The Next Generation of Consoles is Closer Than You Think

I spend a good bit of my time thinking about the future and game consoles have been a big topic of interest for me over the years. I'd like to make a few predictions on the next generation of systems and what will happen in general as far as hardware is concerned in the gaming industry.

So right now depending on how you look at it, this generation has 2 very successful systems: the Wii and the Xbox360. The reason there is no clear winner right now is because the two focus on fairly different markets. On the one hand you have the 360 and the PS3 which try to be impressive, powerful, HD capable hardcore gaming machines. Nintendo however decided to just not even compete at all with them this generation and sell what is basically an over-clocked GameCube and focus their attention on a new controller paradigm with the "wii-mote." Nintendo's focus on casual gaming and making their system more accessible to those who may have never owned a system before really helped the system flourish. However, as while the system has technically done very well as it has sold about as many as the 360 & PS3 combined have...it's not selling many games. And what good is a game system if no one really buys any games for it? Also another problem for the system is that it has not aged well. As the Wii was very similar to the GameCube (in both design and power) developers had already maxed out it's potential within its first year of release. More importantly though is its lack of HD capabilities. When the Wii launched not many people had HDTVs yet, but today they have become commonplace in the US and it's getting rare to find someone that doesn't have a TV that pushes at least 720p. This makes the Wii with it's max of 480p (anamorphic) look awfully "jaggie" and/or blurry to someone who's grown accustomed to a higher resolution.

Sony went the opposite route in trying to make the PS3 the premium game console aimed almost strictly for hardcore gamers. This would have probably worked, if the system was even noticeably more powerful than the 360, which came out a year before it did. Hardcore gamers always want the best of the best experience (just look at how much money PC gamers spend every year on hardware), but even they have a tough time telling the difference between the graphics, physics and AI on the two systems. Top on then the fact that PS3 has always been the most expensive, mainly thanks to the inclusion of BluRay and has stayed above $300 until just recently (which many have claimed to be the most you can possibly sell a successful console for). There are many other things I could say about the PS3, but they're beyond the scope of what I'm discussing here today.

I would call the 360 the most successful console, even though the Wii has sold more systems, as they sell more actual games. First off they beat the other two to the party by a year and established a first mover advantage. But, more importantly I'd say is that they focus on the entire gaming market. Nintendo may be content with the casuals, and Sony tries really hard to win over the hard-core, but Microsoft being who they are want the entire pie to themselves. Luckily here, unlike the PC realm, this benefits everyone as it causes them to compete more aggressively. Almost every 3rd party developer I've read about says that the 360 has the easiest development environment of all the systems. Nintendo has the middle here, but they've done what it always has done and that is focus on selling their own games, and seemingly could care less if any 3rd parties are really successful or not. And Sony, from what I understand, has the most difficult of them all...which they also had in the last generation, but they could get away with it then as the PS2 had a huge market-share advantage that they don't have this go round. The other big advantage the Xbox has is the Xbox Live service, which some would say is the number one thing they have going for them. Sony's PlayStation Network still seems to be playing catch up and Nintendo's online services are all but non-existent.

Anyway, enough about the past/present...what will these guys be doing in the future? Next Christmas Microsoft and Sony will both be releasing their own motion control systems to finally compete directly with the Wii. Microsoft has opted to go completely controller free with it's Project Natal (codename) using a 3D camera system and motion recognition software, and Sony seems to be trying to find some sort of middle-ground with a very complex remote/pointer combined with the eyeToy. This has grave implications for Nintendo. Also, as while I'm not so sure about Sony, Microsoft has been trying very hard to cater to Nintendo's userbase with the addition of more casual/arcade games and even an Avatar system that is ridiculously similar to Nintendo's Mii system.

With the 360 and PS3 directly competing with the Wii now, Nintendo will be forced to respond. With it's competition capable of much more advanced graphics, let alone a 1080p resolution the appeal of the Wii will become almost non-existent unless you're wanting to play a first party game. As while Sony announced a lofty 10 year life cycle for the PS3 and similar expectations are unofficially expected with 360, Nintendo never made such claim. They're practically the originators of the 5 year life cycle so if they follow their past tradition we should already be expecting a new system in 2011. This will also give them just enough time to see what their competition's final motion systems look like in case they want to borrow something for their next system. I would be absolutely shocked if we do not see a new Nintendo system just in time for the 2011 Christmas season. I wouldn't be that surprised if it even showed up next year as a supposed refresh called "WiiHD" or something of that sort, that merely builds on top of what the Wii has done but adds the ability for 1080p (at the very lease 720p) resolution with a bit more RAM and maybe even a dual-core version of the current processor. They might even market it as if it wasn't even really a new system...but simply an upgrade. Whatever they do, it will have to be able to compete with the 360 and PS3 more directly in terms of graphics. I can only hope they do it right and give us something that actually surpasses them, more importantly in the realm of physics, which matter alot more when you are quasi-interacting with them somewhat physically rather with simple button presses. They will also have to have a hard drive built in, there really is no excuse anymore. But, at the end of the day...even if the next Nintendo system is on par or even a little better than the 360/PS3 it won't matter long when the other guys release their next systems.

Next up I'm going to talk about the PS4 and the next-gen Xbox at the same time, as they're already so similar. As some people have trouble differentiating between the graphics of a PS2 and a PS3 or an Xbox vs an Xbox360, they're all really gonna have to try hard to give the average gamer a reason to upgrade. First off, games need to run at 60 fps rather than the 30 we've grown accustomed to as good-enough. Next up 1080p is here, and gamers expect not just 1920x1080 resolution, but good anti-aliasing on top of it. As Microsoft required a minimum of 4xAA@720p with the 360, MS needs to require 8xAA@1080p on their next system. Next up more dynamic animation systems need to become the norm. A few games played around with the first generation of this via Natural Motion's Endorphin, but now it's time to take it to the next level, which faster processors and more RAM will certainly help with. Not only do canned animations need to be all but done away with, but we need actual muscular/skeletal simulation systems like they use in pre-rendered CG movies. Obviously much more advanced physics and particle effects will help too. The next thing that needs to become the norm is the use of High Dynamic Range (HDR). 24-bit color scenes with 32-bit shading and textures (sometimes not even that) might fly for now, but the next gen needs to take advantage of 64bit rendering techniques and the 30 & 36 bit color HDTVs many people now have sitting in their living rooms. Another big thing will be real 3DTV. As Sony's already talking about doing it with the PS3, the next gen will have to be able to support your new Shutter Glasses, Vertical Stereo Prism LCDs or maybe even some Video Goggles.

Now all these graphical details are nice, and in my opinion should be pretty much mandatory for any new systems that launches as of you reading this, but what will really take things to the next level will be Real-Time Ray Tracing (RTRT). People have been doing experiments with it for years, but now it's almost within our grasp. If you have a cluster of PCs you can already do it. I've seen one demo that uses 3 PS3s, so obviously a triple-core Cell processor (with 21 SPEs) should be capable of it...but triple-core? Isn't that what the 360 already has? And many PCs are now coming with quad-core CPUs (6 & 8 core as soon as next year)...so obviously they'll have to out do that...right? I also expect both Sony and Microsoft to have new systems no earlier than 2012, and no later than 2014.

I have a big hunch Microsoft will return into the arms of Intel with it's next system. It tried to make it's own custom chip with the 360, but from what I've read it hasn't saved them nearly as much money as they had hoped as commodity chips' cost have dropped much faster. I expect the next Xbox to have at least a quad, if not an octo-core Intel i9 CPU. However, I could be wrong...like I said I have no actual information to point me to this. They could very well license a new 6-core version of the IBM chip they have plus some of the Cell's SPEs (vector co-processors) tacked on. Anyway, assuming they go the Intel route my gut tells me they will, I could also see them easily go for using the upcoming Larrabee GPU too. Intel's still-unreleased Larrabee can run traditional rasterization (Direct3D/OpenGL), but it really shines when used for RTRT. I also expect Microsoft and Sony to finally come to some sort of agreement so that the Xbox will finally have a BluRay drive in it too.

Now Sony will almost definitely go with a new revision of the Cell processor, as they spent so much time and money helping develop it, I don't think it will be too easy for them to abandon it, especially after they failed to really make any money off it this generation. If they do they'll certainly want a more powerful setup, but luckily the Cell has always been designed to scale up for larger multi-core configurations. I'd expect about somewhere between a 4 to 8 core configuration here as well. And as while the PS3 had 7 SPEs, I couldn't see this one having any less than 16, probably more like 32, maybe even 64 as Sony will really want to try to do a better job of one-uping Microsoft on having the more powerful system. Then they'll probably put another Nvidia GPU in the system, maybe even a dual-core there too. Now on the flip-side I did see a rumor recently that Sony's courting Intel to let them have the Larrabee GPU exclusive to the PS4, so maybe I've got the two backwards? I do seriously doubt though that Sony would use an IBM CPU paired with an Intel GPU...if someone goes Larrabee, they'll most likely be using an Intel processor too.

Now what I'd really love to see here is Nintendo come and surprise us out of left field using AMD's next generation CPU that has GPU/vector processor cores built-in to it all in one chip...but I'd call that one a long shot as I seriously doubt it will be ready in time for the timeframe I'm expecting the next Nintendo system out by...but they have surprised us before I guess. I completely expect them to stick with the Wii-mote concept, but maybe they'll come up with something even cooler, like real VR Gloves (not that PowerGlove bullsh*t)?

One last thing...RAM. Both the Xbox360 and PS3 have a total 512MB of RAM available to both the system and graphics card. The 360 has an additional 10MB embedded in it's GPU (think sort of like how the CPU has L2 & L3 cache). Then the poor Wii only has 91MB of RAM. As the average PC today comes with 3 or 4 GB of RAM and most video cards have a gig of their own RAM too, I'd expect both the 360 and PS3 to have about 4GB total (shared), and I really hope Nintendo's next system has at least 1GB, if not 4 like the others.

Regardless of what happens...the future is as always, exciting...and it's gonna be all about even higher quality graphics that makes you glad to own a HDTV; multiple-core processors that can do much more realistic physics and better AI, more focus on internet connectivity whether that be in multiplayer or direct downloads...and if I'm right, it'll all start to show up pretty damn soon. I expect to see a new Wii in 2011, followed by a new Xbox in 2012 and then a new PlayStation in 2013. Personally, I'd like to see everyone work together on one unified standard, but for all we know Cloud Gaming may swoop in and eliminate the need for even needing much of a console in the next 5-10 years.

Deter videogame piracy, rentals and used sales with your pricing

Alot of big game companies have been whining and complaining about the rise in game rentals and used game sales over the past few years. They've been worried about piracy for much longer. All of these problems are directly related to the overinflated pricing of the average videogame.

Now I've been making this argument for over 10 years now, but apparently it's time to go over it again. All these problems are never going to go away as long as the industry keeps trying to treat the symptoms rather than eliminate the causes.

There are many reasons why people don't buy brand new games, whether it be way of buying used, borrowing from a friend, renting or piracy. In this post I'm going to focus on pricing, but some other reasons are poor quality, or perceived questionable quality. By that last bit, I mean how many gamers don't really know whether a game is good or not and don't want to risk their hard earned cash on it unless they know it's good beforehand. Besides the obvious solution of focusing more on quality (aka fun), offering free demos would easily alleviate the fear of buying a game that sucks. That being said, most demos I've played in the last couple years barely even give you a whole level to explore, so the gamer still isn't sure if they like your game or not even after playing your pathetic excuse for a demo.

So onto the easiest, quickest way to work on a solution: pricing. To put it frankly, videogames cost too much. Sure, there are a hundred and one excuses as to why they cost so much, but just like your business gamers only care about the bottom line. $50 is too much for a game, and $60 is absolutely too much for a game. The game industry loves to brag and boast at how much gross revenue they are bringing in in comparison to the music and movie industries; however, if you look at the actual number of products sold it still pales in comparison.

This summer the movie industry was disappointed in the new X-Files movie's opening box office sales of only $10.2 million in its opening weekend (just as a note, I'm not picking on the X-Files for any reason other than it was the first result for 'poor box office'). So, to do some quick anecdotal math...if each ticket was sold for $10 (which in my town they're more close to $7) then that means over a million tickets were sold. And that's just the opening weekend, I would say it's safe to assume that they continued to sell more after the opening weekend, and when it comes out on video a few more million will be sold. Now, in the movie industry this is considered to be so-so, or maybe even a failure; however, if a game was to sell a million copies or more it would be considered a blockbuster!

Whether we like to admit it or not, gaming has still yet to become mainstream, and I'd wager the number one reason is price. The rising budgets of $5-10 million for a AAA game's production are given as the primary reason the average Xbox360 and PS3 game cost $60. According to Wikipedia the X-Files movie mentioned before had a budget of $30,000,000. That would be an outrageous budget for a game, but the industry still wants to play the numbers like they're more successful than the film industry. Now also, the Wikipedia article claims the movie has grossed over $65 million so far simply from box office. So how come this supposed flop has been seen by over 6.5 million people before it has even been released to video...while one of the industry's most popular games of recent, Halo 3, has just only sold a little over 8 million copies? Seriously, there are over 6.7 billion people on this planet, yet only 1 in a 1000 people have played one of the most popular games ever (now of course to be fair over half of that figure comes from areas that couldn't ever afford to be gamers).

Now I'm not an expert in economics, but the basic principals of supply and demand are not hard to grasp. If you want to expand your user base, lower your price. Keep lowering it gradually over time until the market is saturated. With the enormous popularity of DVDs in the past decade, the movie industry seemed to have found a sweet spot of $20. At that price point many people felt comfortable enough to buy movies they had only seen trailers of or their friends had told them were good. People are much more willing to take a gamble of potentially buying a bad movie when there's only $20 at risk. However, with the average next-gen game costing three times that people are going to be 3 times more choosy. It has been suggested that the average gamer will spend $1000 per year on gaming (including consoles and peripherals), however keep in mind that is most likely for hard-core gamers which are still at the end of the day a niche market. I'd bet that for ever 1 gamer you can walk into the living room of and find a big rack of games, there are 10 if not 100 people where you will find a similar rack of DVD movies. Once again, I blame this on cost of entry. Blu-ray players have still yet to take off at prices of $200+ and it will probably not be until you can buy one for $100 that the average American will finally buy one. Now in game consoles, during the 8-bit through 32-bit generations all the consoles eventually dropped to $100 price point or less, but the original Xbox and PS2 have still yet to hit that price and probably never will. Not only do individual game prices need to drop, but so do the consoles that play them. The market has also shown that people do not want to have to choose between competing formats. HD-DVD and Beta both held back the home video industry until a clear winner was picked. Now I may be personally biased...but I see the only solution to the problem be an open standard for game consoles, but my experience in recent years has show that the industry is far from ready to accept this.

So, which would a game developer prefer? Sell 3 million copies at $60 ($180M gross) or 30 million at $20 ($600M). I think the benefits are obvious right there..but now, lets get back to the original topic: used game sales. If a gamer can buy a used copy of a game for $30-45 rather than $60 for a new copy, of course they're going to at the very least consider it. However, if your brand new game is sold at $20, why would anyone in their right mind want to buy a used copy for $15? If the game industry is tired of Game Stop and the like selling their games at these reduced prices, then they are going to have to reduce their own prices to compete.

Not only would this thwart the proliferation of used game resellers, this would also deter rentals and piracy. Once again, you ask a pirate why they don't buy games very often and I can guarantee you one of their reasons will be the cost is too high. Things like DRM and one time use DLC only attempt to block these people's attempts, but does nothing to stop their motives. In fact it actually drives many gamers who might normally buy your game to download a pirated copy instead. Just look at the backlash to many recent EA PC releases.

Now the flip side of the coin is how to accomplish such a massive price drop. Sadly, if you drop your AAA titles to launch at a $20-30 price point quite a few people will see it as a sign your game is not very good. At first the only safe way to do this would be with big name franchises which are guaranteed to sell, like a Madden or a Halo or GTA. New franchises could easily be hurt during this transition. Also, if one company decided to go this route while their competitors stuck with the old pricing, once again human psychology would put you at an unfavorable place, with people almost always assuming the worst. You can't come to an agreement with your competitors to all drop your prices at the same time, or else you might get in trouble for some sort of price-fixing or something. So the only way for this to really happen is slowly, and with big name titles. Of course, this has been tried before to some extent, a few years back many PC games were sold at almost half the price of their console counterparts, but it couldn't stop the fact that hardcore gaming was dying in that market regardless..or perhaps it was just too little too late. Sega tried selling it's NFL 2K5 at $20 to better compete with Madden, but then EA bought exclusive rights to all NFL games so that killed that little experiment as well.

Honestly the best place to try out a new pricing level is in the online sales arena (ala Xbox Marketplace, Steam or even the iPhone App Store). However, this still has the problem that to make money at this lower price point we need many many more consoles in potential buyers hands first. So, this is a complicated and potentially dangerous concept at this point really...however, it's going to have to happen at some point if the game industry ever wants to become a truly mass market medium. The same goes for stopping used game sales from out numbering new game sales, which is going to eventually happen if it hasn't already with the current pricing schemes.

$20-30 games will hopefully eventually be the norm, but the entire industry will have to work together. The nice part is it's a win-win situation for both developers and gamers alike...it's just a matter of time.