Can PS5 and Xbox Scarlett Truly Afford to be Discless?

The whole digital only fantasy is never coming true, sorry.

Posted By | On 21st, Jul. 2018 Under Article, Editorials | Follow This Author @Pramath1605


A recent report published by analyst firm Piper Jaffraywritten by analysts Michael J. Olson and Yung Kim, confidently predicted that the video game market will go fully digital by 2022– right around the time that we can expect the PS5 and Xbox Scarlett to have replaced their predecessor consoles fully on the market. This report, then, once again raises the specter of consoles that might be fully digital, this time for the next generation Xbox and PlayStation products. It also raises, once again, the consideration that the gaming market will transition to being fully digital, with no consideration or concession whatsoever, made for physical media.

As has always been the case, the report is alarmist, reductionist, and frankly, ill-informed, using only present trends, projecting them outwards with no considerations for market perturbations, and using an extremely small sample size to base the report off of at that. As has been the case since time immemorial, reports on the death of the market for physical games are greatly exaggerated- no different than reports that proclaimed that console gaming is on the way out thanks to the rise of mobile gaming at the dawn of this decade, or the reports by analysts confidently proclaiming that Nintendo has no place in the hardware market, and the NX will fail months before the Switch launched on the market and broke all records.

nintendo nx

"These reports are no different than reports that proclaimed that console gaming is on the way out thanks to the rise of mobile gaming at the dawn of this decade, or the reports by analysts confidently proclaiming that Nintendo has no place in the hardware market, and the NX will fail months before the Switch launched on the market and broke all records."

Literally some thought and awareness of the gaming market will reveal why physical games are not ever going to be fully extinct, and why the next PlayStation and Xbox especially cannot afford to eschew physical media fully. Let’s start with the basics, first- internet infrastructure.

Games on Xbox One and PlayStation 4 already touch 100GB with alarming frequency, and this is not a number that is going to go down next generation. Nintendo aside, every generation has seen the file sizes for games go up, almost exponentially- in fact, increasing file sizes for games has been behind some of the most important events in console gaming history, from the move from cartridges to discs (and the ensuing domination of PlayStation, at the expense of Nintendo 64), from the transition to DVDs (and the ensuing domination of PS2, and the death of the DVD-less Dreamcast), to, ultimately, the move to Blu Ray for modern consoles. We can safely expect 100GB games to be the average for next generation, as opposed to being the outlier. Physical media to deliver 100GB of content, either compressed or as is, already exists- high density Blu Ray discs, UHD Blu Rays, new disc formats developed by Pioneer, and more.

What doesn’t exist is the internet infrastructure to support 100GB plus downloads for every game. Consider the United States- most internet plans in the country have data caps (typically topping out at 500GB a month, meaning buying a single game takes away 20% of your data allowance in one fell swoop); additionally, the recent rulings in the United States that abolish net neutrality, and lead to preferential treatment for data traffic, are only liable to make game downloads even more expensive for the average person (unless, I am sure, they subscribe to some nonsense “Gamer Ready” plan proposed by AT&T or Comcast). At this point, buying a game becomes far more expensive than just spending $60- you are constraining your entire internet allowance each time you buy a game. This doesn’t consider the data used up when you download patches. Or the data used up when you game online. Even re-installing a game you previously had would be ~100GB gone in one go. It’s insane- the internet infrastructure is flat out not equipped to handle download only consoles in the United States.

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"What doesn’t exist is the internet infrastructure to support 100GB plus downloads for every game. Consider the United States- most internet plans in the country have data caps, typically topping out at 500GB a month, meaning buying a single game takes away 20% of your data allowance in one fell swoop."

And that’s the United States, the biggest market for console gaming in the world currently. Let us, for a moment, stop to consider other markets. Console manufacturers want to expand their ware to other markets, such as Mexico, Brazil, Russia, China, and India- markets where internet connectivity is far lower than the United States, and where putting out a digital only console automatically locks it out of the bulk of the market right from the get go. Such a console, then, not only limits its sales potential in the US, it limits its potential in most markets around the world.

Even if we consider a market with healthier internet infrastructure and penetration, such as the European market, a digital only console conceptually falls apart. Even in a market like Europe, there’s a major market for physical games. For instance, did you know that the European mainland is one of the only major gaming markets in the world where PC games maintain a major presence at retail? Even with the pervasiveness of Steam and Battle.net, you can walk into a games or electronic store, and pick up the latest major PC release on disc, if you want to. Even with a platform that has made such strides towards all digital games distribution as PC, Europe hasn’t let go of physical media- what reason do they have to do so for consoles, exactly?

The final aspect that this fantasy of digital only console that analysts so often seem to go moist over is that retailers wont stock consoles that they cannot sell games for– this part is important. Game consoles are sold at minimal to no margin, retailers don’t actually make much, if any, money on a console sale. The incentive for them selling a game console is to be able to sell games, accessories, and used software for it- those are high margin products for them, they’re what gets them the bulk of their profits from game sales. If they can’t sell games or used software for a console, which they would not be able to for a digital only console, then they would flat out refuse to carry or stock the console- what do you think happened with the PSP Go back in 2009-10, for instance?

"If retailers can’t sell games or used software for a console, which they would not be able to for a digital only console, then they would flat out refuse to carry or stock the console- what do you think happened with the PSP Go back in 2009-10, for instance?"

So yes- as much as analysts, game publishers, and hell, even console manufacturers themselves, want an all digital future to happen for consoles, it’s not happening. It literally cannot happen, because the internet infrastructure prevents it, market realities prevent it, and logistics of the situation prevent it. Games are not songs, books, or even movies- those top out at a few GB at most. For games, a 500GB hard drive isn’t enough. The realities of gaming as a medium are entirely different than for anything else.

Which is why the PS5 and Xbox Scarlett can’t afford to be discless- at least, not if they want the consoles to actually manage to reach, well, any part of the market.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.


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