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Soundwave said:

The problem all/most of this controller's benefits melt away if you actually use it the way it will be used in 99% of games ... imagine it resting in your hands, now look UP at your television. Now your LCD and all that is gone. You're going to force the consumer to keep looking down at the display to be able to see what commands they're pushing.  

Within 20 minutes, I think most people would be rather playing with this:

The aspect ratio is also very awkward, it needlessly chops the left and right corners of the gameplay area off and it doesn't even look ergonomical. The Vita shape would be much better, like this person mocked up:

https://www.youtube.com/watch?v=udkU101fFOk&feature=youtu.be&t=33

In thoery it can be an issue but in practice it can be a lot more simple as no game is going to have loads of situations in seconds of each other that will require multiple different layouts to confuse people like that, players will also be eased in and a game will likely have a few relevant set ups for it's experience. They will become familiar with layouts of situations by the time the game gets going, for example in a shooter players will be made familiar of layouts of when you're in and out of cover, if an extra input comes up in a situation it would likely be right next to another relevant input to make it easy to memorize for the situation, that's when muscle memory starts coming into effect.