The Next Generation of Video Game Consoles

June 28th, 2012 at 5:00 am -

This Christmas we will reach 7 years since the launch of the Xbox 360 and 6 since the launch of the PS3 and the Nintendo Wii. Now since it?s clear that Nintendo are going in a completely different direction, we will concentrate on Microsoft and Sony who are likely to do something a little more radical in their development of their next generation consoles. Here are the key points that both Microsoft and Sony will have to cover:

Going Digital

Retail stores are still a major part of sales for the video game industry but the recent problems with UK retailer Game have exposed their vulnerabilities. Ultimately the major companies in the video game industry would benefit from no longer relying upon retailers, as a digital copy of a game cannot be traded in and resold as a second hand game. For example, a game which is purchased and downloaded direct from a console?s marketplace benefits from a lack of manufacturing costs, no disc, case or manual needs to be produced. This also cuts out the retailer, who would normally take a share of the sales, increasing the profit margin for both the developer and publisher. Perhaps the biggest reason why digital downloads are the future of the industry however, is the fact that a digital copy cannot be traded in and resold as a second hand game. When a second hand game is sold by a retailer, the publisher and developer does not get any money from the sale, this cuts into their profit margin and is especially harmful to small-medium sized companies.

Keeping up with PC Gaming

The big advantage that a PC still has over a console is the ability to keep up with modern advances in graphics and PC power by swapping graphics cards in and out. Games such as Battlefield 3 and Crysis just look better and run smoother on high end PC?s.? If Sony or Microsoft can find a way to keep their hardware up to date, then that could be a major selling point for their next console. It?s unlikely that there will be as big an improvement in visuals as there was between the PS2 and the PS3 for example, but there is going to have to be some sort of improvement if consumers are going to be tempted to upgrade to new hardware. Game developer Epic games has become one of the first companies to show what they might be able to do in terms of visuals in the future, showing off their next version of the Unreal Engine at E3 2012.

The price point

Sony made a big mistake when they released the PS3 with a ?500 RRP just a year after Microsoft had launched the Xbox 360 for ?280. Sony?s initial struggles were largely a result of their failure to convince consumers that their console was significantly better than Microsoft?s. As a result they lost out on a number of exclusives due to the 360?s much larger install base. While sales of the PS3 have since picked up pace, especially in Europe, Sony would have been in a much healthier position if their launch had been stronger. It is then, vitally important for both companies to get the price point right first time round or risk failing to entice consumers to invest in new hardware.

Release date

For Microsoft, releasing a whole year earlier than the PlayStation 3 proved to be a big advantage. When they released the Xbox 360 they had no competition, with the PlayStation 2 nearing the end of its life cycle, this meant that consumers only had one choice to make, whether to buy an Xbox 360 or buy nothing at all. For Sony this caused many issues when they released the PS3, many gamers had already invested in an Xbox 360 and were not willing to spend a significant amount of money on yet another console. On top of this, Microsoft had already built up a solid library of games and had many more ready for release, making their product far more attractive. Something that they will both have to also keep in mind when deciding upon a release date is when making sure that there are no major current generation games being released around the same time, as this would devalue the need for buying a new console altogether. If Rockstar release the next Grand Theft Auto on current systems, it could be argued that they still have plenty to offer.

Games

Having an attractive selection of games is a big selling point for a console, if you give gamers titles which have unique features which can only be run on a new console then you give them a reason to go out and buy it. Making existing games for current gen consoles compatible with next gen machines is also important. If consumers know that they can still play the games they already own on the new system, there will be less hesitation in moving on. Shortly after Microsoft launched the Xbox 360, they had big games like Halo 3 and new franchises like Gears of War available to consumers. On the other hand Sony had several great games, such as Resistance: Fall of Man and Motorstorm, but didn?t have any major titles to drive sales.

So it is clear that both Sony and Microsoft are going to have to make sure they consider a number of different factors when releasing new hardware. They will need to ensure that they have a unique selling point to make their products attractive to the consumer. Sony especially simply cannot afford to get it wrong a second time round as the company is already struggling to cope with slumping sales in its other product lines. While Microsoft will be desperate to continue the momentum gained by the Xbox 360.

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