Opinionated: The Death of Gaming Consoles

Gaming’s big business, and companies have been locked in a veritable gaming ‘cold war’ with each vying to produce consoles that would not only blow our tiny minds but also the competition out of the water.

Interactive entertainment first came into the public consciousness when Ralph Baer released the Magnavox Odyssey in 1972 into the US market. Primitive, ugly, but nonetheless the progenitor of what would become a global cultural phenomenon. Ralph had no idea what opening this Pandora’s box would lead to.

We have seen the rise and fall of gaming empires from the arcade boom to home consoles, PC gaming, handheld devices, and, most recently, cloud-based and virtual and augmented reality entertainment. In terms of global revenue, the gaming industry has surpassed every other sector of audio-visual entertainment. Over its 50-year history, the gaming industry’s full value (as of 2020) exceeds £225 billion – thanks, Ralph.

Looking back, the COVID-19 pandemic provided a sense of false hope because while it did push the gaming industry into stratospheric heights, we’ve peaked and there’s only one direction to go now: down and, post-pandemic, the gaming industry isn’t achieving the forecasted growth that was anticipated from sales generated during COVID-19. Apparently, gaming companies thought we’d not go back to work and play games all day (if only). There is an underlying significance to this, and one thing is starting to crystallise: console gaming is dying and, quite frankly, the blame lies at both Sony’s and Microsoft’s doors.

Much like the record companies, the focus is not on identifying, creating, and releasing good music; it’s about serving the bottom line and making investors happy. The gaming industry underwent a spate of consolidation with strategic acquisitions worth billions. However, it was not to make good games, it was to stay afloat because acquiring existing IP is cheaper and less risky than rolling the dice of new IP.

What is the result of that?

Dissatisfied gamers, specifically console gamers, who are now shifting loyalties to alternative providers who place their needs at the heart of what they do. While a core failing, there have been other disastrous issues that were never addressed.

A big culprit was the latest trend in live service games. Popular among younger gamers but, being a veteran gamer of 20 + years, I, like most of my contemporaries, saw it for what it was: exploitation. A form of legal pickpocketing in the form of loot boxes and microtransactions that have no value-add to the overall gameplay. I mean, seriously, what is the point of buying cosmetic gear in a first-person shooter game?!

In the console wars, the clear front runners are Nintendo’s Switch and Sony’s PS5 because of the fact they have exclusivity in their titles. If you want to play new Zelda games you’re going to have to buy a Switch. If you want to play the Spiderman, you need a PS5. So, sales are going to be driven upwards, even in the case of Nintendo where the hardware on the Switch isn’t the best. Still, its 2024 sales and overall performance was better than Xbox.

Microsoft does have exclusives but decided to bring them over to PC meaning there is no reason for PC gamers, or anyone for that matter, to buy an Xbox at all. There is a logic behind diversifying the platforms and player base, but it comes at the cost of relinquishing a lot of market share. Microsoft may be inclined to initially release new exclusive titles on its console systems before making it accessible to the PC but there is no indication that this will happen or is being contemplated.

That said, there might be a method in the madness because if you look at the market trends over the last few years, it is mobile gaming that leading the way because it offers something that people want: entertainment on the move.

The applications themselves are not onerous on storage space (as compared to triple-A titles on consoles) and there is a lot of variety including the ability to mount your phone on a controller and it can be used to experience AR/VR gaming. Apple, Netflix, and Google are taking over in this space because they offer good quality free-to-play games. Some are subject to microtransactions, but others fit within the subscription package. There is also the opportunity to give new game developers a chance to release new games which consoles do not have the infrastructure to do so effectively because they are so constrained by meeting financial targets.

Microsoft may be intentionally shifting away from consoles altogether in favour of developing sophisticated hardware to run ported versions of the console titles on mobile devices. It’s unlikely that the Microsoft Lumia will be able to run Gears of War in its current state but it’s a step in the right direction. Similarly, Sony has a catalogue of smartphones. Likely a lot of investment will be needed to have the Xperia capable of running God of War hard but the notion that a device can do that is certainly but not inconceivable. If you look on Apple App Store now you will find Alien: Isolation, the GTA series…

I do think we are looking at the beginning of the end for console gaming and it’s not because we have a hardware issue. Not really, overall, I think we’ve perfected it. But like I said: we’ve peaked. Moreover, gamers are looking for new ways to be entertained something akin to Charlie Brooker’s “Playtest” in his Black Mirror anthology save the deadly consequences.

The point is that interactive media is developing, and gamers want new ways to consume it. To avoid going the way of the record companies, console gaming will need to adapt, or they’ll die.