The launches of the Xbox One and PlayStation 4 revitalized the console market this year and are forecast to ride awave of momentum until some point in 2017, when interest in physical disc-based games is expected to wane, just like interest in other content that was once laser-etched on optical discs.
With the Xbox 360 and PlayStation 3 no longer able to bear the weight of games pumped through them, the demand for content is spilled over into a new generation of console hardware. This "next gen" console promised full HD and super-slick 60 frames per second, visual upgrades that kept millions of gamers satisfied through the HD remakes, HD remasters and definitive versions.
DigiWorld Summit forecasts consoles to move from making up approximately 31 percent of the video game market in 2013 to a possible peak of 40 percent in 2017, as the new-gen hardware units trudge to their demise. That 40 percent, by the way, is well below the 78 percent market share last-generation consoles held back in 2008.
Technology's growth is as resilient as ragweed and heirloom roses -- and gaming consoles are being choked out in a garden blanketed with clouds. Here's why:
Cross-Pollination
To ease its back catalog of games on the PS4, Sony is working on PS Now. The streaming video game service enables PS4 consoles to play older and obscure PlayStation games, but smart Tvs are also benefiting from the pollen.
Without a PlayStation, Sony smart Tvs can stream the company's games via the PS Now app. As consoles fade, the signs point to today's heavyweights offering games through apps and serving them from a cloud.
Cloud-Covered Skies
The growing pains of OnLive, a cloud-based gaming platform, kept the service and others like it from making a dent in console market. OnLive's 5 Mbps requirement for lagless gameplay kept the service ahead of its time in rural areas, where 1-Mbps and 2-Mbps DSL service and satellite Internet speeds made physical discs a more reliable option for acquiring new games.
Copper cable that provides Internet service is being dug up around the world and replaced with fiber optics, a transition that will soon provide all of the major gaming markets with the speeds needed to game from the cloud. Above the grounds and outside the walls, wireless carriers are blanketing vast swaths of lands with the long-term evolution (LTE), or 4G LTE, standard of mobile communications.
Steam Clouds and the Like
Even local clouds are starting to hinder the growth of the console market. With PCs a necessity nowadays, the multitasking machines have moved beyond processing games and displaying them on a monitor in a room in a basement.
Steam, a popular digital distribution platform for video games, already allows computers to stream games and music to remote machines -- and so does Shields, as long as the Wi-Fi connection is solid. Steam's In-Home Streaming service allows a gaming PC to process video games and stream the content to computers anywhere in the house on the same network that have no business running the games on their own.
A low-end desktop or laptop, with dual-core this and integrated that, can relay the streaming content to big-screen TVs and they can also accept input from a video game controller. Steam is also polishing up its own operating system, so that consumers can build their own gaming consoles, "Steam Boxes," and upgrade them as they please.
Palmtop Pests
In general, core gamers -- Sony Ponies, X-bots and PC neckbeards -- detest the creepy, crawly, money-grubbing mobile pests.
Mobile gaming, browser gaming and the free-to-play model are here to stay. But these mediums are morphing to butterflies, after munching on the leaves of the beloved console rose.
When cloud gaming becomes the norm, its apps will be planted onto browsers and mobile devices. If not already installed on a smart TV, users will stream their big-budget AAA games to their big screens via their PlayStation or Nintendo apps.
A Drop of Golden Sun
Telecommunications companies will need to get over the idea of capping data each month for video games to go the way of movies (Netflix), music (Spotify) and books (Kindle). If ISPs somehow manage to keep capping and throttling data, consoles could see one more generation before inevitably having to focus primarily on emerging markets to stay out of museums.
