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Game consoles are in their last cycle, will be irrelevant in 10 years, analyst says

During this year’s Game Monetization Conference in San Francisco, California, Michael Pachter, a managing director and analyst for Wedbush Securities, shared updated data and his latest thoughts on the future of the games industry (game consoles in particular) – for the next 10 years. 

For the most part, Pachter’s presentation addressed issues that many individuals, even those outside of the games industry, already know. That is to say, that while the physical aspect of gaming retail is staying fairly consistent, the digital segment is expanding dramatically:

I actually don’t think with the next-gen consoles out the physical segment is going to shrink any further, but the digital segment is growing strongly and will continue to do so.

According to his data, Pachter approximates that the size of the North American games market (console, PC, hand-held, and mobile) to total $25.8 billion – with the physical and digital figures of the industry amounting to $8.9 billion and $17 billion respectively.

Keep in mind that the increasing popularity of both mobile and free-to-play games (i.e. Hearthstone, Candy Crush Saga) have assisted in expanding gaming’s digital market. However, Pachter states that the this trend will continue to evolve, going so far as to say that peoples’ phones, devices, and other mobile devices will “become game consoles,” echoing previous discussion about the games industry regarding the power of mobile devices such as phones and tablets.

Which leads to what many gamers may or may not find controversial – Pachter essentially believes that game consoles are a dying breed, due to his prediction that in the near future – mobile devices will be able to play AAA-level console games.

I think it’s the last cycle for consoles because you’re not going to need a game console to play a console game. I think consoles are irrelevant in ten years.

Read more on what Pachter had to say about game consoles and their future lookout below:


 

Game Console’s Future: Irrelevant In 10 Years?

Game Console Future Irrelevancy

When looking at the install base of current-generation consoles (PS4, Xbox One), Pachter has observed that the install base is not growing due to the aforementioned “digital migration,” providing the following statement and data:

…people are playing Bejeweled [on game consoles]. You’re seeing a crossover of demographics – people are playing games on game consoles they didn’t used to play, and they’re still playing these games on their phones and their tablets as well.

Pachter also compared the figures of this generation’s game consoles to those of the last-generation. His observations led to his belief that, in general, the game console market will stay relatively the same:

The Wii U is going to sell 20 million units where the Wii sold 100 million units; the PS4 is going to sell 100 million to 120 million units, probably; the Xbox One will sell 100 to 110 million. When you add all that up, the next generation of consoles is 240 to 260 million, and last generation was 260 million. So it’s not a growth industry. For everyone in this room not chasing that market, you’re going to be fine. The market is going to get a lot bigger, just not on console.”

Pachter’s prediction is based on the hybrid definition of “game console” – “An electronic device for playing video games” that possesses current-generation consoles’ power/ability to render more pixels and polygons. As for what makes a “console game,” that is up for debate – it could simply be a game developed for, and can be played on a game console. In contrast, it could also be a game that harnesses the respective game console’s ability to deliver a complex, engaging experience only possibly by its system’s architecture.

As for Pachter’s ultimate prediction of what the games industry will look like in the next 10 years, he sees cloud gaming taking over the physical game console market, however with one significant difference distancing it from services such as OnLive, et cetera – unification. Pachter believes that prominent game publishers will collaborate to provide collective network compatibility that will allow for universal cross-platform multiplayer across all devices.

Pachter’s vision sees games industry giants such as EA, Activision, and Ubisoft allowing avid multiplayer gamers competing against each other regardless of whether or not their opponents has a PC, a game console such as a PS4 or Xbox One, or even a smartphone/tablet. In short, Pachter sees a sort of video game utopia where it doesn’t matter what you’re playing on, but more on what you’re playing.


What are your thoughts on Pachter’s statements regarding the future irrelevance of game consoles? What do you think of his vision for the future of the games industry? 

Let us know in the comments section below! As always, stay tuned to GamerHeadlines.com for the latest in video game and technology news.