The Future of the Video Game Industry
Change Is Scary
The news of Microsoft and Xbox’s plans to expand their games to more platforms led to many reactions, including a debate about where the industry is headed. This has been a debate that has only grown in size and seems to become a subject around social media with each passing day. It’s not just Microsoft’s moves either. With the rise of digital distribution, subscription services, and even Apple’s recent accomplishments of getting some major AAA titles on the iPhone - people have a lot of questions about what’s happening to the industry they grew up with. This a subject I have personally been obsessed with. And for my first article back after dealing with sickness, I wanted to tackle it.
Now before I continue let me get some quick things out of the way. This article will contain subjects that I’ve noticed in gaming social media circles can lead to some heated and passionate opinions and debates. I want to make sure people understand that this is an analysis of where the industry is headed and some of my takes regarding that analysis may lead to disagreements. Some of this analysis contains critiques of gamers and the industry at large, so there will be things you may disagree with in a big way. But, this is my article with my analysis and opinion. You have every right to see things differently in this debate and your opinion matters in what is a time of major change. So with that out of the way let’s get to some ways I see the industry evolving.
Plastic Box Wars
This is a subject that I’m seeing more and more gamers agree on. The days of gamers screaming at each other about one system being the best and looking at console sales are over. Sure, you have people who still partake in what I call plastic box wars. You also can still have an interest in the sales of a console and how that affects the brand and games of that console. But for the most part, most gamers are no longer judging consoles by system sales and obsessing over who is number one. If anything more and more gamers are owning more than one console. While some choose to stay within one ecosystem (and that’s perfectly okay), more video game consumers are buying multiple systems than before and can acknowledge the pros and cons of each.
The Video Game Console and Generations
We also are seeing that the importance of the video game console is waning. Sure, dedicated game consoles will continue to be the main way consumers play video games. However, the industry is seeing the drawbacks that they have and I would argue they could be holding the industry back from expanding. This is a subject that can draw heated reactions.
We forget how young the industry is and that most gamers today specifically grew up with the industry as it was getting its footing. Because of this, most gamers have been used to console generations, and every 6-8 years it all starts over with a new box. We are used to exclusives, platform holders, graphics jumps, and franchises sticking to certain brands. Because we grew up with this, the idea of these concepts changing scares us and feels almost like an attack on our childhoods because, again, we grew up with the industry.
The problem is this model, which has been with the industry since the launch of the early home consoles in the late 70s, is becoming less viable to expand the industry and in business. Consoles are tied to the hardware that limits the audience a game can reach, they are sold at a loss in the first years of its life, they provide an immediate barrier at entry that a Blu-ray player or a book doesn’t have, and they are becoming more and more expensive for the manufacturer and consumer. This brings up a whole other discussion regarding video game preservation that I would argue consoles make challenging as well. But that’s an issue that I’ll tackle in a future article.
I believe that consoles are becoming less important for companies. While we are nowhere near the technology yet, cloud gaming will eventually catch up and become a new way to access your games. When this happens, it takes away the idea of having to buy a specific box for a high price. And yes, you don’t technically own those games, but quite frankly the normal consumer isn’t going to care about that. That doesn’t mean you shouldn’t be concerned about the future of ownership in gaming, I’m just stating that the everyday consumer won’t be out there creating a massive collection like most hardcore gamers. Add in smartphone chips getting better, generational jumps getting weaker, consolidation of resources, and video games becoming accessible on multiple devices, and the consoles will become more niche. They aren’t going anywhere anytime soon, but I see a future where they matter less and could become more of the hardcore gamer’s device.
Digital Distribution and Subscriptions
If there is anything that will rile up a gamer on social media, it’s the idea of gaming going all digital. There’s also the issue of subscription services like Game Pass and how that affects the industry. This is a subject that I’m mixed on. For starters, I have gone all digital except with the Switch. I acknowledge the drawbacks that come with going all digital, but I have made that decision and I’m comfortable with it. I also have had bad encounters with gamers online who are dedicated to only sticking to physical and act like bullies once they find out you see things differently. However, I also believe a physical option should always be available until we can find a solution to digital storefronts and how much power they have to take a game away from the consumer. In reality, this entire debate is hidden as another issue. This is an issue I believe is the number one problem with the industry overall, and that’s preservation. I will write an article in the future that will try to tackle that.
Digital-only future is coming, but I believe it’ll come with a saving grace. I believe the PS6 and the next Xbox will be all digital. But physical games will be an option that you can grab with the payment of a disc drive you can add on. What happens after those systems however could be truly digital only. This goes to my theory that we are living in what future historians will call the digital revolution. It’s not just gaming, but all forms of media will become more and more digital. I’m not here to support or agree with everything that entails, I’m just stating that it is coming, and while saying “buy physical” may be a good solution for yourself… it doesn’t change what future generations will be dealing with. Again, that’s a discussion for another article, but I am telling gamers they must prepare themselves for the digital-only future.
Gaming Companies
One area people are ignoring as they focus on the “big three” is what’s going to happen to video game publishers. We know consolidation is happening and major corporations want in on the video game industry. I’m not saying this as someone that’s happy about it all but as Thanos says you can run and fight it, but destiny arrives all the same. We will see more acquisitions and mergers. We will see massive corporations buy into or partner with big names in the industry to get a piece of the pie. We will see some companies look at more licensing opportunities.
Disney just announced a 1+ billion dollar investment into Epic Games. Company CEO Bob Iger even said that they’re doing this because they want to be where people are, and people are playing games. Netflix is making moves, Amazon has made moves (even if it hasn’t gone well), Comcast is teasing a potential purchase, and I think companies like EA and Ubisoft could be purchased in the next decade. There’s a debate to be had whether that will be good for the industry, but no matter what side you land on it will happen. Again, back to an earlier point, the industry is much younger than gamers acknowledge. As the movie industry aged, we saw mergers and consolidation. It makes sense that the biggest entertainment industry would eventually get the interest of the world’s biggest companies, just as it happened to the movie and music industries.
Exclusives and Platform Holders
Lastly, let’s talk about exclusives and the so-called big three (Nintendo, Sony’s PlayStation, and Microsoft’s Xbox). As consoles give way to more hardware and options to play video games on, the idea of three all-powerful platform holders will begin to shrink. I believe that this is the main reason Microsoft has slowly opened up Xbox exclusives to come to its rivals. I think Phil Spencer sees what’s happening to the industry and is focusing on beating everyone else to it. Again, it sounds weird to many of us because all of our lives we have been used to the same business model. But I do think in say 15-20 years, you can have multiple hardware with launchers for Xbox, PlayStation, and maybe the biggest third-party companies. The only one that may take longer to get there is Nintendo, as their IP is so rich that they’ve shown people will buy hardware just for their games. But eventually, I think Nintendo will get there.
Think of how you consume other mediums outside of video games. You don’t need a specific box to watch Casablanca or Avengers. You don’t need the Sony Music player to listen to all the music under Sony Music. You don’t need some specific tool to read The Fellowship of the Ring. There will be a future when anyone can access a game without worrying about the specific hardware required. This one prediction of mine is one I truly believe will be good for the industry. I understand why some find that concept weird or bad, because like I keep saying we have only known one way. This particular future for the industry I think is still some time away from happening, but it’s coming. When it does, it will be the greatest and most consequential change to the industry since the launch of the Magnavox Odyssey.
These are just some ways I think the video game industry is changing and what’s to come. Again, I understand some of the concepts and ideas I present here will get a lot of emotions. This is a discussion that is going to continue to be had and evolve. Heck, stuff could happen that delays, accelerates, or even changes my mind about what’s coming for the industry. If there’s one thing I think we gamers can agree with, it’s that we need to understand that the next decade or two will be the most consequential and even life-changing for the video game industry since we made the jump to 3D graphics. It’s going to be bumpy, exciting, and even have some bad moments, but again as Thanos says, “Dread it, run from it, destiny arrives all the same”.