By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Gaming Discussion - This might be the last generation ever for consoles (No joke, serious thread).

While I have been thinking about this issue for some weeks, this is the first time I'm writing it down since things appear to be taking a no way back route with the current events between Russia and Ukraine.

My point is this: New gen consoles (XBSX, PS5 & NSOLED) have been struggling to get to shelves since they launched, with some very dramatic scenarios in countries like Japan and Spain (Where I live), in which I haven't been able to see a single PS5 nor XBSX in shelves since they launched (and there are 3 big stores with big videogame sections in my city: GAME, Media Mark and Carrefour). And, with the agravating scarcity of energy and raw materials, things won't only get back to normal, but they will go worse (contrary to those that think/say that things will come back to normal at the end of 2022 or 2023).

It's been a common place to point the pandemic as the most important cause of the current inavailability of all kind of commodities (specialiy chips), sometimes adding the role of the Suez Canal blocking and the lack of specialized industries (in the case of chips) as contributors to that scenario, all of them generating "waiting lines" to companies due to the closing of industries and transport routes creating huge delays in production and shipment. But the truth is, that is only a little part of the problem. The huge one, one that is not linked to particular events but to more "sistemic" ones, is the increasing lack of fosil energy sources and raw materials (specially rare earths, but also some that used to be common not that long ago) due to our societies hitting the planetary limits in these sectors.

Semiconductors scarcity has been a trend for a while, and is not only due to these materials being rare or hard to refine/produce, or that only very few specialized plants (and professionals) manufacture them in the world: it's also that you need many other several elements to produce them. For example, water. And, for example, sand. And, for example, gas, and oil, and diesel. The vast quantities of water needed to produce semiconductors caused a severe crisis in Taiwan chip manufacturers where a big drought hit the country last year, and with climate patterns becoming more unpredictable due to climate change, more events like that could repeat more frecuently.

But the big problem now, maybe even bigger than the scarcity of raw materials (which many countries, specialy China, are buying-like-crazy and stockpilling due to them being crucial for some key industries, such as transport and military), is the rapid decrease of energy sources (specially in relation to the wildly increased demand of the last years). Conventional Oil production peaked in 2005, Coal Peaked in 2013, Diesel (insustituible for production processes and transport) did the same in 2015 and it seems that "natural gas" production may have peaked in 2018. You need all these to mine raw materials and power the industries that produce chips and consoles (along with almost any other electronic device, and even cars, washing machines and fridges, among others). And renewable energies cannot sustitute them, specially in transport and heavy machinery), nor can nuclear (Uranium seems to be near it's peak* too, and long discussed alternatives are not presenting results compatible with general use).

So, under these circumstances, and with the current geopolitical events hitting hard the production and transport lines of almost every commodity (be it due to the war itself, or due to sanctions or import/export embargo of energy sources, which has made prices soar, reducing the benefits of producers or increasing the prices for the final consumer), not many companies can sustain its bussineses models as they used. And, in the case of videogame console companies, things doesn't look very bright in the future:

Traditionaly, videogame companies involved in hardware development and production have sold their consoles at a loss since they could recover that loss via selling software. In the recent years, with bigger and more demanding software and technologies, videogame developing cost have increased: an AAA company needs to sell millions in order to reach profitability with its bigger titles. But, in a scenario where not enough consoles can be produced due to the scarcity of raw materials, lack of cheap/enough energy to produce it and other factors hitting your console output, not enough games can be sold to compensate both hardware and software development costs. And you can't sustain expensive machines such as PS5 or XBSX, and their ecosystems, de-scaling the scope of your games to reduce teams, periods and costs: these machines need AAA hits that sell on the millions to throw benefits. Moreover, in an inflactionary scenario such as the one we're living, and the one that is to come, you can't expect people to buy high price products like new generation consoles.

A very particular case is that of Nintendo: People has been speculating for years now that a Switch Pro was on the way but, in my opinion, with the current difficulties to produce new generarion consoles (or even mid gen upgrades like the OLED), not only a Switch Pro will be taken out of the equation due to the uncertainability of having a stable production capable to cover the cost of producing it via software, but also a Switch succesor will be delayed for the same reasons. I see Switch lifespan having one of the longer cicles in videogame history just because launching a new videogame console under today's circunstamces (which may extend well into the future) is too risky for the company and its investors.

So, counting on all these factors, my prediction is that videogame companies, wich are already experiencing the hardships of suporting their new generation consoles in a world hit by multiple crisis, will become way more conservative with their plans and may even discard the possibility of launching new hardware in the future. And this won't only apply to videogame consoles; I think we will see a reduction of the quantity and variety of models of PCs and other electronic devices, such as mobiles, and even cars, in the coming years: there's not enough for everyone and only the more profitables (those who can sustain production/benefits in a world where scarce raw materials and energy sources make their production prices skyrocket) will survive.

What do you think?  =)

*please understand that peaking does not only relate to the availability (quantity) of a material or energy source on earth, but with many other factors such as easiness to extract/refine, cost effectiveness of it, energy needed in relation to energy produced, etc.)

Last edited by Zarkho - on 11 March 2022

Around the Network

As long as there is demand, there will be supply.

/thread



Chrizum said:

As long as there is demand, there will be supply.

/thread

Hahaha! Good joke!



Zarkho said:
Chrizum said:

As long as there is demand, there will be supply.

/thread

Hahaha! Good joke!

It wasn't a joke.



No. We have been hearing this for years and years. There are articles from 50 years ago that say we will run out of resources in 15 to 20 years and yet we increase resource extraction and production.



Around the Network
CaptainExplosion said:
Zarkho said:

Hahaha! Good joke!

It wasn't a joke.

Oh, then it must be a lack of comprehension of how things work, because there is a lot of demand for Switch OLED, PS5 and XBox Series X but somehow supply still isn't there.



Zarkho said:
CaptainExplosion said:

It wasn't a joke.

Oh, then it must be a lack of comprehension of how things work, because there is a lot of demand for Switch OLED, PS5 and XBox Series X but somehow supply still isn't there.

It's called a global pandemic and a war in Europe.



Good, to some extent. GT 7 has shown me as well as others that modern gaming is just empty and predatory.



CaptainExplosion said:
Zarkho said:

Oh, then it must be a lack of comprehension of how things work, because there is a lot of demand for Switch OLED, PS5 and XBox Series X but somehow supply still isn't there.

It's called a global pandemic and a war in Europe.

The war happening in Ukraine didn't have any effect on global supply shortages as this has been a problem for well over a year now. But knowing what comes out of Ukraine, Shortages are about to get worse... AGAIN - YouTube it can potentially get much worse than what we already know. 

With how dependent on hardware technology the world has become compared to say 50 years ago, and with cryptocurrency and mining becoming more and more rampant along with digital items such as NFTs becoming having more value that can take a huge toll on the energy sectors, then you realize this isn't as farfetched as we might think.

Do I see all this going to crap within the next 10 years? No. But then again, in 2019, I never would've imagined a virus would bring the entire world to its knees.



I think what you are pointing to are crises of the current world order aka neoliberalism capitalism. Either the system will find a way to sustain itself for longer by changing something up or it will be upended and replaced by a better or worse system. These crises are inherent to capitalism. The system was in trouble before as well but managed to survive. Doesn't mean it will this time. So we shall wait and see. 

But focusing in on gaming, I think even if the resources are there, the refreshing of generations isn't working as well for companies anymore so they might move to the iterative smartphone like model where there is never a sharp generational switch again, at least for the foreseeable future. 

Last edited by Eagle367 - on 11 March 2022

Just a guy who doesn't want to be bored. Also