‘The addressable market for consoles will be halved.’
As we move further into this generation, it becomes clear that upgraded and iterative consoles will be a thing. Rumblings of Sony’s PlayStation 4K, a mid cycle revision of the PlayStation 4 that substantially adds to its capability, have already started leaking, and Microsoft have themselves stated that they wish to launch iterative hardware going forward.
Speaking to Michael Pachter, well known analyst at Wedbush Securities, recently, I asked him what he thinks of these shorter upgrade cycles, and iterative hardware- is it a ploy to keep console gaming relevant in a rapidly evolving world?
“There’s always going to be a place for [consoles], which is why I said that, you know, I think the addressable market for consoles will be halved, but they’ll always be a reason for some people to buy them,” Pachter began. “I’m just talking about, you know- look at the Nintendo DS and 3DS- sales have been cut in half, because a lot of people who bought the DS are now playing games on their phones. And they are happy with that.
“And the fact is that in 2016, there are probably a billion more people playing games on their phones than there were in 2006- so the addressable market has expanded dramatically. All I am saying is, and this is where Nintendo is going, if you offer an experience comparable to DS and 3DS on your phone, you’ve got a billion people who will look at it, not 100 million- so the big opportunity is there.”
This assault by smart devices is what has led to a change in strategies by the big three, Pachter believes. This is what has led to new strategies by Sony, Nintendo, and Microsoft to stay relevant.
“I think everybody sees it. And Sony will try to stay relevant, just like Nintendo is trying to stay relevant. And what Sony is trying to do is offer streaming services. They are trying to offer television, which is why we have PlayStation Vue. You know, they are trying to offer a lot of different things, that their box is different for. And of course, there will be the PlayStation VR.
“And Microsoft is making Oculus work through Xbox- they’re trying to stay relevant, and for a meaningful number of consumers, they’ll all stay relevant. I’m just saying, if the next generation consoles launch, and the box is $300-$400, and the publishers all say, ‘we’re gonna be on the Xbox Next or whatever it’s called, and PS5, but you can also play that same exact game, but without a console, then some people will say, ‘well screw that, we’re not buying a console!’ And I don’t think anyone can stop that- it’s in the publisher’s best interests to allow their content to be enjoyed anywhere,” he concluded.
On the whole, I think he has got this right- as I said myself before, the market is changing, and consoles need to evolve with the market. If upgradeable consoles is what it takes, then so be it.