Gaming console empires are always rising and falling in the market place. Just ask major corporations like Sega and Atari, both of whom once had a major foothold in Irish homes, but who remembers the Sega Dreamcast gracing their living rooms?
Once seen as a subculture, gaming has now become accepted as a hobby. The market has seen amazing growth over the last 20 years.
The market has shown that it can sustain three consoles over the last 10 years, with many homes having both a Wii and one or both of the other two.
Stats show, 51 per cent of American households own a dedicated game console and those that do, own an average of two.
Total consumer spend on games industry, 2012 - Dollars in billions
Image from Entertainment Software Association
How many times have you been annoyed by invites from your friends to help them harvest their virtual crops on Farmville?
It’s all big business, even the social media games. The release of Grand Theft Auto 5 broke multiple records when it sold 11.21m units in its first 24 hours and generated €590.66m – in total GTA V has sold 32.5m units and counting – pocketing it’s developers more than €1.5bn.
The advent of the modern home console
The original Playstation and the PS2 once dominated the entire home console market from 1994 to 2005 selling close to 260m units worldwide.
In comparison, sales of all other home consoles combined in the period didn’t even hit 100m units.
Former giant Sega gave up entirely on hardware manufacturing after seeing the Dreamcast and Saturn flop and are now focused on developing games and licensing their titles.
Sonic the Hedgehog and the Sega Mega Drive were once household names in Irish homes, but the death of Sega as a hardware manufacturer shows just how quickly a giant can be toppled by its competition.
The golden age
The playing field changed dramatically in 2006 with the next cycle of systems. The Xbox 360 undercut the PS3 and it was also easier for developers to harness the power of the Microsoft system, meaning consumers were more inclined to pick up the 360.
It was simple for consumers to change allegiances; however, even with these PS3 drawbacks, the new Xbox only outsold the PS3 82.9m unites to 80m.
During this time the underpowered Nintendo system, the Wii, blew everyone out of the water selling 100.90m units with its family friendly games and motion controls.
This era of gaming was regarded as somewhat of a golden age.
Next, next, next gen
Just before Christmas, both Microsoft and Sony launched their new consoles. The Xbox One and the PS4, both were preceded by the next Nintendo outing; the Wii U.
It’s widely believed that Nintendo has made a misstep with their new console, which was marketed poorly with many consumers not even realising it was even a new console.
However, the Nintendo console is very different from the other two machines which are jostling for the exact same market share.
Back catalogue
The Sony platform has always had the better back-catalogue with thousands of PS1 and PS2 games to bloster it’s line up of games.
The PS4 was predicted to beat the Xbox One at launch and it hasn’t disappointed, selling nearly 50 per cent more machines than its Microsoft counterpart.
This is largely down to the substantially lower price point and marginally better hardware.
That being said, the new Xbox is not likely to slip into obscurity anytime soon, but if it remains on current levels the console may, however, suffer hugely on its next outing.
Whoever wins this cycle, also wins the next cycle
With the emerging download market it’s becoming more difficult to swap platforms.
The last console cycle integrated online connectivity into our home consoles but brick and mortar retail still formed the largest part of media sales. Like many industries, including music, movies and news the market has moved and is moving to online platforms.
As developers receive no revenue from the sale of used games from outlets like GameStop, they would obviously like to see their titles in download only formats.
Brand loyalty always comes into question during this transitional periods between consoles, gamers are discerning customers and take account of the many factors when upgrading to the latest generation.
Major factors include; price, processing power, launch titles, brand loyalty and one aspect that is becoming ever more vital, the previously downloaded library.
In the past a gamer could simply sell off their old games on the second hand market but with the advent of downloadable titles, gamers will be reluctant to part ways with their company.
Whoever wins this title race this cycle could very well see their market segment well protected for the following one, as more games embrace downloading their content.
What is the most vital aspect when you decide which console to purchase?
