Are Gaming Consoles on the Verge of Extinction?

The gaming industry is constantly evolving, with new trends and technologies emerging every day. In recent years, the way people play games has changed dramatically, from buying physical copies to downloading games online and playing on mobile devices. At a recent IGN Live event, industry experts Shawn Layden, Van Burnham, and Michael Pachter shared their thoughts on the future of gaming consoles. Layden, a Tencent advisor and former PlayStation executive, believes that consoles are facing significant challenges, but this is not a new phenomenon. "The global install base for consoles has never exceeded 250 million," Layden said. "During the pandemic, revenue increased by 20-25%, but this was largely due to existing gamers spending more money, rather than new players entering the market." Van Burnham, author of Supercade: A Visual History of the Videogame Age, thinks that consoles will play a crucial role in creating immersive gaming experiences, such as those found in Holodeck-like environments. However, she notes that this technology is still in its infancy, and consoles will need to evolve to meet the demands of these new experiences. Michael Pachter, a Wedbush Securities analyst, believes that consoles are not going away, but each successive generation will be smaller than the last. He predicts that developers will choose their target audience based on the hardware they release games on, with the best experiences available on consoles. "The convergence of technology is interesting, with small screens becoming increasingly powerful," Pachter said. "Microsoft recently announced three new consoles, including two digital-only models with 1TB hard drives, which will likely be used to promote Game Pass and attract new customers." While mobile platforms have improved significantly, allowing players to enjoy AAA games like Assassin's Creed Mirage and Death Stranding, consoles still offer a more enticing proposition due to their hardware capabilities. "Nothing can replace the experience of playing on an 85-inch 8K OLED screen, with a deep narrative and immersive gameplay," Burnham said. "This is what differentiates console gaming from PC gaming, which is a distinct experience." One major issue facing the console space is the high cost of producing AAA games, which can take years to develop and cost hundreds of millions of dollars. This has led to a more risk-averse industry, with companies focusing on established IP and genres rather than innovating and taking risks. "We need to lower the entry point for high-end content and bring more variety to the market," Layden said. "The PS2 era was a great example of this, with a wide range of games and genres available. Now, we see most big games falling into familiar categories, which is not how you attract new players." Streaming has been touted as a potential game-changer for the industry, but it has yet to deliver on its promise. Layden notes that good, high-speed internet is still a major limitation, and Burnham points to the failures of OnLive and Stadia as examples of the challenges faced by streaming services. However, Pachter believes that streaming will eventually dominate the market, but not replace consoles. "We will continue to buy consoles or powerful devices for multiplayer gaming, as latency is a critical issue," he said. "Single-player RPGs can be streamed, but multiplayer games will always require a dedicated device." The rise of metaverse platforms, such as Roblox and Fortnite, has also changed the gaming landscape. These platforms offer a range of experiences, from games to concerts, and have attracted massive audiences. However, Layden and Burnham believe that these platforms are not a threat to traditional console gaming, but rather a separate category that offers something unique. As the gaming industry continues to evolve, it will be interesting to see how consoles adapt to new technologies and trends. The future of gaming may involve more scalable experiences that can be played across various devices, with the potential for new business models and innovations to emerge. "You can consume film entertainment on your phone now, and I think games will follow a similar path," Pachter said. "The experience will be adapted for different devices, and we will play games everywhere." The full panel discussion is available to watch below.