Predictions for the next 5 years of gaming.

Posted: November 26, 2016 by ryanlecocq in Features

Every so often I like to throw out sort of a “State of the Future Address” about where I think the market will go in the next 5 years.  My track record is pretty solid, so if you’re an investor, YMMV but give a read.  I want to state for the record that I have very little if any loyalty to any particular brand.  I get my hands on all the machines eventually, based mostly on when they get an exclusive title I can’t live without.  I don’t feel that any of the gaming or entertainment companies represent me or my ideals in some tribal way.  They want my money and I spend it after their thing passes my intense scrutiny.  So basically my picks here have nothing to do with being a fanboy in any sense.  Just what I’ve learned to be true by watching what works and doesn’t work in the industry over the past few decades.

 

Who wins VR?

I’m not the first to make this prediction, but I’m saying Sony hands down.  Before you nerd rage about how the HTC Vive is technically superior, accept a history lesson.  The more expensive and harder to obtain thing almost never wins.  While we are entering an age where people order everything online, we are not there yet.  Most of the world will go into a normal store, see the PSVR and the console required to run it and make their decision to buy.  People are tactile and objective-based.  The system that is mostly available online and requires a custom PC that needs to be researched, has a snowball’s chance in hell against a product that you can see and touch at Gamestop.  That is market reality, plain and simple and it will be for at least the remainder of the hardware cycle.

Also, it’s not like the PSVR is a massive step down in quality from the HTC Vive.  When configured correctly, most people agree that the PSVR has solid tracking, held back only by the camera it uses.  It has a slightly lower resolution and narrower field of view than the Vive and Oculus Rift, but these are very slight.  The difference in quality is not nearly as large as say that between the Playstation and Nintendo 64 in the late 90s.  In that case also the affordability of the hardware and the volume of quality software swung the tide massively in Sony’s favor and I think the same will repeat for the 1st gen VR race.  Also it is very likely Sony will release an updated camera and sensor accessory that will greatly narrow the gap between the PSVR and the HTC Vive.

We may see Microsoft play the same role as Nintendo in that earlier console war, by coming in late to the party with a powerful contender that makes a splash, but is too late to catch up.

 

What happens with the Nintendo Switch?

I think the Switch is the continuation of a trend we’re already seeing in gaming; a split between hardcore, high-fidelity gaming and more casual gaming and living room entertainment.  Hardcore gamers have shown a strong preference for gaming-centric boxes like the PS4 that are becoming more and more like simplified gaming PCs.  That market is likely to remain focused around one person per powerful console, with a focus on performance and function.

But we all know there’s this funky, fun, casual gamer market that is just waiting in the woodwork to turn products like Rock Band or the Nintendo Wii into 100 million plus units smash hits.  The trick is just how to aim for this unpredictable target?  Apple, Amazon, nVidia and others have all tried and basically failed with attempts that bridge the already huge phone and tablet market with the living room.  Nintendo has a leg up with having their own stranglehold on the still separate handheld gaming market.  If they can somehow make a system that captures the Mario crowd, the Pokemon crowd AND the Pokemon GO! crowd, I think this market segment will finally become permanent.  Once Apple and Amazon have someone to copy, they should have no trouble putting out competing products to make this the next exciting frontier for casual and social games.

 

What about the PC gaming market?

I think it’s very likely the PC gaming market will never again grow to the highs of the late 90s and early 00s.  What we’ve seen in the last few years will likely become the normal trend.  The market will go up and down with cycles of hardware, with surges every few years as more people upgrade around jumps in CPUs and GPUs.  It seems to have reached a sustainable level once again, thanks in part to the hardware makers branching out into other fields like gaming consoles and tablets to supplement themselves.  We’ve finally reached a point where Intel, AMD and nVidia can sustain themselves by competing at different levels in different markets.

The biggest shift I’ve been waiting for will center around the Nintendo Switch in the above section.  If the Switch is a hit, nVidia will finally be able to move hardware in a market besides high end PCs.  AMD has already made this jump by manufacturing the majority of the guts of Microsoft and Sony’s game consoles.  If this happens, the two chipset manufacturers could find an excellent balance that caters to the strengths of their current products.  AMD has very competitive midrange hardware that is perfect for game consoles, while nVidia has the best high power and low power chips.  This would keep the balance in the PC gpu race, because nVidia would not be forced into a hardware war trying to move units out of desperation, when other markets failed for them.

 

Will handheld gaming continue?

This is probably the area I feel the least confident in predicting.  It really feels to me like the Switch is Nintendo deciding that the future of handheld is becoming one with mobile and living room streaming boxes.  That makes sense to me and I think it puts a lot of the puzzle pieces into place for the entertainment market of the next decade.  So if that’s the case, handheld is dead, long live handheld.  The release of Nintendo games on phones and the Switch appearing to bridge the gap between DS, Wii and tablet could be the harbinger of the future mobile/casual/handheld market.

That being said, I have to play devil’s advocate.  Nintendo is a handheld juggernaut and Sony does not seem inclined to quit.  It is totally conceivable that Nintendo could release the Switch and a new DS, two products that would appear to just confuse the market and have both succeed.  It is also possible that Sony would release another PSP, whether it sells or not, just because they are obviously dedicated to JRPG fans.  I think that would just be straight market stupidity and a pointless continuation of old trends that are ultimately doomed, but I wouldn’t be too surprised.

A sensible Sony would just make their mobile app capable of playing PSN games and classics and Nintendo would split from the traditional gaming market to pioneer the future of family living room fun.  That’s what makes the most sense, but the world doesn’t always make sense.

 

So who wins this console generation ultimately?

I think once again it’s going to be Sony.  Sony has a good track record over the last 3 generations of success with their conservative strategy.  They are seldom first with technologies, but they time their releases and pick their prices very well.  The PSVR is showing early signs of being the first truly successful VR product.  The PS4 already had a lead in units sold over the XB1, so the success of the VR market could be an added boost.  Even if markets like VR and 4k are slow to build, Sony won’t likely lose much by releasing the PS4 Pro and PSVR.  Being seen as innovative while still having the leading product at a competitive price point is hedging their bet fairly well.

There has been a lot of talk about Sony and Microsoft just muddying the waters with this tiered hardware approach, but I think Sony and Microsoft are just feeling out how much of the PC gaming market they can slice off with a middle ground product.

I have to admit that I was personally swayed from investing in a PC upgrade and HTC Vive when the PSVR released.  It wasn’t just the cheaper price point, it was that Sony’s product targeted my desires better than competitors.  They had the definitive version of a game I must have (Final Fantasy XV), timed to match up with my desire to upgrade to 4k and VR.  I was already on the fence about upgrading my console or PC and how I wanted to experience VR.  Sony’s answer was for less than $1000 I could play FFXV and RE7 in 4K or VR right now.  That sounded way better to me than spend twice as much or wait a year.  I imagine quite a few people will feel the same.  Every generation, there is one holiday shopping season, usually the 3rd or 4th year, that defines the console cycle.  This is the year where you pretty much have to upgrade to play any new games and it’s also probably the year everyone went 4k on Black Friday.  I believe this is the one and Sony is the only company with the right products available now.

 

That’s all folks.  If nothing else, it will be fun to look back in 5 years and see how right or wrong I was.

 

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