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Saturday, October 15, 2011

Top Reasons Next Gen Hasn't Started Yet

Now that Nintendo has jumped the gun and announced their next generation game console called the Wii U, there is a ton of speculation as to when Sony and Microsoft will follow with their next gen systems. In past console generations, the average time of a console cycle was about 4-5 years. This fall, the Xbox 360 and PS3 will be 6 and 5 years old respectively which is well past that established life cycle. Yet, both the PS3 and Xbox360 are still enjoying healthy worldwide sales, have plenty of games coming in the next 12-18 months, and still have not reached the magical price point of $199 (max price for all Skus) which is traditionally when most systems see their largest sales. How is it that these systems are able to be relevant for so much longer than their predecessors?

Here are my top 5 reasons the next generation of game consoles is taking so long:

5. TECHNOLOGY IS CHANGING TOO FAST
Tablets, 4G, wireless display, motion controls, 3D, networking, digital downloads, APUs (GPU integrated with CPU), and cloud computing. These are just some of the significant technologies that have become common in the 5-6 years since the Xbox360 and PS3 were released. All of these technologies can have profound impacts on video gaming. The hardware has to be made in such a way to enable some or all of these technologies in the next generation. The difficult question for Microsoft and Sony is which ones are the ones to bet the future on? Should the next Xbox use physical media or be all digital downloads for game distribution? Should an updated Kinect be the primary user interface to the system saying goodbye to the physical controller for good? Should Microsoft or Sony follow Nintendo's innovation and leverage a tablet-like controller interface to expand the ways users can interact with the console? Should the PS4 use Blu-ray again? Will 1080p full 3D graphics be the target for next gen? How can the next gen consoles expand on social networking and media sharing? Is OnLive really the future of video games? These are all very difficult questions that both Sony and Microsoft must answer before committing another 8-10 years and hundreds of millions of dollars in a new system. If they bet wrong, there will be a steep price to pay.

In previous generations, updating a system to the next generation was pretty straightforward. Simply update the processing power of both the CPU and GPU to enable new uses of technology and you were pretty much done. However, today the expectations for a game console has grown immensely and simply increasing the processing power is not enough. With so many variables, what-ifs, and volatile technologies in the mix, it's reasonable that Sony and Microsoft need more time weigh them all, observe their impact on the audience, and work to fine tune some of the less polished ones.

4. HARDWARE TECH ISN'T AS IMPORTANT AS IT USED TO BE
How many readers are old enough to remember the old "Genesis Does" or "U R NOT E" gaming commercials from the 90s? If you can think back to those days, all you heard or saw in ads was how many "bits" the hardware had, how many polygons it can push, or how advanced the system is (remember those "It's Thinking" ads for Dreamcast). Kids argued in school how much better the Genesis was with its 16-bits compared to the NES with only 8-bits. Or how awesome the PlayStation was because it was 32-bit and used shiny new CD-ROMs for games. For gamers then, the most exciting thing was seeing the leaps in technology with each new system adding things like full-motion video, voice, and 3D graphics. Oh the good ole days.

In 2011, consumers are much less interested in the nuts and bolts of a system and more concerned with what kind of experience it gives them. This is true not only in the video game space, but across the board in consumer electronics and technology. If nothing else, the Wii proved that people are less interested in technology and graphics than they are fun and accessible experiences. Xbox Live is a phenomenal success and is the primary reason why Xbox360 has such a large sales lead over the PS3 in the US. Xbox Live offers an "experience" that just cannot be found on the other consoles and many gamers are still buying 360s to be a part of that community. The rise of the MP3 and digital downloads again proves that consumers care more about accessibility and convenience than quality alone. No doubt Cd's, SACDs, DVD-Audio, and Blu-Ray offer superior experiences than anything you can download today, but consumers are much more interested in having the content come to them and travel with them wherever they go. The IPhone and IPAD set the world on fire not because it offered a cutting edge CPU or GPU under the hood, but because it provided a innovative, easy to use, and unique user interface that appealed to a large audience.

The changing times would have certainly made Sony and Microsoft at least hesitate before approaching the next generation. Now they have to invest a lot more resources that used to be used to increase processing power to delivering a powerful and innovative user experience. They must invest not so much in hardware but in software in order to be successful next gen. This is a fundamentally different paradigm for the hardware manufacturers to work in and there is likely a time overhead with figuring out the new approach.

3. GRAPHICS APPORACHING DIMINSIHING RETURNS IN HD ERA
I know that of all of my reasons on this list, this is likely to be most controversial and flame worthy. However, I think it is still a valid point if you can hear me out. There are two main ideas embedded in this statement:
A) That the graphics of current generation hardware is good enough to be relevant longer
B) That the difference in graphical fidelity in going to next generation is not going to be as large as before.

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