Uploaded byBen Cousins
When The Consoles Die, What Comes Next?
The document discusses the decline of traditional video game consoles and the rise of new platforms like mobile and social games. It notes that the market share and sales of major console companies are shrinking while new companies focusing on free-to-play mobile and social games are seeing huge growth and audience sizes. It compares this change to the death of arcades in the 1990s-2000s when home consoles surpassed arcades in capabilities and larger companies helped grow the home market.
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When The Consoles Die, What Comes Next?
- 1. WHEN THE CONSOLESDIE, WHAT COMES NEXT? BEN COUSINS (ALL MARKET INFORMATION CORRECT ON 7TH MARCH 2012)
- 2. WHO IS THISGUY ANYWAY?
- 3. WHO IS THISGUY ANYWAY?
- 4. WHO IS THISGUY ANYWAY?
- 5. WHO IS THISGUY ANYWAY?
- 6. WHO IS THISGUY ANYWAY?
- 7. WHO IS THISGUY ANYWAY?
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- 9. WHEN THE CONSOLESDIE, WHAT COMES NEXT?
- 10. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Die, for the purpose of this talk means โSigni๏ฌcantly smaller market share with no sign of returnโ
- 11. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Sales drop in absolute terms, often because customers move to a new solution for their need
- 12. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Sales drop in absolute terms, often because customers move to a new solution for their need
- 13. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Sales drop in absolute terms, often because customers move to a new solution for their need
- 14. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Market share drops in relative terms, often because a new product massively expands the overall market
- 15. WHEN THE CONSOLESDIE, WHAT COMES NEXT? Die, for the purpose of this talk DOES NOT mean โThe product is never used by anyone ever againโ
- 16. WHEN THE CONSOLESDIE, WHAT COMES NEXT?
- 17. WHEN THE CONSOLESDIE, WHAT COMES NEXT?
- 18. WHEN THE CONSOLESDIE, WHAT COMES NEXT?
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- 21. THE STATE OFTHE INDUSTRY The Old World
- 22. THE OLD WORLD NASDAQ+25.78% EA -61.77%
- 23. THE OLD WORLD NASDAQ+25.78% ATVI -33.34%
- 24. THE OLD WORLD NASDAQ+25.78% MSFT +24.39%
- 25. THE OLD WORLD โConsumerSoftware, Services & Devicesโ, โEntertainment & Devicesโ Division Pro๏ฌt/Loss Lifetime results for this division = $7.807B loss
- 26. THE OLD WORLD NASDAQ+25.78% SNE -46.42%
- 27. THE OLD WORLD โGamesโ,โNetworked Products & Servicesโ, โConsumer Products & Servicesโ Results for this division since 2000 = ยฅ252.9B loss (around $3.1B)
- 28. THE OLD WORLD NASDAQ+25.78% NTDOY -71.28%
- 29. THE OLD WORLD USAnnual sales (hardware and software) 1997-2011 (NPD, billions USD)
- 30. THE OLD WORLD UKAnnual sales (hardware and software, billions GBP)
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- 35. THE OLD WORLDIS LARGE BUT SHRINKING FAST โข In summary; โข Investors are not showing con๏ฌdence in the future of large traditional publishers โข Sony, Microsoft showing losses for console divisions over the last 10 years โข Nintendo in โdisarrayโ โข Retail sales dropping year on year since 2009 โข Major European retailer Game in serious trouble โข Casual & kids games on console and handhelds hit by an unseen force
- 36. THE DEATH OFDEDICATED ELECTRONICS HARDWARE Down 17% Down 42.5% Down 32.6% Down 20.5% Down 20.8%
- 37. THE STATE OFTHE INDUSTRY The New World
- 38. THE NEW WORLD Top5 dedicated gaming companies by market cap, August 2008 (millions USD) 123 33 30 26 43
- 39. THE NEW WORLD Top5 dedicated gaming companies by market cap, March 2012 (millions USD) 123 33 5 8 18
- 40. THE NEW WORLD Audience sizes for games 25 million sales 500 million downloads
- 41. THE NEW WORLD โ100โ 20 19 Market caps of platform companies (billions USD) 267 495 198
- 42. THE NEW WORLD Combined market caps of platform companies (billions USD) 793 306
- 43. THE NEW WORLD Growthrates of platforms (assumes 70% of iOS are gamers, 50% of FB are gamers, excludes iPod touch sales)
- 44. THE NEW WORLD The Japanese revolution
- 45. THE NEW WORLDIS GROWING VERY FAST โข In summary; โข Now 3 out of 5 of the worldโs largest gaming companies distribute digitally, are freemium focussed โข The audience sizes for a hit game has increased 20x on new platforms like FB, iOS and Android โข New Mobile/Social platforms are driven by huge companies โข In Japan freemium social mobile has already overtaken the traditional business
- 46. THE LAST BIGCHANGE When The Arcades Died, What Came Next?
- 47. THE LAST BIGCHANGE Per Capita Spending on Video Games in the United States by Revenue Model (2010 dollars) Copyright ยฉ 2012 SuperData Research The 1980โs Traditional Retail revenue hovers between 3% and 35% of Arcade
- 48. THE LAST BIGCHANGE Per Capita Spending on Video Games in the United States by Revenue Model (2010 dollars) Copyright ยฉ 2012 SuperData Research The 1990โs Traditional Retail revenue grows steadily from 38% to 166% of Arcade
- 49. THE LAST BIGCHANGE Per Capita Spending on Video Games in the United States by Revenue Model (2010 dollars) Copyright ยฉ 2012 SuperData Research The 2000โs Traditional Retail revenue grows sharply, ending up 17x the size of (declining) Arcade
- 50. THE LAST BIGCHANGE Per Capita Spending on Video Games in the United States by Revenue Model (2010 dollars) Copyright ยฉ 2012 SuperData Research What happened here? The Tipping Point What killed the arcade?
- 51. THE LAST BIGCHANGE The 1980โs โขArcades dominated home experience โขBetter graphics โขBigger screens โขBetter controllers
- 52. THE LAST BIGCHANGE The 1980โs โขArcades dominated home experience โขBetter graphics โขBigger screens โขBetter controllers
- 53. THE LAST BIGCHANGE The 1980โs โขArcades dominated home experience โขBetter graphics โขBigger screens โขBetter controllers
- 54. THE LAST BIGCHANGE The 1990โs โข Arcades start much more powerful than home consoles โข Mid 90โs consoles and PC start competing with textured 3D arcade games โข Sonyโs entry into the business - a company 3.7x bigger than Nintendo โข 1998 Dreamcast launched, same as Naomi system board, less memory
- 55. THE LAST BIGCHANGE The 1990โs โข Arcades start much more powerful than home consoles โข Mid 90โs consoles and PC start competing with textured 3D arcade games โข Sonyโs entry into the business - a company 3.7x bigger than Nintendo โข 1998 Dreamcast launched, same as Naomi system board, less memory
- 56. THE LAST BIGCHANGE The 1990โs โข Arcades start much more powerful than home consoles โข Mid 90โs consoles and PC start competing with textured 3D arcade games โข Sonyโs entry into the business - a company 3.7x bigger than Nintendo โข 1998 Dreamcast launched, same as Naomi system board, less memory
- 57. THE LAST BIGCHANGE The 2000โs โข Home consoles now in parity or above arcades in power โข Arcade still have better controllers, bigger screens โข Microsoftโs entry into the business - a company 6x Sony, 12.7x Nintendo โข Dead arcades - novelty controllers/cabinets, 2D ๏ฌghters
- 58. THE LAST BIGCHANGE The 2000โs โข Home consoles now in parity or above arcades in power โข Arcade still have better controllers, bigger screens โข Microsoftโs entry into the business - a company 6x Sony, 12.7x Nintendo โข Dead arcades - novelty controllers/cabinets, 2D ๏ฌghters
- 59. THE LAST BIGCHANGE The 2000โs โข Home consoles now in parity or above arcades in power โข Arcade still have better controllers, bigger screens โข Microsoftโs entry into the business - a company 6x Sony, 12.7x Nintendo โข Dead arcades - novelty controllers/cabinets, 2D ๏ฌghters
- 60. THE TIPPING POINT โขTwo big things happened; 1.Bigger companies entered the games business โข More marketing clout, grow the overall business 2.Chips got cheap enough and lower power enough โข Creating an โarcade experienceโ in the home, that pulled in the arcade gamers โข Home consoles had always been cheaper and more convenient, but these advantages now really mattered โข Worth noting arcades still often had bigger screens & always better controllers
- 61. THE NEXT BIGCHANGE ? When The Consoles Die, What Comes Next?
- 62. THE NEXT BIGCHANGE When The Consoles Die, What Comes Next?
- 63. THE DEATH OFDEDICATED ELECTRONICS HARDWARE Down 17% Down 42.5% Down 32.6% Down 20.5% Down 20.8%
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- 65. โข โSustaining Technologiesโ dominate โข Disruptive tech enters the market โข Incumbents donโt take it seriously โข It rapidly increases in performance โข Disruptive tech replaces all usages
- 66. โข โSustaining Technologiesโ dominate Large scale businesses computing โข Disruptive tech enters the Scienti๏ฌc market computing Personal โข Incumbents donโt take it Computer seriously Small business computing โข It rapidly increases in performance Hobby computing โข Disruptive tech replaces all usages
- 67. โข โSustaining Technologiesโ dominate AAA Console Games โข Disruptive tech enters the market Handheld Games iOS/Android โข Incumbents donโt take it devices seriously โข It rapidly increases in Kids Games performance Casual Phone Games โข Disruptive tech replaces all usages
- 68. We are here โข โSustaining Technologiesโ dominate AAA Console Games โข Disruptive tech enters the market Handheld Games iOS/Android โข Incumbents donโt take it devices seriously โข It rapidly increases in Kids Games performance Casual Phone Games โข Disruptive tech replaces all usages
- 69. DISRUPTIVE TECH MOVESFASTER My Little Tank (2005)
- 70. DISRUPTIVE TECH MOVESFASTER Gran Turismo 4 (Polyphony Digital 2005) God of War (Sony Santa Monica 2005)
- 71. DISRUPTIVE TECH MOVESFASTER In๏ฌnity Blade Dungeons (Epic 2012)
- 72. DISRUPTIVE TECH MOVESFASTER Modern Warfare 3 (Activision 2011)
- 73. WHATโS HAPPENING RIGHTNOW? โข Two big things are happening; 1.Bigger companies have entered the games business โข More marketing clout grows the overall business 2.Chips are getting cheap enough and lower power enough โข Creating a โconsole experienceโ on the move, pulling in the console gamers โข Mobile games have always been cheaper and more convenient, but these advantages now really matter โข Worth noting that consoles will still often had bigger screens & always better controllers
- 74. WHAT A STRANGE,MARGINALIZED OPINION!
- 75. JOHN CARMACK โplatform wise, you could certainly imagine a future where, instead of having your console, you have your mobile deviceโ
- 76. PHIL HARRISON โIf they carry on unrestrained in their growth, then thereโs a pretty good chance that Apple will be the games industryโ
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- 78. HIDEO KOJIMA โGamers should be able to take the experience with them in their living rooms, on the go, when they travel -- wherever they are and whenever they want to play. It should be the same software and the same experience,โ
- 79. GABE NEWELL โI suspect Apple will launch a living room product that rede๏ฌnes people's expectations really strongly and the notion of a separate console platform will disappearโ
- 80. KOTAKU โTim Cook holds the future of gaming in his hands.โ
- 81. CONSOLES WONT DIE- CINEMA WASN'T KILLED BY TV!
- 82. CONSOLES WONT DIE- CINEMA WASN'T KILLED BY TV! % of the US population who visited the cinema on a weekly basis (Michelle Pautz, Elon University, 2002)
- 83. CONSOLES WONT DIE- CINEMA WASN'T KILLED BY TV! Total UK cinema attendance (British Film Institute, Cinema Advertising Association & Rentrack EDI)
- 84. CONSOLES WONT DIE- CINEMA WASN'T KILLED BY TV! UK box of๏ฌce cinema revenue as a % of GDP (Bakker 2008 and ONS)
- 85. CINEMA WAS CRUSHEDBY TV โข The โplatform holderโ (cinema) didnโt do ok - thousands of cinemas closed down โข The โcontent peopleโ (movie studios/distributors) did ok โข Made movies available on the lower-res โfree to watchโ TV and โfor hireโ VHS platforms โข Games content developers need to do the same - move content to new low-res platforms - or we will suffer the same fate as the cinema
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Editor's Notes
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