The video game industry is on the verge of derailing a key hardware cycle that's existed for the better part of three decades.
After the first wave of mainstream game consoles haphazardly tumbled onto shelves in the early 1980s, Nintendo established a rhythm that would see the industry deliver new hardware about every five years. This periodicity was as regular as clockwork. The Nintendo Entertainment System arrived in 1985, followed by the Super Nintendo Entertainment System in 1991, the Nintendo 64 in 1996, the GameCube in 2001, and the Wii in 2006. Nintendo's competitors, including Sega, Sony, and Microsoft, have more or less adhered to this timetable through the years.
So, by all rights, consumers ought to expect the next batch of video game console to arrive this year, right?
None of the current Big Three console manufacturers have announced plans for their next generation of hardware. What's more, there's usually at least a year's wait between announcement and retail availability. At this point, the end of 2012 looks like the earliest that gamers might see new hardware in their living rooms, though there's a good chance it could be even later.
So, what's the hold up?
"We have nothing to say at this point in time in regards to what's next after Wii," Nintendo of Canada's Matt Ryan told me via email when I inquired about his company's next generation device. "With the expanded audience we are seeing now, the life cycle of Wii is still believed by many to be longer than that of the past generations. Nintendo was clear at the launch of Wii that the five-year life cycle may not apply to a product so unique and new to the industry. That statement still holds. We introduce new hardware only when we have new software experiences that can best bring it to life."
One might take this to mean that they have the next generation of hardware more or less locked down-which wouldn't be surprising, given that manufacturers typically begin envisioning their next platforms a generation in advance-and that it's the software designers who are gumming up the works.
That could be part of it, but there's probably more to the next generation delay than that, and it has to do with making money off of current hardware.
This is particularly true for Microsoft and Sony. It's no secret that it took both of these companies a long time to start seeing profits from their current consoles. When the Xbox 360 and PlayStation 3 were first released the technology was so costly that their makers actually lost money on each unit sold. Now that these devices are selling well-Microsoft announced recently that it sold more Xbox 360 consoles in 2010 than in any year previously-and production costs have come down, they're finally making good cash. Why would they want to leap into the next generation and move the profit pointer back into the red?
"Given the amount of research and development invested in today's modern consoles, Sony specifically sees a much longer lifecycle for its products due to how technologically advanced they are," said Sony Computer Entertainment Canada's Matt Levitan.
Plenty of publishers and developers are happy to maintain the status quo for a while, too. Software makers have invested heavily in developing games for current generation hardware, and they're keen to continue reaping the profits of that investment. Plus, massive install bases for all three consoles-85 million Wiis, 51 million Xbox 360s, and 47 million PlayStation 3s are now in consumers' hands, according to industry tracking website vgchartz.com-equates to an enormous potential audience for their wares. The industry isn't necessarily growing-research firm NPD reported that the North American console market fell a handful of percentage points between 2009 and 2010-but hardware and software manufacturers are still selling large volumes. That changes when the next generation of consoles arrives.
What's more, new, more advanced platforms means time wasted getting gamesmiths up to speed with fresh technologies. And that's to say nothing of the additional labour required to produce the highly detailed graphics that next generation systems will be capable of churning out. Simply put, development costs will shoot up.
Jumping into the next generation of systems is a hard sell from a creative perspective, as well. Developers large and small are proving that the current level of hardware is more than powerful enough to facilitate a wide range of deep artistic expression. Who's to say more advanced hardware would significantly improve the player's emotional experience?
And we haven't even touched on consumers, yet. Certainly, core gamers always want the latest and greatest hardware, but who's to say that the mainstream masses will want to rush out and spend hundreds of dollars on a new console?
"I feel consumers like a longer lifecycle," said Mr. Levitan. "With PlayStation 3 specifically, you can rely on your entertainment investment lasting a much longer period of time. Sony launched the PlayStation 2 in October of 2000 and it's still a very viable platform for gaming and DVD movie playback some 10-plus years later. We're committed to doing the same thing with PlayStation 3."
Indeed, Nintendo, Microsoft, and Sony are all trying to leverage their existing hardware by delivering additional services via regular firmware updates and providing exciting new peripherals such as the Wii's MotionPlus, the Xbox 360's Kinect, and the PlayStation 3's PlayStation Move.
"With today's powerful connected consoles and software innovation, the life of the console is extended," said Xbox Canada's Craig Flannagan. "We are able to deliver exciting new experiences in gaming on the existing hardware thanks to innovations like Kinect for Xbox 360 and Xbox LIVE. We believe Kinect will serve as a catalyst for the entire industry and push the limits of creativity for interactive entertainment. With Xbox LIVE we can continue deliver innovation through free downloads that renew your Xbox experience."
Of course, all of this leads to an obvious question: How will the next generation of consoles distinguish itself from the current one? Is it simply a matter of offering devices with more powerful processors, additional memory, and extra storage?
I'll save speculation until next week, when I look at how each system has evolved over the last half decade and attempt (in a non-technical way) to predict what the next generation of hardware might have in store.
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