The Decline of Console Video Games is Upon Us

Synopsis: With the “most anticipated holiday gaming season of all-time” yielding flat year-to-year software sales in 2011, it’s time to come to terms with the decline of the console video game market. The rise of digital distribution offers inexpensive outlets for playing video games on personal computers and mobile phones, devices already owned by consumers and considered “necessities” by consumers. Compare that with console video games, which require expensive purchases of dedicated hardware that play sixty-dollar video games, a price point that console game developers must maintain to continue their business model. The sales of new hardware have traditionally boosted the sales of video game software, but there is little reason to pour money into game development for new consoles when there is no guarantee that consumers will adopt new hardware. Established console video game developers and publishers will likely move their business models to the personal computer. From there, they can support and develop proprietary gaming services such as Battle.net 2.0 and Origin, gaming services that evade the distribution fees associated with physical retail and console game distribution. For every other developer, Steam and Good Old Games can provide a stable market…something the console video game market will not.

Note A: Minor edits have been made for general clarity.

Note B: An addendum was published at the bottom of this article on September 27, 2011. It should address any arguments regarding the “convenience” of modern video game consoles.

Update on October 11, 2011: Paragraph edits have been made for readability.

August of 2011 marked the fourth straight month of double-digit, year-over-year declines for retail video games in the United States. With NFL Roster Update 2012 pushed back into September, software sales plummeted by a staggering forty percent.* Seven of the first eight months in 2011 have now seen a decline in sales when compared with 2010. Only a three-percent sales increase in February has saved the industry from a full year of “bad months”.* Those eight months have been carried by the sales of hardware and accessories, and software sales have tumbled an alarming ten percent.* July and August of 2011 were the worst months for retail video games in the United States since 2006, sales tallies that haven’t been witnessed since the months before Sony PlayStation 3 and Nintendo Wii were available to the public.

The big manufacturers, publishers, and developers that run the console video game industry are counting on the most hyped and anticipated holiday release schedule in the history of the video game industry to save the ship. Deus Ex: Human Revolution, Gears of War 3, Dark Souls, NBA 2K12, Just Dance 3, Forza Motorsport 4, Batman: Arkham City, Battlefield 3, Uncharted 3: Drake’s Deception, Call of Duty: Modern Warfare 3, Assassin’s Creed Revelations, Halo: Combat Evolved Anniversary Edition, The Legend of Zelda: Skyward Sword, Super Mario 3D Land, Mario Kart 7, and Star Wars: The Old Republic. The goal of this game lineup is to help the retail market break even for the year. Yes, break even. If it doesn’t, this year will mark the third straight year of declining sales in retail since 2008. So, uh, yeah. It’s time to cut the bullshit. After several years of both record sales and “DIGITAL IS GONA TAEK OVER MANN”, retail video game sales are now contracting. By extension, the console video game market that overwhelmingly relies on retail is contracting. And instead of touting some happy-faced narrative about a recession-proof industry, it’s time to explain what is happening and how companies plan to deal with it. If you own an Xbox 360 or a PlayStation 3 or a Nintendo Wii, you’ll want to listen up. I don’t have a lot of good news to share with you.

We need to talk about everybody’s favorite video game console before we start. In November of 2006, Nintendo released their Wii for the world to enjoy and the pack-in software was Wii Sports. Take your pick of whether the game goes down as the most important video game since 1972’s Pong or 1962’s SpaceWar!. With an assist from the unprecedented success of 2004’s World of Warcraft (which boasted seven million paying subscribers by 2006), the Casual Gaming Revolution of 2006-2008 began. As with all revolutions, there was a lot of concern and resentment. Nobody who spent the last decade playing games on both the personal computer and the first two PlayStations wanted to hear how Wii Sports or Wii Play or Wii Fit were the leap forward for video games as a medium. They certainly didn’t want to hear about this in 2007. Software needed no help from crappy mini-game collections to become what will probably be recognized as the greatest year in the history of console video games. Super Mario Galaxy, Portal, BioShock, Call of Duty 4: Modern Warfare, Halo 3, The Elder Scrolls IV: Oblivion, God of War II, Rock Band, Mass Effect, Crysis, Uncharted: Drake’s Fortune, Team Fortress 2, Metroid Prime 3: Corruption, Guitar Hero III: Legends of Rock. All of these games are considered by somebody, somewhere, to be some of the best games in their genres, if not near the top of the food chain. (Not necessarily the opinion of this person, but more of a general consensus.)

With this standout lineup of video games, an established audience and a new audience got to know each other. For the first time, so-called hardcore gamers and casual gamers were mingling en masse, teaming up to conquer their favorite music with their favorite plastic instruments. They were experiencing the joys that could only come from reducing the horrors of urban warfare into nine-versus-nine multiplayer matches. People felt they were enjoying some of the best products this medium has ever witnessed and they were doing it together. In 2006, United States retail video game sales set a record of thirteen-and-a-half-billion dollars.* In 2007, that number increased thirty-three percent.* In 2008, sales ascended towards a ridiculous twenty-two-billion dollars.* Everybody was making money and everybody was getting video games that they wanted to play. It was fantastic.

You can play a guitar. Now do it on expert. (Credit: Harmonix Music Systems*)

Nintendo introduced a new audience to the wonderful world of video games and made a lot of people rich. But let’s think about how the company did this. The Video Game Crash of 1983 occurred when American consumers grew frustrated with the quality of console video games, giving up the product in such force that “video games” and “Atari” became dirty words. Nintendo built their monopoly on the lessons of this crash. They used those lessons to forego “video games” and rebranded the Family Computer as an “Entertainment System”. They fixed price points, strongarmed retailers, and used quality control methods that would make ardent defenders of the free market cringe. Nintendo saw what happened to Atari and did everything in their power to prevent another market bubble. They wanted to make sure any new consumers became permanent customers. Two decades later, those permanent customers were now Sony’s customers. Sony was the new Nintendo, and Nintendo had to do something about it. In order to stymie their calamitous decline in relevance since the release of the Nintendo 64, the company used their Nintendo Wii to court the audiences who were turned off by the complexity of the newer video games. In successfully doing so, Nintendo created a new market bubble.

Nintendo would profit handsomely in the half-decade following their launch of the Wii. Only this time, the inevitable collapse of the bubble created a different outcome. New gamers didn’t stop playing the games. Instead, they decided that video games were only worth their time and effort if they were convenient enough. The games would only be worth their time if they could play them on a cell phone and kill the minutes between the life moments that define their Facebook posts. Casual gamers gunned for the inexpensive, mediocre product on both mobile devices and social networking sites, creating a consumer base that now numbers in the hundreds of millions, creating a world where the biggest video game craze in the last two years of popular culture is a crappy puzzle game with birds in it. Nintendo helped create the market for video games on both Apple’s iPhone and Facebook’s Facebook, a product that has now destroyed the Nintendo business model for portable video games. (First, Nintendo breaches a partnership with Sony to create an optical drive add-on for the Super Nintendo, leading to the creation of the Sony PlayStation. Then, Nintendo hits it big with the Wii, creating the consumer market that competes with their portable devices. Nintendo has some fantastic habit of crafting their own worst enemy.)

So yeah, the market didn’t crash this time. That’s because there is an audience who would respond to a Mad Max-style collapse of civilization by jumping in a foxhole and getting their Game Boy on. What happened this time was actually worse. The Casual Gaming Revolution of 2006-2008 created a new market that now competes with the boys and girls who create games for consoles. The overwhelming majority of new consumers are getting their first significant gaming experience while playing the games in a browser on their computer or their smartphone. When the revolution settled, the same audiences playing games on their Xbox or PlayStation in 2006 remained the same people playing video games on those devices in 2011. The actual growth in console video games was minimal. And while 2006 may have been a record year for retail sales in the States, it was also a year that Electronic Arts, Activision, and Ubisoft did lousy business. Thanks to a number of intense economic forces, the situation for those publishers is even worse.

Those third-party publishers also hedged their own bet. A couple of years prior to the release of the Wii, Activision, Electronic Arts, and their biggest competitors took a look at the success of Xbox Live and decided to stage their own mutiny. They lost confidence in the personal computer as a lead platform for game development. By 2008, computer gaming was an afterthought for those guys, an afterthought that was mugged in the streets when people got word of the copy-protection packaged with the anticipated 2007 god game Spore. Computer video game lovechild Valve Corporation looked at the open-source nature of computer video game development and saw something different. In 2004, the company released the anticipated sequel to 1998’s Half-Life. As I’m sure you’re aware, the software came with a catch. In order to activate Half-Life 2, the player would have to utilize Steam, a proprietary “digital distribution” service created by Valve. Although Steam would suffer from a horrendous launch (and would suffer from other issues for years to come), Half-Life 2 would sell over ten-million copies and immediately legitimize the service. The remaining beaten and battered computer game developers were eager to sell their wares in a stable marketplace, and Steam represented the most stable marketplace they could find.

Valve obliged, and the company would go nearly unopposed in this new market for the digital distribution of computer video games. Early in 2011, Forbes estimated that Valve controls two-thirds of this digital market.* Two-thirds. Instead of being cast as a villain, Valve took the fickle nature of computer video game fans and turned them into a world of slobbering fanboys. Nobody gives a crap that Steam is just a user-friendly version of digital rights management because “OH MY GOD SUMMER SALEZ!1!” Valve compromised. When they transformed computer video games from a boxed, retail good into a consumable impulse purchase, they priced the games accordingly. Valve used consumer goodwill as a marketing tool, selling already-inexpensive software during giveaways that have become the stuff of computer game legend. In doing so, the company has earned a “benevolent dictator” status, something no company has accomplished (at least here in the States) since Nintendo did it with their Entertainment System.

Do you see the connection here? Do you see what Steam, the iPhone, and Facebook all have in common? The internet destroyed print journalism, it’s destroying television, and now, it’s “destroying video games”. You can now make video games for internet browsers, for mobile phones, for blenders, for toasters, and you can price your product in ways that was simply impossible during the era of boxed video games. And how do you compete with an established, expensive product? You flood the market with a less expensive product. “But didn’t that destroy the market for console video games back in 1983?” There’s a couple of differences. Valve enforces the quality of all games on Steam and computer gamers are more knowledgeable about the games than any other demographic, while the people playing mobile phone games and Facebook games are too stupid to recognize a bad product when they see it. Most importantly, you don’t have to worry about a physical oversaturation of the market. When American consumers walked into toy stores during the holiday season of 1983 and saw piles of video games that were marked down by as much as ninety percent of their original price, it affirmed the consensus that video games were a fad and that video games were no longer cool. That scenario is unlikely today. So now, it doesn’t matter if you give the games away for a couple of dollars. The goal is to get people buying the games and get the player hooked. You can make the money back later. Do you think it’s any surprise that the biggest buzz trend in today’s video game industry is “free-to-play”, where you give a game away for free and find a way to charge the player at a later date?

At the turn of the century, the genius of the men and women who greenlight and develop games for Electronic Arts and Activision and Sony used their bankrolls to build loud and expensive video games that would prevent smaller developers and publishers from making any headway in the market. Those companies cannot do that anymore. The market is too diverse and too open. Console game developers now have to compete side-by-side and they have to do it in a terrible economy, where “inexpensive” is a welcome form of relief. The problem? Those companies have to reap what they created. They conditioned anyone playing a PlayStation 2 or an Xbox to reject video games that did not feature “production values”. They now wear that around their neck and it has had a profound impact on the kinds of games they can sell. In the nineties and the following decade, console video games were the “inbetween” for all the forms of game distribution; not quite the graphical moxy of computer games, but easier to set up and far less expensive; not quite as convenient and cheap as portable games, but better product quality; not quite as social or inexpensive as a day at the arcades, but more convenient. Now, with hundreds of millions of people playing terrible games on Facebook, hundreds of millions playing terrible games on their mobile phones, and tens of millions fawning over the vast expanses of Gabe Newell’s body, it’s different. Console video games are now the most expensive product, featuring the highest development costs, the most expensive software, the least variety in software, and the fewest outlets for people to play those games. There is nothing their creators can do about it. The status of console video games as the most pronounced market in the industry is prime to burn and everybody selling games in that market is positioning themselves for a way out.

Oh, how the tables have turned. A decade earlier, computer video games were circlejerk bloodsport for nerds with too much money on their hands and nobody was thinking about whether a cell phone could play video games. (Well, Nokia was, but they don’t want to talk about that, alright?*) Today, the personal computer and the smartphone are “necessities”. People need them for things other than games. And thanks to some restraint from game developers, low-to-mid-end versions of those devices can play most of the relevant games. (Obviously, some of that restraint was generated through multi-platform releases that were optimized for the aging video game consoles.) Companies finally figured out there’s a much larger market for “Can it run World of Warcraft?” than “Can it run Crysis?” (Though keep in mind that companies aren’t prohibited from creating games that push high-end machines. They just have to make sure that grandma can pull out her laptop and play StarCraft II with your account while you’re at school.) And thanks to these digital business models, nearly anybody can find games they like and play them for cheap.

As for consoles? If you want the privilege of playing games for a PlayStation 3 or an Xbox 360, you need to buy the hardware. That’s 200 dollars right there. With disposable income on the downs, hardware dedicated to video games is getting the absolute shit kicked out of it. The Nintendo 3DS has become the first victim. Consoles will immediately follow suit if their creators don’t continue to adjust their strategies. I spent most of Microsoft’s E3 2011 Press Conference savaging the company for introducing “UFC on Xbox” and “Microsoft Bing on Xbox” and “YouTube on Xbox” instead of talking about the games. There’s a reason Jack Tretton used the same stage at E3 to sell the world on Hulu Plus. Turns out they had the right idea. Televisions are now coming packaged with internet-ready hardware. While they’re currently designed to only authorize vendors and services created by the television manufacturer, they’ll eventually transform into something no different than your computer or your phone. So why would you bother purchasing an Xbox 360 to watch NetFlix when your next television is already built to do it? “Home entertainment” options are being built into televisions for use on the first day. For that reason, the Xbox 360 and the Sony PlayStation 3 need to secure a status as “home entertainment center that plays video games” instead of a “video game console” to have a chance. And not only do they have to play video games, these devices have to play video games whose best qualities can’t be found on any other platform. The games have to be louder, meaner, and have access to a time machine. It can’t be any other way, and that’s precisely the problem.

The knee-jerk response to “Console video games are too expensive!” is “Just wait for the games to drop in price.” For the last decade, the companies that created the best games for consoles did it by leveraging their budgets, much in the way the movie industry fell back on “summer blockbusters” to separate themselves from television during the seventies. In doing this, these companies drove the cost of console video game development towards unprecedented and unsustainable territory. They cannot compete with computer games and mobile games by going cheaper. Consumers have to pay sixty dollars and they have to do it in droves for console video games to continue making money. It is necessary for the continued success of the platform. In protecting that price point, these companies have decided that allowing your friends to “play on your account” or “share the game” is harmful to their bottom line. When companies maximized processing power for the current-generation consoles in 2007 and 2008, a number of developers used it as an excuse to remove split-screen multiplayer from their games, diverting these co-operative and versus modes through the online services in order to free up more processing power. If you want to play the game with your friend, you can go buy your own copy and go play on Xbox Live.

I sold six copies of 2002’s Warcraft III: Reign of Chaos and six copies of its 2003 expansion pack The Frozen Throne by allowing friends to create accounts using my game license. They don’t want people doing that anymore. There’s more money in “I’d let you play, but you’d mess up my account, I guess you’ll have to buy your own copy.” Somebody has probably explained to the major publishers that they’re casting off potential customers by doing this. I doubt they really give a crap. Instead of figuring out how they’re going to get more people buying the games, they’re trying to figure out how to get the same people to pay more for the same games. (What, you thought Battle.net 2.0 was about improving customer satisfaction?) Ask the sports trading card industry how that worked out for them. Ask the comic book industry how that turned out for them. Just make sure you do it before Upper Deck goes out of business and the Marvel comic book characters can only retain their relevance through licensing in film and game formats.

It’s a bizarre situation. “Let’s get these fools to pay more for the same game!” has created a market for sixty-dollar shareware, where you purchase a half-finished game at full price and unlock the full version with expensive libraries of downloadable content. And even as companies restrict their software in a manner that prevents new customers from accessing it, nobody wants to make the software unless it can reach a large portion of the existing audience. Niche can no longer be competitive in console video games unless you want to be banished to general obscurity in the Xbox Live arcade or the PlayStation Network’s downloadable game library. (Even the supposed indie wunderkind Super Meat Boy sold less than a quarter-of-a-million units on the Xbox 360.*) When you spend upwards of one-hundred-million dollars to develop, market, and distribute a Call of Duty game, you need to make sure that five-million people line up on the first day and buy the game for the full price of admission. For that reason, resources are being funneled into building and marketing a smaller selection of console video games that take fewer and safer bets on what software can and will be successful.

That’s the reason for your four-year stranglehold on the market by thirty-one flavors of first-and-third-person tactical shooters. It’s what the focus testers want. Instead of asking what can be done to make this market for video games more diverse, they’re seeing what other beloved franchises can be mauled and mangled into shooters. 1997’s Fallout and its 1998 sequel are two of the most beloved role-playing games of all-time. Turn the franchise into shooters! X-COM: UFO Defense is one of the best strategy games ever released. Turn it into a shooter!* The Syndicate franchise remains one of the standout examples in the history of real-time tactics. Turn it into a shooter!* I thought the video game industry already learned this lesson. The success of a video game console isn’t dictated by a handful of great video games, but a sizable category of good video games spread across numerous genres. If you don’t want to believe that, you can go pull your Nintendo 64 out of the closet and continue to ponder why the device associated with platformers, first-person shooters for people who never played first-person shooters, and party games marked the beginning of a decline in both relevance and sales of Nintendo hardware. We’re now repeating that same story with a different class of game.

Traditionally, reviving these flagging software sales required new hardware. It was simple: New hardware offered better graphics and more processing power to spend on more-advanced game concepts. When your mom or dad pulled out the checkbook, they grudgingly accepted this as a necessary evil for playing video games. Right now, they don’t have the money to buy any new hardware. That predicament has extended the length of this console generation and yielded the largest hardware base in the history of console video games, a roster of three successful video game consoles and nearly 190 million units. Thanks to the spiraling cost of console game development, you have a very dysfunctional and dangerous situation. Microsoft, Nintendo, or Sony will not be able to sell a more advanced video game console without significant support from third-party publishers and developers. But at the same time, those publishers and developers won’t make software that utilizes the full potential of this new hardware unless the hardware is sold by the tens of millions. They would rather develop games for the existing consoles and their massive user bases than take a chance on new and unproven hardware, even if it’s better hardware. As a result, consumers will have no incentive to purchase that hardware and stagnation will continue. You’ll get to see this cycle in full force when Nintendo releases the Wii U in 2012. It’s a shame that we will see very few third-parties explore the fantastic potential of the tablet controller, but it’s the reality of the market. The model that has sustained sales of console video games for the last twenty-five years has been fundamentally broken by both the economy and the current model for console game development.

Only three-hundred dollars to play the exact same games you could play on the
Xbox 360 or PlayStation 3 you already own. Hop in! (Credit: Nintendo*)

When you’re beholden to shareholders that want immediate and substantial gains, you don’t have the ability to be patient. With the disappearance of the console gamers who propped up the industry in 2007 and 2008, minimal growth has been created. If you’re John Riccitiello or Bobby Kotick or Yves Guillemot, there’s only one way to continue your cushy existence as a Chief Executive Officer: You need to create the illusion of growth. You find out who is “fucking over your bottom line” and fuck them back. The major publishers won’t publicly criticise themselves. It’s not that their business model has become outdated, or that the software is too expensive, or that they’re not creating enough ways for players to get access to the games. No. See, they’re not getting their fair share! They worked hard to earn that money! Currently, the battle over what the video game industry “deserves” has been waged through the used video game market. The video game industry has become such a corporate clockwork clusterfuck that the easiest target is the people who buy your video games. Or rather, the thieves who buy some of the video games through a second-hand market and pirate the rest.

When Quantic Dream co-founder Guillaume de Fondaumiere revealed that Heavy Rain sold two million units, he didn’t express gratitude that the game sold two million more units than it ever deserved to. Instead, he bitched that he may have lost as much as ten million Euros in royalties because one-million more people purchased the game when it went to resale.* He blamed the people playing the games rather than, say, GameStop, the company that took a resale model created by FuncoLand and turned it into a billion-dollar racket. That’s because GameStop (along with Wal-Mart) have the American retail video game market by the fucking balls.

When Square-Enix released Deus Ex: Human Revolution in August of 2011, the personal computer version of the game was packaged with coupons for a trial version of the OnLive cloud gaming service. GameStop understands that its business model will vanish in a billion-dollar puff of smoke if digital distribution becomes the accepted standard for all video game purchases. When word of the coupons made its way to GameStop corporate, upper management informed all stores to remove the coupons from the boxes.* Ignore that GameStop has misrepresented opened software as new in the past. Ignore that this was a particularly dick move due to the “you opened it, you can’t return it” nature of computer games and American retail stores. Ignore it, seriously. I tell you to ignore it because Square-Enix did. They apologized to GameStop for failing to inform the retailer that they would be packaging the game with a promotional item designed to compete with their boxed business model. GameStop broke into Square-Enix’s house and Square-Enix apologized to the judge for being home when it happened.

Publishers hate it. They fucking hate it. There’s a whole bunch of people who want to punch Paul Raines in the dick. GameStop came to prominence during the PlayStation 2 days and nobody gave a crap because every third-party publisher worth a damn was making money at the time. The retailer came back to bite a lot of people in the ass. The publishers don’t want to say anything about Sony or Microsoft, either. They hate having to give the console manufacturers their cut for distributing the games on their platforms. Activision C.E.O. Bobby Kotick has implied this. His comments concerning a version of Guitar Hero that could be played without a video game console are not going away.* Today, after retail and distribution fees, a video game publisher usually earns about half the price of a sixty-dollar video game, not including the cut of the check that goes to the developer for programming and creating the game.* When your goal is to get more money out of the same customers, pocketing that additional thirty dollars is precisely where you start.

Why do you think companies want to introduce online subscriptions and legitimize downloadable content in games and genres that never used these business models before? Yeah, retailers get a cut from the sales of the software. But once the player signs up mom’s credit card, it’s smooth sailing between the creator of the game and the consumer’s wallet. When somebody buys the five fifteen-dollar map packs for Call of Duty: Black Ops using Xbox Live, Microsoft sure-as-hell doesn’t pocket half. By selling those map packs, Activision’s thirty-dollar cut from the sale of a game on opening night probably triples over the course of the game’s shelf life. When the next Call of Duty game comes out, they can do it all over again. That’s not enough money going into the pockets of Mr. Kotick. He doesn’t want to pay Microsoft or GameStop a dime. But the retail video game market is stuck in a shithole. Retail is not going away for a while. Publishers have to work with retailers if they want to keep selling console video games. When people respond to “Retail video game sales are declining!” by saying “The market didn’t shrink, those retail sales simply went towards digital distribution!”, that money is not going back into console video games. Downloadable content? Yes. Games? No. Nobody is buying those games digitally and storing them on their consoles. Not when the Red Ring of Death has supplanted the Spanish Flu as the most terrifying pandemic of the last hundred years. Console video games are the only device where the digital distribution of the games has not become an accepted standard and that’s causing them a lot of issues.

So, you can’t get new audiences to play your games. You can’t make the games cheaper. You can’t use new hardware to boost software sales. You can’t wage a war on retail to earn a greater cut of the revenues from console games. And currently, the console video game market is seen as a black hole for disposable income. If your business model relies on console video games, what the hell do you do? Where can you sell your goods without having to incur the nasty costs of distributors and retailers? Where can you provide the next level of video game technology in order to boost your business? How can you save the ship?

For years and years and years, companies became terrified of developing games on the personal computer because it was an open system. Once the software went to market, the company had zero control over it, software piracy and modmaking be damned. Computer game developers gained some level of control over their software through the use of company-created online gaming portals. However, this offered no remedy for single-player games and multiplayer was emulated in numerous forms (Garena, PvPGN, Hamachi) for use with the most popular online video games. The closed systems created by Sony and Microsoft and Nintendo created both a sense of security and a stable price point for the software. Apparently, the success of both Steam and Battle.net 2.0 has finally convinced the other third-party publishers that there are people playing games on computers who will tolerate digital rights management. The copy-protection is far more tacit now.

2009’s League of Legends, 2010’s StarCraft II, and 2011’s Diablo III all use client-server programming similar to what you can find in Massively Multiplayer Online Role-Playing Games, and it is a bitch to emulate. (Not to mention that League of Legends and StarCraft II feature free-to-play game modes, diminishing the incentive to crack these games and make them playable in private venues.) People have been conditioned by those online role-playing games to accept when other genres use the model. Rather than wait for the “digital revolution” to find its way to the consoles, the companies with the capital and the influence will now fall back to the personal computer. They will create their own closed systems in the open system. Their pricing, the pricing required to keep their “SPEND MORE MONEYZ!!1″ business model afloat, can now go unopposed in a private gated community created solely for their games. The grand majority of the thirty dollars being skimmed by the retailer, the publisher, and the distributor can now be theirs. All you have to do is create the service, maintain it, and you’re good to go. Any concerns that your development for this new platform will do away with the social experience created by console video games has now been eliminated by the plummeting price of portable computer technology. A four-hundred-dollar laptop that can be written off as a school or work-related expense, and the consumer can now play the games wherever he wants to. Powerful forces are already moving their chips in to capitalize on this.

In a September of 2011 conference call, graphics hardware creator NVIDIA went on the record to state that computer video game sales will surpass console video game sales by 2014.* If that sounds like a bit of cheerleading from a company synonymous with computer video cards, Electronic Arts (the guys who got their start on the personal computer) are already looking to the example set by Valve and Blizzard. The lead platform for the company’s two biggest upcoming releases (Battlefield 3, Star Wars: The Old Republic) is the personal computer. Battlefield 3 will provide downloadable content through their Origin digital distribution service and The Old Republic will require the use of the service in order to play the game. Not only does this service absolve Electronic Arts of having to give GameStop or Microsoft or Sony its cut, but it also means Electronic Arts doesn’t have to compete with other companies on Steam, where Electronic Arts’ sixty-dollar video games seem awfully out of place in a market that often sells games for pennies on the dollar. (If you’re wondering how come Activision quietly added functionality for both dedicated servers and Local Area Network play into the personal computer version of Call of Duty: Modern Warfare 3, you now know why. Activision is scared shitless that they may have ceded the personal computer market for “The King of Tactical Shooters” to the Battlefield franchise for good.)

Expect other companies to follow. If the leaked Blizzard release calendar is true (and the date of every event listed on the calender has so-far turned out to be accurate), then Battle.net 2.0 will be used to court third-parties by the first half of 2012.* Rumors have suggested the possibility that the next version of Microsoft Windows will be designed to run Xbox 360 games.* In August of 2011, it was announced that the PlayStation 3 version of Counter-Strike: Global Offensive will feature support for the mouse and keyboard and feature cross-hardware matchmaking between PlayStation owners and computer gamers. These players will be matched based on the performance rather than their input method.* This marks the first notable instance since the 2000 Dreamcast release of Quake III Arena where one game developer asked “But what about the players using a controller?” and another replied with “Let the mouse-and-keyboard players sort ‘em out.” This way, PlayStation 3 owners will have an opportunity to become comfortable with a mouse and keyboard. If video game consoles drop off the face of the Earth, then Valve can continue selling games to those players without a hitch. The rush to set up communities where like-minded fanboys can pay full price to have their personal information sold to third-parties is underway. The only question is what companies will have the money to set up these portals and where the smaller companies will rely on their services.

Computer gamers can begin to rejoice. The biggest companies in the video game industry want your money again, and it’s probably going to take “Console Video Games: King of The Industry” with it. The only uncertainty is the timeline for the transformation. It could happen immediately, using a dismal holiday 2011 showing as a catalyst, much like Atari’s fourth quarter sales in 1982 became the catalyst for ruin in 1983. It could happen over the next five years. That much, I can’t tell you. Here’s what I know: The success of the console video game market is now the one segment of the video game market that requires a user base with disposable income. People do not have disposable income and there is nothing suggesting that they will gain access to disposable income in the near-future. Regardless of your political persuasion, I don’t have to mince words when I say the return of disposable income in the West requires politicians who know what the fuck they are doing. And whether your elected officials are incompetent, corrupt, or the more-likely combination of both, it is not in their immediate interest to fix this shit. (Certainly not in the States, where we don’t have a recent history of burning cars when things get messy.)

Instead, people will continue to find entertainment and pacifism in video games that can be bought for cheap and played on their mobile phones and their personal computers or played for free in their internet browser. And when your console gaming overlords continue making less software for the consoles and focus their efforts on a digital future that can be found elsewhere, and you wonder why your overlords aren’t focusing their efforts on developing games for the Xbox 360 or the PlayStation 3, I’ll be happy to respond with the computer fanboy response: Now you fuckers get to know how we felt for the last six years. Enjoy.

Addendum (Published September 27, 2011): I mentioned that video game consoles were once considered an intermediary for all the video game formats. They were once considered a more convenient device for playing video games than a personal computer. In my infinite wisdom, I never explained why. It didn’t cross my mind. That’s because I’m willing to boot up DOSBox and go command line on a game’s ass or kick the shit out of the Windows registry if it’s a necessary evil for playing the games. Convenience doesn’t mean a lot to me. I forgot to explain why “convenience” is no longer a valid consumer stance on the console gaming experience.

After all, “convenience” was the great equalizer for video game consoles in their battle with the personal computer. Sony and Microsoft took the best features in the desktop computer of the late-nineties (powerful graphics hardware, hard drives, optical drives, internet capabilities), put them in a case, and then sold the hardware at a loss, knowing they would eventually get the money back through software sales. By limiting the hardware to a small number of configurations, developers migrating from computer game development to console game development could reasonably emulate the computer video game experience while eliminating the nightmare that comes with hardware configuration testing. Consumers were getting “a personal computer that plays video games” without all of its messy side-effects: Hardware issues, digital rights management, patches, game installation, and rampant cheating in online games. You probably know where I’m going with this narrative.

“Did you settle on two or three discs in the end for 360?”

“Three discs. We recommend installing the game to the hard drive, but you don’t need to install all three discs. If you don’t have the space available on your hard drive, don’t stress. Install the first disc, the first chapter, the first half of the game, then when you’re done, uninstall and install disc two.”

ID Software Creative Director Tim Willits, Speaking With Digital Foundry on Eurogamer About “Rage”, Page 3; September 24, 2011*

Console video games are now packaged with codes that must be used in order to activate certain portions of a game. Assuming we see a new generation of advanced video game consoles, somebody will probably have the balls to stand against GameStop and turn those “online passes” into product keys, the same trinkets that helped to discourage software piracy (in tandem with the online gaming portals that required a product key) and eliminated software resale for personal computer games during the mid-to-late nineties. Many console games now require mandatory installations and the optional installations might as well be mandatory. The installation package for the Xbox version of iD Software’s upcoming first-person shooter Rage will be 22 gigabytes, meaning that players using the 20- and 60-gigabyte hard drives packaged with the original Xbox 360 models will be shit out of luck.* If they have the larger drive, they will be deleting a lot of game files. If they have the smaller drive, they will have to upgrade it. (Apparently, Xbox 360 hardware quality is so awful that developers are programming their games for the second factory run and assuming the first factory run visited the graveyard.)

The launch patches that became a lazy excuse for computer game developers to mold a game that has already gone to a print run have now become a common part of the console video game experience. Meanwhile, cheating has become an everyday occurrence in the majority of online game modes for software on the Xbox 360 and the PlayStation 3. Bobby Kotick has stated that Microsoft shares a “very modest” cut of Xbox Live revenues with the developers who make the service popular.* The situation is probably similar on the PlayStation Network. This means those developers have little reason to provide timely updates that eliminate those methods for cheating, particularly those that have nothing to do with the franchise that accounts for roughly half the traffic on Xbox Live.* In the arms race to make the Xbox 360 and the PlayStation 3 “teh most awesomes home entertaintment experiantc evar”, Microsoft and Sony now own the bloated, cumbersome, inefficient user interfaces that were once a garrison for computer video game fans. (Obviously, Microsoft came prepared. You know, that “We did Windows!” thing.)

In an article published on GameFront, Jim Sterling of Destructoid wrote that “I quit playing Resistance 3 so I could download a firmware update so I could open the PlayStation Store so I could redeem an online pass so I could play Resistance 3.” The article was titled, quite simply, “Consoles Have Just Become Sh*tty PCs”.* Mr. Sterling is one-hundred-percent correct. Console hardware manufacturers scribbled down the lessons learned on personal computers and then used them to beat personal computers. Now those manufacturers are just left with shitty personal computers. And not the kind that can play StarCraft: Brood War, or Civilization IV, or Planescape: Torment, or Deus Ex. The shitty kind of personal computer. What a shame.

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