Are Video Games consoles globally irrelevant?

Some call it witchcraft I call it a calculator. These have been working overtime recently at Strategy Analytics as they concluded:

… you might be surprised to hear it; but Sony’s PlayStation 3 has passed Microsoft’s Xbox 360 in one key respect: the global active installed base of consoles … the global active installed base of PS3s reached 43.4M at the end of 2010. This exceeded the equivalent number of Xbox 360s by 43.9M. [Strategy Analytics] … estimate that the overtaking manoeuvre happened during December 2010 as the holiday season reached its peak.

At this point its worth triggering the Auto-Caveat-Creator™. If you look at the VG Chartz figures X360 is in the lead, based on ship figures and the greatest stumble in console history (The Red Ring Of Death) has dealt a heavy blow to the active installed base:

[Strategy Analytics] ownership models apply assumptions about device retirement life cycles to console sales data on a regional and global basis.

Strategy Analytics had been effectively tracking the Wii and predicted a peak mid 2011, that would be passed by PS3 in 2013 and Xbox 360 in 2014. Their method is robust. So what does this mean? All in there are about 175 million active consoles globally. The DS and handheld iOS platforms are currently tracking around 150 Million each.

Including handhelds: publishers, developers and interlopers are fighting for a slice of a 55o million global device pie, about 40% of the population of China. In this context, as a global phenomena, console penetration is slight. Global PC penetration currently estimated at 1.2 billion worldwide is dwarfed by the population of China, only global TV penetration outstrips it

The developed nations are housing coveted publishing powerhouses and platform holders, that are yet to admit PC gaming is dead and Game Consoles are irrelevant.

Bring on the 8th Generation.

The Beatles Killed The Dreamcast

Dreamcast

The 9th of September 2009 marked the 10th anniversary of the North American launch of the Dreamcast. A decade later it was the release date for The Beatles: Rock Band. These two events are both symbolic as they bookmark what has been one of the most turbulent periods in the history of entertainment media. Time feels like its accelerating with an exponential nature, the speed of progress. 1999 was a world away from today, the key evolutions in the online space were yet to come. Napster was launched in 1999 and closed down in 2001. Google came into being in 1996 and grew to its pre-eminent position throughout this period. Facebook wasn’t launched until 2004, with Twitter bringing up the rear in 2006. Throughout this period the music industry faced its biggest struggle as it wrestled with the colossus of peer to peer, and the digital tsunami it faced. The music industry emerged bloodied and bruised, and has never fully recovered. This context is relevant as in 1999 the Beatles back catalogue was considered to be so valuable that its inclusion in a video game, ‘a child’s toy’, would have been unthinkable. Therefore, something must have changed. Did video-games grow up or did the music industry wake up to its potential? Or was it somewhere in the middle?

The launch of the Dreamcast, represents a high water mark. The Dreamcast was a seminal moment in the history of both Sega and Video Game consoles themselves. So much was right with the Dreamcast, the device itself has an understated elegance, its dimensions were balanced, and it is arguably the best looking console in history. It had the might of Sega behind it, who had an unprecedented history of innovation and success. The previous generations of consoles had divided the video game nation and created a loyal and unflinching following. Whilst the winds of change were evident, namely the spectre of the Playstation, each and every Dreamcast owner was proud and excited about the potential of the system and the future for Sega. As history has proven this was to unravel over the next two years. The potential reasons for the Dreamcast’s demise have been eloquently and exhaustively discussed. At this point I can only contribute my own perspective. The Playstation represented the start of the erosion of the pursuit of video games as an innovative artform. The wildy inventive Chu Chu Rocket! came out soon after launch and Rez came out in 2001 on both Dreamcast and Playstation 2, although it’s natural home was the Dreamcast. Sega had a vision and  purity derived from the gameplay lessons learnt through the evolution from arcade to home console.

The Dreamcast redefined what a console meant by a single inclusion of the 33.6  kbps modem (in Europe), and the accompanying Dreamarena online service. Dreamarena was a dial up service created through a partnership between ICL, BT and various ISPs. Dreamarena closed in March 2003. Dreamarena was free and provided the blueprint for services like Xbox LIVE and PSN. The lessons learnt provided an insight to Microsoft and Sony at the expense of Sega. The online capabilities of the Dreamcast were at odds with the times where online PC gaming was nascent and seemed unthinkable on a console. Sega were aware of the risk and the inclusion of the modem in each Dreamcast cost them dearly:

“I forced [Sega] to put in modem functions. At that time, I had a lot of opposition that said it was ridiculous to stick in a modem that cost several thousand yen. But, I managed to get it my way” Isao Okawa, President of Sega

After Sega bowed out of the console arms race, it was left to Sony and Nintendo to slug it out, until the arrival of the Xbox in 2001. Sega had occupied a unique market space, as it had attributes of Nintendo and Sony, a unique combination of genre defining IP (Sonic) and hardcore gaming appeal. The video game industry owes a huge debt to Sega. As Sega moved across to become a developer/publisher the devotees rubbed their eyes in disbelief …“How could this have happened?”

In the years that followed the Games Industry grew, and fractured into a myriad of subdivisions, built around genre and target audience. In 2005 Red Octane released Guitar Hero. In 2007 EA/Harmonix/MTV Games released Rock Band. The material differences between the two, in 2009, are essentially irrelevant.  To date Rock Band has sold 13 million copies with a billion $ in total sales and in excess of 50 million track downloads. From the outside looking in, it appeared there had been a perfect synergy of games and music. This was far from the case.

The games and music industry were bumping heads as the music industry was still trying to attach the material values of a physical world to a digital landscape. Well documented digital hold outs began to emerge, AC/DC, Metallica and most famously the Beatles. The exact reasons for this are varied, be it a consideration that digital was devaluing music, a natural suspicion or blind fear and panic. In the realm of music games the music of the Beatles represented the ultimate goal. The digital hold outs began to fall … lured by a new audience and inevitable revenues as they were coaxed onto the gaming platforms. As the games hit the mainstream the pressure from band managers, record labels and publishers became so ferocious that no-one could resist. The Beatles were literally for sale.

For the games industry a band like the Beatles represents a gift. A huge and dedicated  fan-base with a history of repeatedly buying the countless re-issues that have been force-fed to the audience over the years. Stereo? Mono? Limited edition Miniature album packaging? Box sets?. The fan-base devoured them like a gluttonous beast, seemingly insatiable and ever thankful. George Lucas faces criticism for endlessly profiting from his audience, whereas the Beatles strangely have avoided this fate.

The Beatles also represent a route to the non-traditional gamer, or indeed for that matter the non-traditional music purchaser. Whether Beatles Rock Band is a good game or not is wholly irrelevant. It will sell, this is a given as the stars are aligned in such a way that the plaudits and sales figures are inevitable. Who is going to kill the goose that lays the golden egg? Not the games press, and certainly not the worldwide media who enjoy huge sales spikes everytime they put the Beatles on the cover.

You may think this churlish, of me as a killjoy who is standing in the way of the enjoyment of others. For me these events, separate by a turbulent decade illustrate the limitless potential of video games as a medium, ranged against the calculated creation of a product that is intended to break new markets, recycle IP, and perhaps even make enough money to soften the blow once the Beatles music falls out of copyright. Everything about Beatles Rock Band is recycled, The concept for the game, the music therein and perhaps even the plastic in the instruments. The Dreamcast represented a visionary company making and brave, ambitious and ultimately disastrous strategic move. However, without the Dreamcast the ecosystem that has allowed Rock Band to sell 50 million downloads would not exist.

If we try and re-engineer history to infer an aetiology in reverse, it could be argued that the drive towards commercialisation, sequelism and fundamentally mainstreamism were the seeds that were apparent at the very point of the Dreamcast’s collapse. Therefore it would seem that the very thing that has advanced the video games industry  as a whole was the exact thing that helped to eliminate the Dreamcast. The Dreamcast is a cautionary tale to the games industry, but in hindsight created the industry we have today.

The Dreamcast is dead. Long Live the Dreamcast.