Why Consoles Are Going Extinct

since the creation of video games no piece of Hardware has been more important than the console it brought video games to our homes in the'80s will you be the one to experience the Nintendo Entertainment System it popularized them in the '90s 16 bit Super Nintendo and transformed home entertainment in the 2000s for decades consoles have pushed the world of gaming and Technology into the future with many consoles being combined to create supercomputers for governments or banned from certain countries because of the console's advanced technology and the PlayStation 2 became the repeated Target of War related media coverage every console generation seemed to propel us forward bringing something new powerful or Innovative but in the past 10 years consoles have fallen behind with many people jumping Shi to PCS and phones what was once a console dominated industry has now become a place where consolle sit in third place slowly losing market share year after year with many investors telling new game makers to avoid consoles we sit in these seats as venture capitalist and I think if a Founder came to us and said they were going to try and start a game and ship it on Console we would be like what why but back in the old days it wasn't PC versus console versus phone it was console versus console and these console Wars brought us the greatest gaming Hardware generation after generation but the constant battle for dominance has driven the very thing we've been fighting over to its grade and Microsoft is behind it game console Wars the console Wars at console Wars console [Music] Wars real quick before I dive in we need to talk about today's sponsor nordvpn sponsors are important for the channel because half of all of our sponsor Revenue goes to help fund Indie developers and unlike so many sponsors that have reached out I actually reached out to Nord myself as someone who travels for work I sit in multiple airports every month and usually my internet service in there is garbage so instead I spend hours doing work on the very sketchy public airport internet but thanks to Nord I'm able to use that airport Wi-Fi safely because I don't have to worry about my data or passwords being compromised I just flip a switch and I'm good to go so with the going Indie discount you can can get 4 months extra on a 2-year plan by checking out the link below it's risk-free with nord's 30-day money back guarantee and you can get access to all these great services so as someone that has used multiple vpns over the years I highly suggest nordvpn and I want to thank them for sponsoring us and helping us fun Indie developers long before I was around the first console War began a war waged by Atari and in television although the Atari was the first and is the most wellknown the television had better graphics and sounds and found in television played much more like real baseball looks more like he should be comparing whiskies not game consoles but this was the beginning of the console Wars and the smeir commercials by Mattel were actually working in the 80s the intelvision had a real chance of competing with Atari and as a result of the competition the console Market was on the rise sadly though as home gaming was just getting a foothold crisis struck the video game Market crashed in 1983 the gaming Market was saturated with lowquality games and people were more interested in purchasing personal computers why buy $1,000 console to play this you could play something just as bad on a PC personal computers were more of a versatile option with the ability to play games and work a problem we will see Pop Up years later but with the fall of the console home video game revenues went from 3.2 billion in 1983 to a 100 million in 1985 a 97% drop so the first console war was won by Atari but in reality was more like mutually assured destruction video games were looking more like a fad filling up landfills and loss to obscurity like the original console makers but then a console Rose From the Ashes from a playing card company we all know today Nintendo Nintendo really was the savior of gaming because when they released the NES in 1985 it completely shifted people's perception of video games so many games produced at this time were expensive garbage and Nintendo didn't want another ET Fiasco every Nintendo title had to be quality and when the NES released it blew people away the gameplay the stories the characters practically every prominent Nintendo IP came from this generation and it was actually affordable the NES was gold every kid was pleading to get this thing for Christmas Nintendo had a complete Monopoly of Home gaming and with only a $300 prize tag people were happy to buy Shut Up And Take My Money other companies saw this success and wanted in one company in particular stepped into the ring against the console King and they did it in style nintend so with the release of Sega Genesis in 1989 and the media campaigns on full blast the second console War Began these two Japanese companies fought for dominance each fighting over specs gameplay and IP with Sega creating Sonic to rivel the mustache plumber commercials advertisements bits these companies fought incessantly and it seemed like the console industry would be dominated by Sega and Nintendo Forever Until a third Japanese company entered the [Music] arena when Sony joined the brawl the company jumped to first place immediately the PlayStation was incredible it was more powerful than anything out there any use CD ROMs not cartridges for its games on top of great Hardware they had a topnotch cast of characters ranging from Cloud to Crash Bandicoot your worst nightmare has arrived Sony was geared to win the next console war and as Mexican standoff caused Sega to fall behind leaving the console industry to never return I number two through most of the ' 80s and 90s the Japanese dominated the console industry from Nintendo to Sega to Sony no one else dared to compete or they died trying but then Microsoft and Bill Gates did the unthinkable they not only entered the console Market but they entered it with this what the hell is that although the original Xbox looked like a green monstrosity when compared to the PS2 the green box was powerful way more powerful than the PS2 or GameCube but it was new and it didn't have that many games so it sold only 24 million copies which sounds pretty good until you compare it with the PlayStation 2 but the Xbox did good enough for Microsoft to Greenlight the next one and thank goodness they did because the next console generation would be the biggest in console history this is your new Xbox 360 we've got one now on to PlayStation 3 I owned every one of these consoles and each one had something I couldn't resist the technology in the PS3 was amazing Blu-ray DVDs players at the time were close to 1,000 bucks and you got one built in the PS3 for only 600 the Xbox 360 had the best game lineup in community that original interface was just oozing fun and friends and then there was the Wii this little white box had Wii Sports sprawl Super Mario Galaxy those games were awesome I don't remember playing much else since most wi games were kind of gimmicky but it was still tons of fun and the commercials were great where you would like to play this generation was fiery hot every console had something unique about it and the sales were neck and neck this generation ended up being incredibly important cuz this was the last real battle of the console war where consoles duked it out each with their own personality and value when consoles were at their Peak but the next console generation would be quite different 7 years after the sth gen consoles were released it was finally time to see what was coming next and Sony announced the PS4 play the PS4 looked like a great console with all sorts of games and community-driven features not to mention you could use it as a media player people were excited people were also excited though to see the new Xbox the 360 had been amazing aside from the red ring of death and players couldn't imagine what the Xbox announcement had in store go to Internet Explorer Skype when you're exercising it can read your heart the announcement was bad people weren't sure if this was a console or some kind of device to watch movies and Skype your friends I'm looking forward to you showing off the great work we're doing with our partners at ESPN I felt like Microsoft talked about everything but normal games they were so focused on being the future family room technology they forgot why people buy consoles in the first place games fortunately we have a product for people who aren't able to get some form of connectivity it's called Xbox 360 even when they did talk about video games it was controversial cuz it was uncertain if you could play your titles offline or even share them with your friends Sony of course saw all of this chaos and had a little fun with the controversy this is how you share your games on PS4 thanks sadly the Xbox One flopped on release and it wasn't the only one a few months earlier Nintendo released this horrendous thing a console that allowed you to play games on a tablet but you couldn't really travel with it so it was like this console wnab be handheld thing I didn't get it I don't get it and neither did most people it failed hard this was the first time Nintendo wasn't profitable and the company was struggling everything but the PlayStation was crashing and burning Xbox lost its identity as a gaming console and Nintendo made a console that was trying to be a handheld by just making a normal console Sony immediately won the battle but the Divide just got even bigger thanks to exclusives the amount of exclusive games PlayStation had was Leaps and Bounds better want to play Halo 4 buy an Xbox One or just play it on the Xbox 360 whatever who cares want to play any of these games yeah buy a PlayStation 4 so Sony won the battle but unlike any other console fight this one would have longlasting consequences such an impact that the Wii U would be Nintendo's last console huh what about the switch some people are really stupid the switch isn't a console may sound crazy but hear me out let's look at the creation of the Wii U and I think it will explain why the switch isn't what we normally Define as a Home console since the N64 Nintendo had been in second place to the PlayStation losing over and over so Nintendo branched out with the Wii no longer competing on specs but instead taking a blue ocean approach with a focus on unique gaming experiences it worked but like I said before the Wii was kind of gimmicky and Nintendo knew they couldn't do the same gimmick twice so when the new console was in ideation leadership noticed something Nintendo had been losing the console word to PlayStation for years but they had been winning the handheld war no one even came close to Nintendo's dominance in the handheld Market which sparked an idea people love Nintendo handheld so much why not package one in with the console someone at Nintendo had a great idea with the Wii U but had bad execution instead of making a console with handheld capabilities they needed to make a handheld with console capabilities sound like something the switch is first and foremost a handheld it is a hybrid device for on the go that can also be plugged into a TV and it's brilliant Nintendo had been playing in two markets for 30 years dividing the resources between the console and their handhelds but with the switch they could focus on making great games for one platform mobile hardware for any situation so Nintendo exited the console war in 2017 and I don't see them ever making a return which leaves us with two the duopoly for years the PlayStation and Xbox have fought for the right to say we're the best best games most storage top-of-the-line graphics with adamant fans fighting with them but when the Xbox one fell behind the the leaders of Microsoft gaming division realized something this loss was going to hurt unlike any other console generation this gen introduced digital games games that could be played on any future console we lost the worst generation to lose in the Xbox one generation where everybody built their Digital Library of games so Xbox lost the most important console battle with digital games being a driving force and Microsoft realized they couldn't win the console war against PlayStation we're not in the business of out consoling Sony or outc consoling Nintendo um there isn't really a great solution or win for us so they decided on a different strategy something that would take years to implement but it would finally put Xbox on top there's just one problem to be the best Xbox would have to kill the console now this is speculation I want to make sure that is crystal clear but if we look at the actions of Microsoft and the model they are pursuing it makes sense to kill the console why because it's a razor and blades model if you're not sure what that means this is how the model Works a razor you buy at the store is sold at a loss but razor companies do this because they recoup their money and make tons more by selling blades for a high margin it's why companies like Gillette Sue anyone that makes blades that fit their razors consoles are the same way consoles are normally sold at a loss often times a loss of hundreds of dollars per unit we're subsidizing that purchase somewhere between $1 $200 with the expectation that we will recoup that investment over time but most console companies make back their money with publishing fees in first-party games so whoever is winning the console a war is selling more games which minimizes those console costs and makes the console company way more money because of all the blades or games they're selling but if you are losing the console war and people aren't buying your hardware and games your cost can kill you which is why so many companies have dropped out of the industry or died competing it can cost billions of dollars to develop a console and you have to develop a new one every 5 to 8 years restarting the process and going back into the red so as the consistent loser in the console W Microsoft had every incentive to kill the console and the first step in accomplishing their goal was to buy Minecraft they're buying Minecraft for $2.5 billion dollar at the time many thought this acquisition was an odd choice if Microsoft was trying to save at the Xbox One why buy Minecraft and then not make it an exclusive keeping it available on every platform including your rival PlayStation but as we know now this wasn't Microsoft 's plan following the Minecraft purchase more Acquisitions were made Studios like zenc Bethesda for 8 billion and activis blizzard for 69 billion with more promises that most games wouldn't be Xbox exclusives Xbox fans saw all these Studio purchases in the beginning and thought this is it all these great games will revive the Xbox console but according to Phil Spencer that's not true I see it out there I see commentary that if you just build great games everything would turn around it's just not true so Microsoft spent over $80 billion on game studios and it's not to regain console share but for building the Netflix of gaming this was the first step in Microsoft's plan to become the new market leader and kill the console to create the best gaming subscription service and so far I'd argue they are the best Game Pass is cheap and it's versatile it's got great games and exclusives it's got some issues don't get me wrong but Game Pass can be played on almost any device not to mention it's readily available on every Windows PC which by the way has 1.4 billion units worldwide and this Mass Market reach highlights the second step of Microsoft's plan make gaming or more specifically Game Pass accessible everywhere in the most recent Microsoft leak this photo was released showing the future of Xbox hardware and according to this Xbox infographic the future is every device TVs phones laptops streaming sticks Cloud devices consoles on there but it's not the focus for the leaks the next mid gen Xbox console to release will be All Digital and the Next Generation console is said to be a hybrid combining the power of the client and the cloud so the future of gaming is going to be everywhere and on everything but why is Microsoft still making consoles if this is the future well because technology isn't good enough yet and we still need consoles we saw what happened with Google stadia gaming isn't ready to go to the cloud completely nor are Gamers it takes time to move the market this is why Microsoft is doing a hybrid console in 2028 we still need adequate Hardware to run higher Fidelity games especially online games but it is getting better I've been streaming tons of old Xbox 360 games and indie games on my iPhone 13 and with the launch of the iPhone 15 Pro you can now play Modern games like Resident Evil Village but what's even more amazing is that you can use your phone to play Resident Evil with rate tracing on your TV with a PlayStation controller you literally can have a console in your pocket $700 console but this is where the industry is going why buy console when your phone can do the job or even better if your TV Can Microsoft recently partnered with Samsung you can now stream games directly onto your TV stating in 2022 if you're new to gaming this is an easy way to get into the fun without needing to buy a PC or console so Microsoft bought up all sorts of video game IP and they are making their games accessible on everything but one last obstacle has been standing in Microsoft's way the console war with PlayStation Microsoft needed to get people to stop fighting over consoles and start fighting over subscription services and a golden opportunity presented itself in 2017 with the release of fortnite you see in 2018 you could play fortnite with your friends across any platform PC to Playstation PC to mobile Xbox to mobile except one you couldn't play Xbox to PlayStation crossplay between consoles wasn't possible but if anyone remembers crossplay between consoles was available for a hot minute in 2017 when fortnite released epic games accidentally turned on crossplay between consoles epic claimed it was a bu bug and crossplay was fixed but players weren't dumb we saw what was possible and the cat was out of the bag crossplatform play between consoles was totally on the table it was literally just a click of the mouse away crossplay between PlayStation 4 and Xbox One is very easy to execute but Sony didn't like that as a console leader you don't want crossplatform play with your competitors online exclusivity was a core tenant of the hardware at the time and it helped PlayStation dominate Xbox if you can only play games with your friends on the PlayStation Network then your friends are going to buy a PlayStation not an Xbox but if you eliminate that exclusivity you remove a reason to buy a PlayStation or even a console so Phil Spencer and Xbox saw this crossplay drama as their way forward with Phil Spencer stating in a tweet he would have like to see epic games leave it on referring of course to crossplatform play with PlayStation so players companies and Phil Spencer were all asking PlayStation to turn on crossplay putting Sony in a pickle but it got even worse when fortnite was released for the switch at the the release Nintendo and Microsoft partnered up from Minecraft to fortnite most multiplayer games were being launched as crossplatform Nintendo of all companies was partnering with Microsoft and people were outraged with PlayStation for not joining forces the tension was high and Sony was backed into a corner finally 2 years after fortnite was launched Sony relented they' agreed to open their internet blockade Gamers could now play with each other on any platform and on any device it was glorious [Music] but by removing player exclusivity on consoles crossplay destroyed the reason for a console war why fight over which console is better when we can all play together yeah specs were still important but most people understood Xbox and Playstation are basically the same technologically and if you really care about specs you're a part of the PC Master race silly console peasants the only thing that still matters is exclusives but with the introduction of all these crossplatform subscriptions we won't get console exclusives in the near future now fans of course have still fought over which console is better keeping the battle flag flying for years after the fortnite charade but Microsoft put a stop to that and officially ended the war in June 2023 stating in their lawsuit against the FTC Xbox has lost the console Wars Microsoft surrendered they waved the white flag and it surprised everyone no one has ever admitted to losing the console war not in television not Sega not Nintendo not even the KFC oven console they just moved on or died but Microsoft admitted they lost because they don't care anymore the Home console isn't the future and they know it which is also why Sony was so strongly against the acquisition of Activision Blizzard Sony's CEO knew that Microsoft would not exclude Call of Duty and most other games from PlayStation he knew this acquisition would do little to affect PlayStation games in the near future but Sony tried to block this acquisition because they fear what's coming next a future of cloud gaming without consoles which is what the Activision blizzard lawsuit was really about change is the bane of all industry leaders just like Kodak who had 95% of the photography Market but then went bankrupt because they didn't shift to digital or Blockbuster who could have bought Netflix for $50 million but didn't because they were focused on brick and mortar it's hard to innovate when you're at the top so if you're Sony you want the console to survive and thrive you don't want to compete against Microsoft on new terrain Sony loses out on all these revenue streams when the console dies and they'll have to fight to stay dominant competing no longer in the console Wars but in the cloud Wars this is good for gamers competition brings variety new competitors like Nvidia will be able to compete and new hardware will be introduced sadly for Sony consoles are not the future of gaming and they know it they just want to extend the console's life cycle as long as possible unlike Microsoft year after year Microsoft has been slowly knocking down the pillars that hold up the console Hardware accessibility player exclusivity lower entry cost consoles are no longer the go-to gaming Hardware you don't need a $400 console to play games with your friends like you did in the past because of the market shift gaming is expanding across the globe at insane rates and the majority of countries don't have consoles or need them China is becoming one of the biggest gaming markets in the world and consoles were banned there till 2016 banned externally by the us because of their military use and they were banned internally by the Chinese government not wanting their youth to play video games so the console Market in China only makes up1 1% of all gaming PCs have also been the dominant gaming Hardware in Korea since the 9s because of PC bongs and think about India they have the largest population in the world and the gaming Market is growing rapidly there but what platform do you think they're going to play games on consoles aren't nearly as accessible in India as they have been in the west but they have phones TVs and computers readily available what platforms do you think game developers will want to develop for consoles no way it doesn't make sense you can reach a much bigger audience on other platforms at a much lower cost do I think consoles will completely die out and go away no I don't but I think they will be a fraction of what they are today a smaller group of people in the world that want top tier family room Computing basically just buying a computer for their family room but having a dedicated gaming device for your TV just isn't needed anymore at least it won't be soon so will Sony and Microsoft keep making consoles I assume they will for the next 5 10 15 years after that it's foggy 2028 is looking to be the bridge between Aras hybrid consoles to bring us to the Future little by little consoles and the console Market are decreasing replaced by hybrid technology cloud gaming and subscription Services the console almost died 40 years ago and its Resurrection in the 80s brought us some amazing memories but unless something changes I believe the console as we know it is becoming a thing of the past hybrid consoles Cloud Hardware phones and TVs this is the future of gaming signs all point to the death of the Home console it's sad to say but it's also exciting now a lot of this is speculation gaming is changing constantly and it's hard to predict the future especially 10 plus years out but whether I'm wrong or right I'm fascinated by the future of gaming and I'm thrilled to see what will come next thanks everyone for joining this week I want to highlight our Discord Community we are now doing monthly challenges and weekly events all centered around building a successful Indie studio so if you are an aspiring Indie developer or just someone interested in Indie Games come join our Discord thanks and we'll see you next next week

Channel: Going Indie

Views: 560,136

Keywords: going indie, video game business, video game marketing, game devlogs

Id: pW7LwaU1xMw

Length: 23min 29sec (1409 seconds)

Published: Sat Jan 13 2024