Nintendo opted to be the canary in the coal mine on next gen gaming consoles. The result could be an indication of trouble ahead for the industry’s current business model, and other console makers had better be prepared.
Nintendo tempered its forecast of hardware sales after selling roughly 3 million units of the Wii U since it’s launch in November. Keep in mind, these sales represent units sold to retailers thus far and don’t necessarily represent the number of Wii Us plugged in and online in people’s homes. Given the fact I’ve practically tripped over boxes of unsold Wii Us on store floors before, I doubt the Wii U gaming community is 3 million strong just yet.
Some want to dismiss this as Nintendo’s failing to deliver a compelling product. It’s not. Wii U has sold a respectable amount of units since its launch. The console is selling well but not as well as Nintendo hoped. I don’t see the story with Microsoft and Sony being much different once they release their next systems. The fact is there are a lot of reasons for consumers to wait on buying a gaming console.
I’m not going to dive into the hackneyed argument of tablets eating consoles’ lunches here, but I am going to bring up the Steam Box and other gaming PCs that are trying to make it easier for people to enjoy games on the living room television. They also represent, in theory, more open platforms and a way out of the 5-7 year console cycle.
If Valve announces its official Steam Box this year and releases it in early 2014, I can see that cutting into sales of the next Xbox and PlayStation. If console makers are going into this next generation with the expectations of previous generations, they are going to be disappointed. And given the fact there is no shortage of quality games to play on current generation consoles (and the fact they all stream Netflix just fine), I’d say the majority of gamers, who don’t cave to impulse buys, will be happy to hold off on a purchase decision until everyone has their cards on the table.
Console makers are going to have to make peace with the new reality, in a few short months, they may not be the only significant platforms offering accessible gaming to the masses. We seem to be exiting an era of consumers picking their favorite console based on the reassurance more of their favorite exclusives will be on the way. I’m sure that old model will carry Nintendo, Sony and Microsoft halfway through this next generation, but beyond that, we may be looking at a model where gamers are really empowered to play whatever they want on the platform they choose.
GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!