Skip to content

The Future Of Gaming Consoles is Here (Duh)

General purpose devices are the de-facto platform for gaming.  No, I am not saying that the console is going to die.  The $20 billion dollar console market is going to be on a a slow steady decline over many years and its not going away overnight. 

But, the numbers don't lie.  Here is a chart that comprises a lot of different sources.  The net of it is that in Q4 2011 (which is the strongest quarter for console sales), there were 26.8M tablets shipped and 150M smartphone shipped worldwide.  Contrast these huge numbers with 21M dedicated game consoles and and 13M dedicated game handhelds (Sony Vita, etc) shipped in that quarter.

Game device unitsHere are the main reasons for this shift:

  • Consumers are now used to free – Consumers have been trained to play high production value and compelling games for free thanks to Apple and Android devices.  And according to this report from data analytics company, Flurry, 52% of the activity on these devices is games-related.

Today on mobile platforms over 90% of the applications are paid to download but that will        decrease to 12.5% by 2014 in a market that will expand to over $11 billion dollars.  All games will be free-to-play games monetized by micro-transactions (thru the purchased of virtual goods). 
The growth in these numbers are due to the explosive growth of the general purpose smartphone and tablets.  In addition, the friction-less integrated wallets and app stores make the consumption of these games super simple.  The days of paying $40 upfront on dedicated gaming devices are gone or will be gone soon.


  • Developers go where the money is – Android and iOS game revenues are already greater than dedicated game handhelds.  Developers tend to follow the money.   The proprietary devices just don't offer the unit shipments sold to attract developers.  This is another interesting study from Flurry that shows the revenue trends over time. 

Historically, the tight hardware and software integration of these closed systems has enabled large players like Microsoft, Nintendo, and Sony to build unique features as well as developer incentives.  But, today with the rapid innovations of the large players like Apple, the tablets become very powerful and portable go-to alternatives.

  • General purpose tablets are evolving faster than dedicated consoles, game handhelds –New consoles and game devices are few and far between these days with the next generation coming soon after many years without an update.  Apple is revving their product lines a couple of times a year.  The new iPad is a perfect example of how competitive it is in terms of display and performance.  The iPad's Retina Display has a resolution of 2,048 x 1,536 pixels.  That is a million more pixels than a typical high-definition TV that is used to display console games.

It also has wicked fast quad-core graphics with the new A5X processor. The new iPad has double the graphics capability of the iPad 2.

It is definitely an innovator's dilemma for the traditional games companies and publishers who have not yet adapted their strategies to contemplate the hegemonic shift of general purpose smartphones, tablets, and social networks.  I would certainly want to have an embrace-and-extend strategy that would allow me to leverage my existing brands and capital into building out a direction.  Denying that the Earth is not round is gaming in not a viable long-term strategic posture. 


Scroll To Top