Excellent article by Wired.com

http://www.wired.com/opinion/2013/01/how-mobile-kills-the-console-but-advances-the-gaming-industry/

Some really striking stats re: the absolute dominance of gaming on tablets. 

This is one thing I really want my fellow VGCharter's to get.  Tablets ARE gaming devices and they are the gaming devices of CHOICE.  Over they next few years (and even now) when you're wondering why Nintendo, Sony and (maybe) MS new consoles are all struggling - this is why.    People that are on forums like this, I'm sure will get the next gen consoles.    It all those other people not on these forums who won't be buying a next gen console (unless it's something amazing like Wii was in it's day).

How Mobile Kills the Console But Advances the Gaming Industry

Photo: Jon Snyder / Wired

 

On mobile devices, there are games … and then there’s everything else.

It’s not just that games are moving to mobile, but that gaming has slowly and inexorably become central to the mobile device industry. Based on statistics involving how mobile users spend their time and money, I’d argue that mobile games have reached the point where they are now the single most important activity on mobile devices.

So what does this disruption of gaming mean? For starters, it suggests a cloudy future for gaming consoles as a separate hardware platform. And it represents the first time in computing history where games have played so central a role on a general computing platform. The gaming industry can’t afford to stick to its traditional business model.

 

Kevin Chou

Kevin Chou is co-founder and CEO of Kabam. Previously, he was a venture capitalist focused on consumer services and digital media who invested in and worked closely with 14 startups. Chou received his B.S. in Business Administration from U.C. Berkeley. He was named by Fortune as one of the “Smartest People in Tech.”

Down with the Console

Consoles aren’t going to disappear overnight. But it’s becoming increasingly apparent to many in the industry that the new crop of consoles now hitting the market — from Nintendo’s Wii U and Sony’s PlayStation to Microsoft’s Xbox slated for later this year — will be the first generation of consoles that won’t outsell their predecessors.

All of these consoles represent the gaming industry’s desire to compete with the rise of mobile, Facebook, and free-to-play games disrupting their business. Yet Nintendo just cut its projected sales outlook for its new Wii U game console by 17 percent.

I actually predict that this new generation of consoles will sell 32 percent less than the last. This isn’t only because of mobile devices such as smartphones; tablets are also contributing significantly to the decline of consoles in the gaming ecosystem.

Because general computing hardware like tablets are cheaper, more powerful, and more mobile, specifically dedicated hardware like consoles will continue to lose out to them. The current generation of tablets has as much graphic richness and computing power as consoles. New, more powerful tablets also come out every year — as compared with every seven years in consoles.

Plus, you can carry a tablet anywhere in your bag, as opposed to a console that’s permanently parked by your TV. And that mobility matters … a lot.

Up with the Mobile

There have always been games for PCs, Macs, and notebooks.

But in the history of these computers’ existence, gaming never came close to the usage behavior demonstrated on mobile today. Gaming is leading in the three most important consumer usage behaviors on mobile devices; what I’ve referred to before as the “Triple Crown” of mobile usage: reach, engagement, and monetization.

sources: Pew Research Center, Flurry Analytics, App Annie, and Kabam

Reach is the percentage of people who own a mobile device that would engage in an activity such as playing games, checking email, or shopping — and gaming’s reach is 60 percent of all tablet owners. That’s almost tied with seemingly universal activities such as checking email or reading news.

Engagement is the percent of time spent (out of all usage) on the device — and 67 percent of all time spent on tablets is spent playing games. That’s striking, especially when compared with engagement in social networking: just 10 percent of total time spent (partly due to shorter sessions). Even more tellingly, time spent playing games has overtaken the total time spent watching videos, listening to music, and reading magazines or books!

Monetization involves capturing consumer share of wallet, and no matter how you look at the data, gaming wins. For example, more than 80 percent of all revenue generated last year by mobile applications — a $10 billion software industry — was from games (according to Flurry Analytics). Compared with other apps on the top-grossing charts, 76 of the top 100 grossing iOS apps are games.

Similar conclusions can be reached from other research, too. The ratings company Nielsen reports the number of people playing online games increased by 94 percent between 2010 and 2011 — the biggest jump in any mobile-related activity (including watching videos or listening to music). And investment banking firm Jefferies shared that in 2012, the installed based for iPhones (450 million) far exceeded that of consoles (240 million); but perhaps more interestingly, consoles grew by only 20 million from 2011 compared to the double growth in mobile (and that didn’t even include tablets).

Indeed, for much of the world, mobile devices have essentially become gaming platforms … which also happen to make telephone calls or enable video watching. While no one doubts we will continue to use mobile devices for things other than games, it’s clear that gaming has become, and will remain, in the top tier for the three key mobile usage behaviors. So the big shift in 2013 and beyond isn’t just mobile growth; it’s how mobile and gaming together are disrupting the digital entertainment industry.

The issue in all cases is control: consoles still win for local multiplayer and for games with anything more involved than NES-style controls, whether that's motion controls or something button-intensive.

No one is saying the controls on tablets is better.   Although the controllers on devices like Ouya will be comparible.

The point is the market is moving to mobile regardless. 

I think perhaps that blue ocean into which Wii tapped might have shrunk to the size of a lake. So much of the Wii install base might have moved to tablets and mobiles for games. I don't think gamers who have bought at least 2 generations of consoles are going to move to touch screens to a large degree. So gen 8 doesn't have the sales potential of gen 7 perhaps, but I think it has the sales potential of gen 6.

Things the consoles need are always on, and fast game boot up. People will decide to pick up their tablet and game even when sitting in front of the TV simply because they can go from blank screen into the game very quickly. But with consoles they will take a minute or more to go from blank TV screen to gaming.

Consoles as media hubs is one thing Sony and MS see as keeping their devices relevant. And I think Sony should make an iOS and Android app that makes smartphones and tablets able to interact with PS4. MS is trying to embrace tablets with smartglass, Sony needs to do the same but not try to corale people into its own tablet and phone hardware, other than preinstalling the PS app on its phones and tabs.

Consoles going down substantially isn't good for gaming given the types of games you can't play on tabs and mobiles. But it might be good for the gaming business: cheaper to develop, larger market, more monetisation options, but games will be the lesser for it.

O__o   Someone out there is actually reading all my posts?

Well spoken, er, written Rol. 

I agree with what you're saying, and absolutely there's a base (this here forum base for example) that will be true to consoles for years to come.  However, as tablets become more powerful and more Android (and iOS?) gaming consoles appear, I think they will continually drain the console pool so it becomes a ever more niche market (unable to support the very AAA experiences they've come to expect).   This won't happen overnight, it's a slow process but it's happening even now.  Kids want a tablet over a WiiU (SpurgeonRyan) for example.

Mostly I think tablets, etc. is expanding the market further than ever before and for gaming in general this is great.   It's also allowing all new players to come in and to grow into major players.  It's also allowing for a degree of innovation that's been lacking - and as you mention will continue to narrow - on console.  

I think MS sees this threat better than Sony/Nintendo has from what we know/heard has lots of innovative ideas on how to keep people coming back to it's console.  PS4 I suspect will sell less than PS3 and WiiU... Well, I'm sure you know my opinions on that.  I agree with the article that the eighth gen will sell less than the seventh and by a third sounds right but let's face it, we are all guessing, fans and experts alike.   Last time we saw a shift like this was when games went from consoles (Atari) to PCs (C64) back to consoles (NES).   After the eighth gen I don't think there will be such a thing as a dedicated home gaming console.  I'm not sure we even have that with the eighth.

For a season, they might be.  I think the current console path (ever more expensive games, ever more risk involved leading to more sequels and fewer risk taking) is unsubstanable.   For this reason, tablets/Android consoles might actually save gaming.   The big AAA productions might, might.... disappear for a while, but they'll return in another form, bigger and better than ever.  There will always be a market for those - it's just finding the balance between cost/revenue.

A good article to point out, Gamerace.

Honestly, I'm of the impression that this should be a foregone conclusion. No matter how many people are trying to scream and yell that this is impossible, it's not going to happen, etc., the march of progress never actually ends. Consoles and PCs WILL continue to exist, no question, but things will keep moving toward where all three of the big console companies are going right now: the television experience. No longer are the consoles game machines, but they are entertainment centres. Netflix, movies, all kinds of things, are available and games are just one of those things that they can do in addition. Hell, Sony's motto for the PS3 is 'it only does everything'. You don't have a motto like that unless you're trying to explain to people that it's NOT just a game machine.

When we got our first PC (a 386/20) in 1991, I was pretty damned excited for it because all I had before that was an Intellevision, a Commodore 64 and a Laser 128 (Apple II/e clone). I never really concerned myself with consoles because PC gaming was really where it was at. PCs used CD Roms and had a very unique and fun series of games that lasted quite a long time. That is, until the PS1 got started and got unique games of its own. Nintendo continued its rise, as did Sony, until, before I knew it, PC was starting to feel like it was taking a back seat to consoles. I started seeing that when I went to Future Shop and realized that PC gaming went from an entire aisle to, more recently, a lonely little section mostly full of AAA game releases and MMOs.

This, to me, is the standard evolution of becoming mainstream. The technology isn't there to basically have full console experiences on tablets yet. But give it ten years and I doubt anyone could honestly see what's coming.

Mobile gaming might advance the gaming industry, but only in all the wrong ways.

I've been wanting to write a similar thread for the past few days but never did. I personally think it's worse than tablets killing consoles. The entire gaming industry is imploding on itself. Revolving door jobs, budgets getting out of hand, little returns. The manager at the local EB Games told me that they only get 4 dollars from new games, which is why they've been pushing used games as much as they can. 56 dollars gets split between publishers, developers, and licensees. Developers see 8 dollars from games, licensees see 8-12, that leaves a little less than 40 dollars per game going to publishers, yet they still can't balance books. Tablets aren't killing consoles, publishers are.

Last gen the PS2 sold 152 million + Xbox 1 sold 25 million + Game Cube sold 22 million...

That comes to 199 million consoles sold LAST GENERATION....

THIS generation the Wii has (so far) sold 99 million... The Xbox 360 has (so far ) sold 74 million..
The PS3 has ( so far ) sold 72.5 million..

THIS GENERATION COMES TO 248 MILLION CONSOLES SOLD ( SO FAR ) !!!
This means this GEN has outsold last gen by 30 million consoles so far !!!!

JUST because the console market share isn't  growing in proportion to the population in the same percentage as the past... MANY FOLKS ( including the original poster ) want to believe ( or assume ) the market share has actually shrunk. It has not shrunk !!

It's time to quit listening to the 'experts' and start thinking and looking at the VERIFIABLE numbers I have posted.

It doesn't matter if the market share is growing slower on consoles.. Its still growing ( and even growing in a bad economy )....

Handhelds and smartphones will have a niche of their own.. BUT that niche will not in the near future replace playing on a 73 INCH Wide Screen TV !!

ENUFF SAID !!!