i think your conclusions are sound, and well supported with data. however, i don't see the kind of growth publishers are seeking as a positive for the industry. and while i agree with your last statement that it's a great time to be a gamer, i don't think it's because there's a paywall for multiplayer, fewer game coming out for dedicated hardware, and publishers looking to squeeze more money out of their consumers from these games. what's great about this gen is mostly on steam and mobile. steam, for being a place where games such as gone home can be a surprise success, as well as a new home for older titles (we're starting to see japanese rpgs build a userbase there). and mobile for getting developers in japan to take it seriously, like sega, square-enix, nintendo, and konami, and the continuing evolution of design leading away from simple puzzle games into other genres that traditional gamers might call fuller-fledged.
basically, that's where the increase in variety will come from. it's where a breadth of gamers will be found.
Thanks for your reply AniHawk, always been a fan of your posts.
To clarify, when saying that the kind of tactics publishers are using is going to allow growth in the industry, which is a good thing, I meant that it's a positive for the companies themselves. Yes there are some advantages for gamers but ultimately that point was saying that video game publishers have the opportunity to grow their business through focusing on successful core IP's that will appeal to a core gamer audience and by creating added value content in order to maximise revenue per user.
With the contraction in the publishing/dev market we've seen the big players come out on top, the middle leave and the bottom filter out as well. The opportunity also lies with Indies on console as well who have the opportunity to replace that middle layer and I'm sure we're going to see indies grow this gen and other small teams work on bringing small to medium size experiences to console. Digital is a growing medium and there is plenty of opportunity on console as we've seen that some games don't need retail releases to be successful.
PC/Steam as you say is currently undergoing a turnaround at the moment and there is a lot of growth going on in that sector. I'm sure that MS and Sony want a share of that as well hence their push with indies on console and providing them with the tools to bring games to the platform.
this is problematic to the people clinging to dedicated hardware for a few reasons. the first being that their userbase shrunk dramatically. if you're microsoft, you're not selling to a worldwide audience like you did before, and you're not reaching families like last gen. if you're sony, then no one's interested in the console experience on handhelds the way they presented it, especially on a worldwide scale. and then most obviously if you're nintendo, the breadth of people they reached last gen mostly went off to other things, whether it was mobile, ps4, or other platforms. the problem here is that the userbase isn't necessarily primed to grow next-gen when costs get bigger yet again. given the studio closures last gen and the lack of new blood this gen (except maybe madcatz?), it's hard to say this trend will reverse itself. i just wonder when the other shoe is going to drop, and if they can have fewer games getting more money out of fewer people and still run a business. another issue is that it seems sony and microsoft are both attempting to reach new audiences through hardware, which is a good thing, but it seems the hardware will be experimental and extremely high priced. i can't see this as a way they'll be able to drive growth. with microsoft, i actually believe there's a better chance hololens gets support internally, but with morpheus, i think dreams is the only major first-party game you'll see from sony. with kinect, microsoft made sure a couple games were made by talented teams, like rare and harmonix. sony mostly shopped move around to their b-teams like they did when they developed psp and ps vita games. if they're going to make advancements in hardware, i think it needs the effort in software to back it up. this was the problem with the 3d in the 3ds and the screen in the gamepad as well.
Yes, the userbase has shrunk dramatically, as have the number of publishers and games, I think I'll refer to my post above this quote to answer. In that indies are the new middle end developers, AAA devs are trying to maximise revenue per user and that core gamers are still buying consoles. So consoles aren't in immediate danger, but they do need to try and find other ways to get that userbase back up and as you say, morpheus is one option.
I'm not too optimistic about Morpheus due to the reasons you've mentioned in that it's experimental, it may not appeal to the mass market and that it may be high priced.
I do however disagree that software will be an issue on the Morpheus, I think Sony in the first year at the very least will push plenty of games, some first and some third party, but I don't think games will be an issue just due to the amount of buzz around VR right now from an industry perspective.
the final problem is the lack of getting families involved on the xbox one and ps4 in particular. while minecraft, disney, lego, and skylanders all hit these machines (and jurassic world for the first time actually seemed to do well on them), i don't think the idea of a several hundred dollar platform with $60 games has been the focus of kids and families for about five years now. i think sony and microsoft have realized they're lacking in this way, but i wonder when the point of no return is and if it isn't already too late, especially when mobile is so much more prevalent at this age group. these are all problems for next-gen.
so i guess in the short term, it's a good thing most people are still making money across the board. in the long-term, it doesn't look like the dedicated hardware model will last in its current form, and i don't think enough is being done to adapt to the changing marketplace.
Whilst I mentioned above that there are lots of reasons why the userbase isn't expanding, ultimately the industry can still grow when it comes to revenue and ARPU. I do agree that publishers and platform holders still need to find a way to attempt to grow the market. One way they can do this is by bringing teen friendly casual games that encourage social and multiplayer experiences. That's the way they can attempt to bring back in casual + family audiences and we are seeing a strong push towards that but at this point it's hard to say how successful it'll be. Certainly the bigger the IP the more of a crowd it can draw in. I don't think consoles are totally dead to casuals but I do agree about your conclusion.
In the short term (then gen) the core gamer will continue to support the console industry and attempts to bring in casuals don't matter too much if they succeed or fail. In the longer term it's hard to say exactly what will happen. At this point I'm not really commenting on the next generation of consoles until we hear more about NX and once we get later into the 8th generation.
Interesting points, but it should be noted that mobile makes most of its money on high margin customers as well. Apple and Samsung make a large amount of money on their high margin hardware and it is the mobile whales that make the majority of money for mobile publishers. It isn't grandma with the cheapo Android phone playing mobile games on occasion giving mobile the majority of its money. It's the people really dedicated to their smartphones and tablets and using them doing so.
Absolutely correct, and this is why we're seeing revenue increase this year and potentially over the next few years despite a declining user base. The console market isn't 100% stable right now but the contraction in the market has already happened and it's up to the publishers making video games to ensure their strategies cater to the core gamer userbase, contain multiple revenue streams, and are successful in the market place. And for indies and smaller developers to target a wider audience as well.
Casuals are always good to have though because they are guaranteed to bring in revenue through hardware purchases and the occasional software purchase. What happened last gen was publishers tried to cater to the casual audience too much by releasing too many titles each year which backfired due to low sales because casuals weren't really buying much software anymore. Once they cut it down to a few games per year the games didn't sell well either and it was too late.