The End of Gaming (Consoles)

From Gaming Business Review

The End of Gaming (Consoles)

Which is the odd one out: The mainframe, the mini-computer or the game console?

My answer would be the mini-computer, the only one that really is not made anymore (although no doubt someone will correct me). While it may surprise some, the IBM mainframe is still very alive and well – not the control point it was, but still a multi-billion dollar business and I suspect, still a large part of IBM’s multi-billions of dollars profit.

Then again, we could say all the same things about the game consoles. They are large, multi-billion dollar businesses, which probably make multi-billions of dollars for Nintendo, Sony and Microsoft. But there is a chance that they are doomed the same way the mini-computer was and the mainframe was not.

While the mainframe has lost its original prominence, smart people in Poughkeepsie, NY and the surrounding counties of NY, have been thinking and fussing about its future. Unable to stop the tide of change, despite some poor executive thinking, the fellows and distinguished engineers never stopped thinking and adapting the platform. When the usage seniors changed, they adapted and survived. I worked in Poughkeepsie for three years and despite some strangeness, I never felt there was a ‘priesthood’ that believed that the mainframe’s survival was an act of faith.

The same could not be said for the mini-computer. Better documented elsewhere, the history of the DEC, their VAX, Wang and other mini-computer providers is one of pride before a fall. They were so filled with conviction that they were the way forward; they did not adapt and did not survive. The irony is that they called the mainframes the dinosaurs yet they are the devices that are now extinct, replaced with networks of microprocessor based servers and PCs.

For some brevity, I will skip the next part of this story – which might include Unix vs. Linux and today, some might even say PCs and tablets. What each of these has in common is a ‘priesthood’ of people who proclaimed the end of one era, the birth of a new one and did not see the fall before it was too late. I bring this all up because I see the same thing happening again in the gaming industry.

Of all the segments I have ever worked in, the gaming one has the most ‘religious fervor’ – often mixed with a bizarre bigotry. Fanboys rage at each other and the suppliers try hard to play to this audience. Yes, many know there is a bigger audience out there, but it was not the big game makers that produced Farmville, or Angry Birds or even Draw Something. Is this because the big game makers are busy trying to be a film-studio (or even replace film studios)? Maybe.

Maybe it’s that the real money is still in the consoles and the PC games. The smart business people know that they have to ‘milk-that-cow’ harder to keep up with the costs. Moreover, they have fans (shorter version of fanatic after all) that are watching and analyzing each step. Debating over which processor goes in which console and what the effect of its design is compared to another. We do not even need to get started on the wacky debate over each Nvidia and AMD design. Now there is an ever increasingly smaller audience and market arguing about nothing with itself with very increasing stupidity.

So is gaming and are consoles doomed?

No, I suspect they are not. But it is interesting that there is a lesson to be learned from the mainframe. Be careful not to get stuck listening to the ‘priests of the faith’ – listen to the market, not your current customers, and then adapt.

Following adaptation is survival. Who would have guessed game companies would need to learn from the mainframe?