Guest article: “The demise of games consoles as we know them”

What I love about alainveuve.ch is the constant stream of feedback. You, my dear readers, comment, send me e-mails, tweet me incessantly. This results in a lot of new and great things. From collaboration to loose exchanges. I got to know Stefan Fritz during one of these exchanges and realized that there are many parallels and similarities. One of these parallels is that Stefan also runs a high-quality blog. Reason enough for a second guest post this year.

---

From Stefan Fritz

It all seems so simple in the oligopoly world of games consoles. There are three serious players: Sony’s Playstation PS4, Microsoft’s Xbox One and Nintendo’s Wii U. They divide up the market and bring out a model with new features every few years. Amazingly, this clearly defined order has existed for over 10 years.

(Reading time: 4 minutes)

Professional games and entertainment

The more technically sophisticated professional games are available for PS4 and Xbox One; the Wii U appeals more to younger children and families. In addition to games, Sony and Microsoft devices can also be used to watch videos and listen to music – the complete entertainment program for the living room. The revenue models are clear: Sony and Microsoft invest in the latest hardware technology and sponsor the devices. Every game provider that wants to get onto the platform has to pay money to Microsoft and Sony. Current game titles cost 50 to 100 euros. Sometimes even more.

The PC universe for the discerning

The PC universe exists parallel to the closed console world. This is where the freaks hang out who are looking for more than the standardized mash of the big three. In communities, they discuss specialties such as the best graphics card (often for over 1000 euros). The offer includes many titles that are also available for consoles; due to the lack of restrictions imposed by the platform operators, the selection is greater here.

Exploring new worlds together

In massively multiplayer online games (MMOGs), players immerse themselves in virtual realities together. Strategy, role-playing or virtual battlefield games are highly addictive because you don’t play alone against the computer, but explore new worlds together with other players.

Smartphones are catching up

Games have long been available on smartphones and tablets. This world is dominated by Google’s Android and Apple’s IOS. For many years, these games lagged far behind consoles in terms of graphics and sound quality. However, the increasing graphics performance of mobile devices is leading to a convergence with the offerings on games consoles and mobile platforms. Normal game titles are significantly cheaper at 2 to 10 euros, as they do not have to support the platforms financially.

Sony’s last stand?

As the penultimate development in this game of games so far, Sony is attempting to displace the smartphone gaming world for a few more months with the mobile Playstation Vita. However, the IOS and Android platform giants are already pushing into the living room entertainment world of console providers with Apple TV and Android. It will probably be a hopeless battle for Sony.

Impressive graphics and new concept

Consoles are now facing a death blow from a different technological direction and a new business model: Nvidia, a well-known manufacturer of gaming graphics cards, has launched the Nvidia Shield for 200 euros, a “console” on the market that is actually a multimedia hub like those from Apple and the like. Instead of buying games and installing them locally, they are streamed from Nvidia’s data centers using the “as a service” subscription model. You pay for the service of using the games. And not just in HD, but also in 4K quality with a fast internet connection (50 Mbit).

A subscription as a new star in the gaming sky

The device disrupts the order of an entire genre and leads to its demise. Until now, it was the case that you could play a little on your cell phone or tablet, but as a professional you would use your gaming PC or a console. Now you no longer need an expensive special device, but a multimedia hub and a new subscription for gaming alongside Zattoo, Spotify and Netflix. This year, professionals will still need an Nvidia Shield, but next year a “normal” Android or Apple TV will certainly suffice.

Conclusion: Software, platforms and “as a service” business models are not only mercilessly devouring old industries in the real world, but also new technological genres of the last 10 years.

Stefan Fritz

is the founder and Managing Director of synaix. synaix transforms the IT operations of innovative SMEs and large corporations into the cloud and builds scalable solutions for digital companies worldwide.

As an expert in digital platforms and “as a service” models, Stefan writes about the further development and shaping of the digital society on his blog stefanfritz.de. He supports companies and start-ups in turning disruptive ideas into forward-looking digital business models.