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Console Gaming Deathwatch Enters Phase Three

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By Nelson Schneider - 02/09/20 at 03:27 PM CT

The long, slow death of console gaming is continuing at its leisurely pace. The first phase was the “singularity,” in which all consoles and PC became largely undifferentiated due to the rampant multi-platforming of third-party game releases. The second phase was when consoles themselves ceased to be profitable and network infrastructure began to be the primary source of revenue for platform holders.

Recently, Sony announced that it would be following Microsoft’s example from 2016, and start releasing its first-party exclusive titles on PC in addition to PlayStation. Thus comes the third phase, the shedding of first-party exclusives and the loss of the last traditional differentiating feature of the various gaming platforms.

Back in 2018, Sony renewed its focus on first-party titles, with a corporate restructuring that placed a greater emphasis than ever on the concept of “making PlayStation the best place to play” by having stuff that gamers couldn’t get elsewhere. That same year, rotund gaming pundit, Jim Sterling, produced an interesting video about how first-parties are the only game developers who can still sink the requisite amount of money into creating a compelling, complete experience without the need for additional predatory monetization – a thesis which I refuted, pointing out that the lack of profit margins on console hardware makes big first-party titles a losing proposition.

My refutation, sadly, proved correct, with Sony Big Cheese, Shawn Layden, justifying Sony’s decision to flog its first-party titles on a platform beyond PlayStation as due to a “need to lean into a wider installed base.”

Globally, gaming is a $150 billion industry (most of it driven by so-called ‘Live Services’ and macro/micro-transactions), roughly triple the movie industry’s value. Between the ballooning costs of game development, the proliferation of titles and genres all vying for the same limited amount of gamers’ time, and the fact that cutting edge “AAA” games require hardware with no profit margins, it seems that this overwhelming amount of money moving through the industry must be some sort of a ‘bubble,’ and not actually representative of a healthy economy. We’ve already witnessed Nintendo collapse its console business into its handheld business, Microsoft merge its PC and console ecosystems, and now Sony admitting that it needs the additional sales from the 74 million PC gamers out there to make its first-party development efforts worthwhile. It’s only a matter of time before platforms start falling away or merging with others, as more console makers join the likes of Sega, Hudson, and Android-based microconsoles in death.

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