LAS VEGAS — Does the world really need another gaming console?
That was the first question posed today at a gaming panel hosted at CES, sparking a lively dialogue among three industry veterans.
Richard Huddy, Chief Gaming Scientist at AMD, said the answer to that question is “absolutely yes” — even though there’s plenty of competition with the classic consoles from Microsoft, Nintendo and Sony.
“There are some people who maybe thought this generation of consoles would be the last — and whether we even need this generation? Yeah, absolutely,” said Huddy. “People love playing games in all sorts of ways, and there is an opportunity to create a new way to play games.” That very well may be on consoles, he said.
Jason Rubin, head of studios at Oculus, agreed with that assessment, saying that a console could emerge if it ushers in a new era of gaming.
But Michael Pachter, research analyst at Wedbush Securities, disagreed. He said that consoles are “nearing the end of their life cycle” — and then unleashed on how the big three console makers will fare in the future.
“I don’t think we need consoles at all. I think we do today, because they provide that microprocessor that is fast and connected to your television,” he said. “But I think in the next five years, you are going to see the content makers embrace their high-quality fast microprocessor games on any device, anywhere.”
Pachter said that phones and tablets will catch up with consoles, and as soon as that happens consoles are unnecessary.
“No, I don’t think we need it, and more importantly there is a business model reason to bypass the console, because the publisher will make more money if you play off-console,” he said. “I think the opportunity is immense, and if you bypass the console — you expose your game and content to anybody who has any type of device with a microprocessor.”
That means, the market will go from 250 million game-playing consoles to half a billion people with smartphones and tablets, opening a huge new market for top gaming titles.
Pressed on whether we are currently seeing the last-generation of consoles, Pachter bluntly assessed the prospects of Nintendo, Sony and Microsoft. He said each company will give it at least one more shot, with Nintendo keeping at it until it runs out of cash, hanging on desperately to its idea that the hardware and software must be conjoined. In his view, Sony and Microsoft have a far better chance to survive, but at the end of the day it will be the content creators that are the big winners. Here’s more of what Pachter had to say:
Nintendo: “First of all, Nintendo will never give up until they are out of business, and they have $8 billion or $10 billion in cash, so they are not going out of business for, god, I’d say 20 more years. They will keep beating their heads against the wall and bloody themselves, and they will never figure this out until they get new management. The current CEO, no way. There will be at least one, and probably two or three more Nintendo consoles.”
Microsoft: “Microsoft is different. They just created a Windows 10 division and transferred over a dozen people from the Xbox division, and there is a reason for that. Because they are going to try to integrate gaming into all Windows. They will come up with something, it will be a Surface Pro 7 or something. There will be another console from them.”
Sony: “I actually think Sony gets it, shockingly, because I don’t think Sony gets very much. But they do get this. Their whole thing with PlayStation Now and PlayStation TV, those are kind of off-console gaming platforms. That’s big for them, because they didn’t invent the console business, but they were an early beneficiary. Everybody is going to try it one more time.”
That analysis led Jason Rubin of Oculus to theorize that the big console makers may not be that poorly positioned after all.
“In the past, the things that we said were going to kill the console, but didn’t were all bad for Sony and Microsoft. Now, the things that may or may not kill the console, are actually potentially good for Sony,” he said. “If PlayStation Now is successful, that may be a better business for them in the long run than actually shipping a box. And they may not lose any of the market strength that they have in the ecosystem through that.”