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Cost-cutting consoles

Zeitgeist finally got around to seeing “Elysium” last night. Typical of the current climate in film distribution, it was disappearing from all of Zeitgeist’s local screens in central London, after a mere 3-4 weeks of release. The above trailer screened before the film. Videogames have been trying to sell themselves as films for years, since the likes of “Metal Gear” and “Max Payne”. (The picture becomes even more blurred as more videogames attempt to make the transition to feature franchises). This tactic was nothing new, moreover it was somewhat underwhelming. The graphics looked pixellated, the movement clunky, and any sense of verisimilitude was lacking. It is difficult to put a finger on what exactly the problem was, but patching polygons together is not the same as making all the parts interact with one another. It was surprising, given that the game is to be made available on the as-yet unreleased Playstation 4, a console which, going from the launch event months ago, is capable of some stunning graphic simulation. The market has gone for longer than usual without a new stream of console launches, so it seemed puzzling that not all that much seems to have changed.

It was somewhat reassuring then to read today The Economist’s Technology Quarterly supplement, which featured as its lead article an overview of the videogames industry, and how high costs have produced diminishing technical returns in the latest bout of releases from Sony, Microsoft and Nintendo. The article states the newest consoles look “surprisingly underpowered”:

“At previous console launches, executives have boasted about their boxes’ whizzy technological innards. Sony in particular was a dab hand at this sort of thing, coming up with names like “Emotion Engine” and “Reality Synthesiser” for the chips that powered its previous consoles. But this time neither Microsoft nor Sony seems very keen to talk up the technical prowess of their new boxes… new consoles will be merely catching up with the current state of the art, rather than defining it. Both consoles… are, for all intents and purposes, ordinary PCs in fancy boxes.”

The market hasn’t found a way to substantially raise prices on games, while at the same time the cost of developing them has “ballooned”. Moreover, due to rising costs of customised chips and increasing competition from those with lower fixed costs (think videogame mobile app developers, and Ouya), Sony and Microsoft are now using standardised chips in their consoles.  The article was also keen to note that graphics are no longer the be-all-and-end-all of a console’s power and reputation (as it was in the days of 32 and 64-bit machines). Indeed gaming itself is argubaly no longer front and centre of console strategy, as manufacturers seek to diversify into other areas of entertainment. Just in time as well, as a recent report from Accenture predicts the end of single-use devices.

UPDATE (15/9/13): The New York Times points out that often the best games take a while to appear on new consoles, with Nintendo devices tending to be the exception.

  1. September 13, 2013 at 5:45 pm

    I think the prediction of the end of the console era is still far off, only because the sales of these machines are nearly sold out in all of their pre-sale quantities. Gaming remains very popular, as presently iPhone and other game and app makers are unable to offer a comparable console-gaming experience. Also worth considering to the point of your article, while the source eludes me at this time, is that Microsoft never made any money on its 360 console. It seems many of these tech companies subsidize their gaming divisions considering their monumental losses. As per game developers themselves, few ever see hits like Call of Duty, or the Halo franchise. And so as is the case in Hollywood, the industry has found itself in the arena of tent-pole making. As per independent releases, arcade features on both consoles offer enough alternative content. But it will be interesting to see if game and console makers in their zeal to be more like the movies also follow in their financial foot-steps. It seems that financial inevitability may make that the case…in which case the diminishing returns of the console era may finally become more apparent. Great article as always.

  2. davidllewelynjones
    September 14, 2013 at 12:40 pm

    Thanks for your comment!
    I do believe that console sales are suffering from lower-end gaming options, and it’s for this reason as well as costs that you’re seeing the proposition of a console diversifying. If they weren’t concerned about their position, they wouldn’t be doing this.
    Good point about following in financial footsteps, let’s hope not.
    Thanks for the compliment too, keep reading!

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