DonFerrari said:
Shadow1980 said:
Consoles are one of those markets that has essentially reached the steady state part of their existence. The only thing keeping hardware sales strong over time is the periodic release of new systems, but the percentage of people in the main three markets (NA/EU/JP) willing and able to buy one has essentially maxed out. The console market showed growth in the 80s & 90s, but there's just no more room for growth unless markets outside the main three start to adopt consoles en masse.
It's a common thing with consumer electronics. For example, TVs had a period of exponential sales growth in the U.S. in the 1950s, but the growth slackened as market penetration reached near-saturation levels and the vast majority of households had a TV. The advents of color TV and later HDTV reset the cycle, similar to console generations. Still, once everyone has a TV, people will only buy more to either A) replace broken units, B) upgrade to a better model, or C) have extra screens in the house. It's kept a steady revenue stream, but not a growing one in real terms, and the period of exponential growth in TV sales died in the 60s. But if perpetual growth is what is needed for a business to be considered "healthy," then capitalism itself is terminally ill. |
I guess the discussion is market growth being almost zero, still having steady revenue stream, but increasing cost. How long will that be healthy? |
Thanks for stating what I was trying to say. You don't need perpetual growth in absolute unit sales, but revenue has to keep up with inflation to stay healthy. Video game prices haven't been doing that for a long time, while the growth in sales has stopped.
Meanwhile people still expect bigger and bigger games, development costs keep rising. Which is fine when the market keeps growing, yet now we still have increasing costs with decreasing revenues due to inflation -> unhealthy market.
@Shadow1980 I'm talking about software revenues. The hardware cycle will still reset, yet gaming revenues is where the real money comes from. The hardware doesn't make much profit, especially not with the R&D costs that need to be payed back.
