When, after a great deal of hype, Sony executives recently stepped onstage to introduce the next generation of their flagship consumer product, the Playstation 4, one thing was conspicuously absent: the Playstation 4.
There was a redesigned controller with a touchpad; there were video demonstrations of insanely violent games; there was plenty of talk about a built-in share function that will allow players to broadcast their gameplay live on Facebook. But the console itself—the box that Sony hopes will one day sit beside your TV—was nowhere to be seen.
For their part, Sony assumed focusing on the games was enough. But the disappearing Playstation was also an inadvertent symbol. Though Sony, Nintendo and Microsoft still lead the multi-billion-dollar industry, console gaming faces pressure from all sides. The multifunction device now reigns, and the idea of a box dedicated primarily to playing games is starting to seem almost as anachronistic as an Atari 2600. But this change won’t affect each company the same way: Sony and Nintendo seem likely to be the losers in this shift, while Microsoft—which came late to the games business and took its time climbing to the top—looks far better placed.
New entrants in the traditional game business show no signs of life. Sony’s handheld PS Vita has sold poorly as consumers stick to simple, cheap thrills on the smartphones and tablets they already own. Meanwhile, Nintendo has something of a flop on its hands with its latest home offering, the Wii U, which is technically innovative but has struggled to sell even five million units since launch. Devices primarily focused on games just don’t seem to be resonating with consumers the way they used to.
The PS4’s curious non-unveiling exposed further signs of the console’s looming obsolescence. A prime example was Sony’s emphasis on its acquisition of Gaikai, a company that streams games across the Internet to any connected device, whether TV, smartphone or tablet. Though it is arguably a forward-looking strategy, it also raises a stark question: If the aim is cloud-enabled, connected gaming everywhere, regardless of device, then why buy a box at all?
There seems to be only one path left to console makers. If they want people to buy their hardware, that box has to be a gateway to all their entertainment needs: games, certainly, but media and apps, too. Sony has made some good strides forward in that regard: its Playstation 3 is not only the most commonly used platform for Netflix, it is also now exclusive home to J. K. Rowling’s “Pottermore,” a virtual Harry Potter universe. But it’s Microsoft that shows the keenest understanding of how the market has changed.
First, Microsoft recently opened a studio in Los Angeles dedicated to making entertainment exclusively available on their Xbox Live network, giving consumers one more reason to pony up for the service’s monthly fee. Second, Microsoft’s next iteration of its motion-sensing Kinect camera promises to make interaction simple for even those who aren’t traditional “gamers”—a populist approach that propelled Nintendo’s original Wii to living rooms that would never before have been open to them. Finally, credible rumours suggest the next-generation Xbox—reportedly to be announced in May—will also be able to take over duty from your traditional cable box, a move which would not only massively expand Microsoft’s reach, but leapfrog ahead of Apple and Google, as well.
It is a holistic approach that Nintendo, with no non-game entertainment ecosystem of its own, cannot hope to match. Sony’s prospects are somewhat brighter; it owns a deep back-catalogue of movies and television through its Sony Pictures division. But Microsoft’s approach seems aimed at leapfrogging not only its gaming rivals but other tech companies as well: its message will be “here’s the only box you need.” It’s a compelling business argument, even if it is one that leaves traditional gaming behind. It may be this new multimedia, multi-functional focus that is the only way to survive the games war.
Navneet Alang is a Toronto-based blogger and technology critic.