.C. distribution systems.  This trend remains constant - whenever a game is released for both consoles and P.C.s, the console version outsells the P.C. version of the game at a rate of at least 5 - 1. What this shows is that a large segment of the audience for these major releases prefers the console over the P.C., let alone the phone or the table.

Yes, there are over 350 million Candy Crush players. The reason for this is not because there has been some mass exodus of people who play video games to mobile. The reason for this is the same one for why the Wii outsold the Playstation 3 and the X Box 360 - there was a new audience for new games. As all the advocates of the Glorious Mobile Gaming Future eagerly point out, everyone from Little Timmy to Grandma plays Candy Crush Saga. Candy Crush Saga and other mobile games made gaming cool for non-gamers. And that's great. As I have pointed out before, the more people who play games, the better. However, I would be hard-pressed to see Mom and Dad take out their phones during their coffee break to play a round of Call of Duty, Mass Effect, Final Fantasy XV, Kingdom Hearts III, Titanfall, or Destiny on their mobile device. Call of Duty, Mass Effect, Titanfall, and Destiny are not Candy Crush Saga, nor should they try to be. Video game consoles and smartphones are different devices that serve different needs for different customers. If video game developers were to go mobile only, they would not be gaining a new audience - they would be losing an old one. If there is any model to be followed, it is the Sega model. Sega publishes games on all platforms while tailoring each version towards the audience of each platform (Sonic Racing on mobile is far simpler than Sonic Racing on consoles, while there is no Sonic Dash or Sonic Jump on consoles or PC), which assures that all players alike have access to its products. If there is any honest recommendation to be given to video game developers, it is not to quit making games for consoles and turn their attention to mobile games. It is to consider making simplified mobile versions of their already popular console games while still maintaining their console dominance; that, or perhaps for them to purchase a mobile app company. It's not a bad thing to diversity, but it can prove to be a terrible decision to shun a faithful audience.

The question remains, then, where does the future of gaming lie? If the X Box One launch debacle taught us anything, it's that gamers don't want to be constrained to cloud-only gaming. Although Steam and other services are making gamers open up to the idea of a digital-only ecosystem, gamers have asserted that it must be an ecosystem in which the user has a substantial amount of control. If Sony and Microsoft play their cards right, then, it would not be hard to imagine a digital only Playstation 5 or X Box X (we all know that Microsoft and serial console numbers don't see eye to eye), assuming, of course, a viable communications infrastructure and telecom speeds. With the current Internet market as it stands, however, this seems highly unlikely. And as for Nintendo, Nintendo has stated repeatedly that it will not become a third party publisher or turn its attention to mobile. The arguments that Nintendo should go third party stem from people who want to play Nintendo games but don't want to buy the console. My advice to those people is to buy Nintendo's console. In their practice, Nintendo agrees with this assessment. Eventually, Nintendo rationalizes, people who want to play their consoles if they want to play Nintendo games. And they are right. 22 out of the top 25 best-selling games of all time are from Nintendo. Despite its current problems with the Wii U, Nintendo has proven throughout its history to be a highly versatile and adaptable company. In a near future, it would not be hard to imagine some version of their 3DS console that can stream games to the television, thus taking the technological convergence which I previously alluded to one step further. As the gaming industry continues to scramble, looking for an ever-increasing consumer base, Nintendo will be doing what it has always done so well - making games for its own consoles.  So don't worry about Nintendo. Nintendo will be all right.

VGCharts - console numbers at a glance

VGSales - sales numbers per console per quarter