Console Life-Cycles

[Rockster]

In the latest episode of the Bonus Round over on Gametrailers, they are discussing this years E3 for the big three. Their analyst provide perspective on where each of these consoles are at this point in their life-cycle and how they should/will be positioned for the remainder of this year into 08' and 09'. Reflecting back on some previous posts I made with regards to price drops, etc. it seems Microsoft may be attempting to shorten console lifespans compared to previous generations, and thought it would be interesting to get some additional opinions.

If mainstream price points are truly $149-$199 (perhaps lower?) how long before the current generation of consoles get there? MS might get their core sku to that by '08 but I don't think you'll have a premium sku there until mid '09. When will the PS3 get there? How long after that until a new system is introduced.

I get the impression Sony wants the PS3 to have at least the lifespan of the PS2 (6+ years). I'm also thinking MS will try to deliver a new console in or before 2010. But in a more GC-> Wii sense than a PS2 -> PS3 sense. Not revolutionary, just evolutionary, with 100% hardware backwards compatibility. Perhaps a 1GB+ of memory, 1-3 additional cores (or maybe something asymetric Cell-ish), winner of the HD optical shakeout?, GPU boost w/ more processing units and eDram, and a innovative control element; but mostly making it cost effective. I also think the Wii will need an upgrade or refresh sooner than later to give it legs as HD becomes mainstream and expectations on interactive content are raised. The PS3 has the legs but may only hit its stride to find an entirely new line-up of consoles to deal with. It should be interesting to see.

 

[tongue_of_colicab]

I dont think MS wants to shorten the lifespan of consoles. I dont think that will work from a business, consumer and developer pov. They did that with the xbox and it cost MS money and the people who bought it wernt happy about it and devs probably wanted to cash in some more. I dont think alot of people will be willing to invest in a console maker they know is going to release something new every 3 years.

I do think sony wants to keep their console out long, but that will only depend on how much the ps3 will sell. If it becomes like xbox or GC it will lack new games so unlike ps2 it wont be possible to have it still selling good even after 7 years.

2010 could be possible for a next xbox, but I think more towards 2011 but I also think it will depend on what sony and nintendo will do. You dont want to release a new console to early, especially if you can still earn on the old one and have a advantage above your competition.

As far as hardware goes, I'm not sure about this yet. What im wondering is how much gfx will improve over what we have now if they try to stuff in the fastest hardware again. I dont think it will improve that much so I wouldnt be suprised to see what by that time might be more midrange hardware but with the benefit that they can appeal to mass market faster because they can put a console on the market for 300euro's or less.

 

[Rangers]

I dont know why people continue to assume that Microsoft always anbandons it's consoles and Sony always support their's for a very long time, because it happened ONE TIME.

There are a lot of factors driving that type of thing. For MS it was that Xbox 1 was built on a money pit hardware model. At some point they realized the quicker they could kill it the better. However, that was a unique situation, and is no longer the case with 360.

Also, Moore's law is slowing down, it's getting more and more expensive to build high end hardware. Therefore I think there's going to be a natural tendency for life cycles to expand. I dont think anybody, including MS, is in any hurry for this particular gen to end. I know Peter Moore mentioned something in the 2011-12 time frame for a 360 succesor. If true, that would be 6-7 years. Remember, if MS is making money and at least a comfortable 2nd (and winner of the high end) they're going to want to drag the generation on as long as possible. Whoever is the leader is who doesn't want the gen to end, as they have cost reduced hardware and are selling profitable software in droves. just as Sony was loathe to cut short the dominant PS2 last time around, and in fact only started making next gen plans basically because they had to because of 360. Well, if MS is the leader in 2010, guess who isn't going to want the generation to end?

If anything I think it's entirely reasonable to put forth a scenario where it's actually Sony rushing PS4. There is a plausible scenario where PS3 just falls farther and farther behind (remember, it has been losing ground to 360 in America since it launched, never mind actually gaining back 360's year headstart) , and begins losing third party support, and simply cannot recover. At that point, what would Sony do? I think PS4 in 2010, well before MS next box would be eminently possible.

 

[inefficient]

I dont know why people continue to assume that Microsoft always anbandons it's consoles and Sony always support their's for a very long time, because it happened ONE TIME.

Because, well there is product called Windows. And if for some reason you haven't heard of that they have this other product called Office.

"Bill Gates is a very rich man today... and do you want to know why? The answer is one word: versions." -Dave Barry

 

[Todd33]

I dont know why people continue to assume that Microsoft always anbandons it's consoles and Sony always support their's for a very long time, because it happened ONE TIME.

Sony also had the PS1, so TWICE it supported their older platform. MS should take some extra time on the Xbox 3 to make it reliable and restore consumer confidence in MS hardware.

 

[BoardBonobo]

I dont know why people continue to assume that Microsoft always anbandons it's consoles and Sony always support their's for a very long time, because it happened ONE TIME.

Because that's the way MS operates? Original Xbox support died almost instantly.

 

[Neb]

Because that's the way MS operates? Original Xbox support died almost instantly.

Maybe the xbox was an exception, maybe they will not abandon the xbox360 early this time. I dont know but when it comes to their software they always continue to support it for a couple of years after the release of the latest version.

 

[Rockster]

I'm not suggesting they would abandon XBox as a platform or the 360 as a product. Quite the contrary and both would essentially continue. I am suggesting that a new XBox product (720 for sake of discussion) could be introduced to stimulate consumer and developer interest at a time where PS3 games could appear superior and the broader demographic remains untapped. The PC market continually evolves hardware so consumers can choose the types of experiences they want. In my vision, this new XBox 720 could work similarly. Where the same game, even the same physical copy, would work on both systems. Perhaps it's an HD-DVD combo disc where the DVD version would play on all the existing systems, and the HD-DVD layer contains 720 specific enhancements. All current and future 360 games would work on the system, in addition to 720 exclusive games which might make specific use of new input technologies or features. However the development environment, basic features, and general landscape stays the same allowing for a more seamless transition from this generation to the next. If the new system is priced affordably with some compelling features to broaden its demographic, while leveraging all the existing platforms (ie. Live, XNA, Marketplace, etc.) and game portfolio, I feel it would put additional pressure on the competition before they are ready. Nintendo has paved the way in this regard.

 

[crosseye]

Because that's the way MS operates? Original Xbox support died almost instantly.

This train of thought that continues is really just asinine. Profitability/continued profitability and consumer demand dictate the lifecycle of a console. I can't believe people really think EITHER Sony or Nintendo would continue supporting a console they where still losing money on with NO end in sight.

If MS had the PS2 and Sony had the Xbox, Sony would've been the one bringing a new platform to market as soon as feasible. This idea that they simply support the console because they love you more than profit is just ridiculous.

MS was STILL losing money on the Xbox AND they were certain they needed to, at the very least, bring their next console day and date with the competition. They also knew you couldn't have a console without games, so they had to make the decision to move first party plans to the next system.

One can not in their right mind believe if the PS3 is a money loser throughout the next 4 years, with a guaranteed continued loss for the foreseeable future, combined with a distant last or even distant 2nd (like the Xbox/GCN had), that Sony would continue to support that product like they have the PS2.

God help us all, or at least your stockholders, if any people that thought like that ran ANY type of business.

 

[crosseye]

I'm not suggesting they would abandon XBox as a platform or the 360 as a product. Quite the contrary and both would essentially continue. I am suggesting that a new XBox product (720 for sake of discussion) could be introduced to stimulate consumer and developer interest at a time where PS3 games could appear superior and the broader demographic remains untapped. The PC market continually evolves hardware so consumers can choose the types of experiences they want. In my vision, this new XBox 720 could work similarly. Where the same game, even the same physical copy, would work on both systems. Perhaps it's an HD-DVD combo disc where the DVD version would play on all the existing systems, and the HD-DVD layer contains 720 specific enhancements. All current and future 360 games would work on the system, in addition to 720 exclusive games which might make specific use of new input technologies or features. However the development environment, basic features, and general landscape stays the same allowing for a more seamless transition from this generation to the next. If the new system is priced affordably with some compelling features to broaden its demographic, while leveraging all the existing platforms (ie. Live, XNA, Marketplace, etc.) and game portfolio, I feel it would put additional pressure on the competition before they are ready. Nintendo has paved the way in this regard.

Thus destroying the whole idea of a closed environment with all systems being equal on power. I understand what you're trying to say, but I think you're underestimating the headache this would bring about as far as development goes. Also, if say, MS did this and Sony/Nintendo kept to the usual, MS would suffer when devs using the other platforms are able to focus on them instead of worrying about 360 owners.

For example, imagine if a dev right now had to worry about programming a fun/manageable game that worked on both the Xbox AND the 360. Even if we ignored the idea of different architecture and said they had the same, but 360 was still that jump up, this would be a very bad move imho.

EDIT: To clarify a little more, you would basically be adding in the cost to dev for two platforms instead of just one. The advantage to the MS consoles has been their ease of development/lower cost. This would completely nullify that position and swing the cost at least, to either of the other platforms.

 

[zed]

i believe ms will abandon the xb360 in 2009/10 if its still not profitable (same with ps3).

Maybe the xbox was an exception, maybe they will not abandon the xbox360 early this time.

maybe, but maybes are worthless, what we can judge is the track record.
xbox 4 years
ps1 (10years), ps2 (7 years and going strong)
i know where ild stick my money on

 

[Rockster]

Thus destroying the whole idea of a closed environment with all systems being equal on power. I understand what you're trying to say, but I think you're underestimating the headache this would bring about as far as development goes. Also, if say, MS did this and Sony/Nintendo kept to the usual, MS would suffer when devs using the other platforms are able to focus on them instead of worrying about 360 owners.

For example, imagine if a dev right now had to worry about programming a fun/manageable game that worked on both the Xbox AND the 360. Even if we ignored the idea of different architecture and said they had the same.

But dev's already worry about that. Right now most AAA titles are PS3/360/PC. PC's will already be much more powerful by next year, let alone 2010. Consoles sales of those titles seem to wane a bit once they lag behind PC's technology wise for longer than an average PC upgrade cycle. Most games already lend themselves to scaling across multiple platforms but still maintain the core gameplay experience. What I am talking about is spending $60 on a game that will take advantage of the newer hardware once you upgrade, which I think could be quite compelling. Imaging if every DVD sold today had the HD version included on the disc. Wouldn't that content be a better value?

 

[dobwal]

i believe ms will abandon the xb360 in 2009/10 if its still not profitable (same with ps3).
maybe, but maybes are worthless, what we can judge is the track record.
xbox 4 years
ps1 (10years), ps2 (7 years and going strong)
i know where ild stick my money on

Speculating future console lifespans off of one console's lifespan is more worthless. One event is not a track record.

A console's lifespan is based on one thing, profitability. There is no history or evidence in the gaming market that shows reducing your consoles' lifespans can increase profitability over time. Shortened lifespan has always been a symptom of profit loss or a decrease in profitability.

So, predicting MS to adopt a short lifespan strategy based strictly on the short lifespan of an unprofitable (with no profitability insight) xbox1 is illogical.

The Dreamcast was discontinued in 2001, yet the Genesis is still being manufactured in Brazil to this day.

 

[dobwal]

But dev's already worry about that. Right now most AAA titles are PS3/360/PC. PC's will already be much more powerful by next year, let alone 2010. Consoles sales of those titles seem to wane a bit once they lag behind PC's technology wise for longer than an average PC upgrade cycle. Most games already lend themselves to scaling across multiple platforms but still maintain the core gameplay experience. What I am talking about is spending $60 on a game that will take advantage of the newer hardware once you upgrade, which I think could be quite compelling. Imaging if every DVD sold today had the HD version included on the disc. Wouldn't that content be a better value?

Waning console sales are not a result of increasing PC graphic power. The PS2 saw increasing sales for the first three years of its existence and yet it graphically inferior to the PC from its outset.

This is the first console generation in a long time that has been able to compete visually after release. Most of the past hype came from comparing current (at the time) PC visual quality against future capabilities of console a year or more from release.

 

[specwarGP2]

Maybe the xbox was an exception, maybe they will not abandon the xbox360 early this time. I dont know but when it comes to their software they always continue to support it for a couple of years after the release of the latest version.

A couple years ago I bought a MS branded 802.11 router and network adapter. MS has basically abandoned these products since you can't find drivers on the website and no drivers are provided through windows update. Vista doesn't even recognize the adapter. Luckily I never lost the installation CD that it came with.

 

[assen]

ps2 (7 years and going strong)

Going strong? Can you please remind me what will be released on the PS2 this coming holiday season? I can think of Guitar Hero III, and maybe a bunch of severely mutilated ports of sports titles.

 

[oramay]

I'm going to stick my neck out and make some bold predictions. Check back a few years later to see if they are correct.

1) The format war between HD-DVD and Blue-ray ends next year with HD-DVD fading out. By gambling their whole console business on Blue-ray, PS3 provides a ready market for Blue-ray content which has a positive feedback loop with the amount of content available for it.
2) Blue-ray, once dominant, becomes an important feature that adds value to PS3.
3) Wii sales will stall within 2-3 years and Nintendo will release a new console with comparable processing power with Xbox 360 and PS3 in 2010.
4) In the next few years, Wii owners will be looking to buy a graphically more impressive console, at a time when PS3's technical advantage over Xbox 360 is beginning to show as developers get to grips with the Cell.
5) Installed base of PS3 overtake Xbox 360 by 2010.
6) Neither MS nor Sony have a strong urge to release a new console even though Nintendo is selling one. They'll both make money and sit on their current hardware until 2013-14.
7) Nintendo completely distinguish their consoles as "something else" in this business and no longer release new consoles in any degree of synchrony with MS or Sony. In other words, there will be clearly different cycles for different segments of the market.
8) Phantom will launch in 2016 to great success.

 

[Rockster]

Some interesting thoughts oramay. It's good to see someone taking a stab at this.

 

[Sis]

Given that manufacturers typically make most of their money during the mid to late years of a console's life, it seems odd to suggest that Microsoft would desire to leave that money on the table. They did that with Xbox because:

a) There was no money to be left on the table, just more losses.
b) It gave them a strategic advantage of shipping a year earlier.

If the 360 is in the same boat as the Xbox in a few years, then my guess is that Microsoft would fold the Xbox altogether.

 

[tongue_of_colicab]

I'm going to stick my neck out and make some bold predictions. Check back a few years later to see if they are correct.

1) The format war between HD-DVD and Blue-ray ends next year with HD-DVD fading out. By gambling their whole console business on Blue-ray, PS3 provides a ready market for Blue-ray content which has a positive feedback loop with the amount of content available for it.
2) Blue-ray, once dominant, becomes an important feature that adds value to PS3.
3) Wii sales will stall within 2-3 years and Nintendo will release a new console with comparable processing power with Xbox 360 and PS3 in 2010.
4) In the next few years, Wii owners will be looking to buy a graphically more impressive console, at a time when PS3's technical advantage over Xbox 360 is beginning to show as developers get to grips with the Cell.
5) Installed base of PS3 overtake Xbox 360 by 2010.
6) Neither MS nor Sony have a strong urge to release a new console even though Nintendo is selling one. They'll both make money and sit on their current hardware until 2013-14.
7) Nintendo completely distinguish their consoles as "something else" in this business and no longer release new consoles in any degree of synchrony with MS or Sony. In other words, there will be clearly different cycles for different segments of the market.
8) Phantom will launch in 2016 to great success.

1. Agree
2. Dont agree. By the time BR is standard and the majority of people have it stand alone players will be dirt cheap just like dvd players so nobody interresting in watching movies will buy a more expensive ps3 for BR.
3. By stall do you mean stay as they are now? because if thats the case I think nintendo will sign on that right away
4. Hmm. Maybe a part. I think there are alot of people who buy a Wii because they want good gfx, wii gfx been crap from the start so people who buy a wii probably dont care alot for gfx. Btw, having RE4, which is a gc game, and games like MP3 I dont think people will be that botherd by the gfx unless you're a real die hard who cant live without the best gfx and than you'll be playing on a pc anyway
5. Could be. If sony drops the price fast.
6. MS will I think. Sony? I dont know how their cost reduction is going but it is a expensive console to build and it not selling really fast doesnt really help reducing cost either. They'll make money on it eventually, but I think the important question is how long will that take?
7. No. Even if nintendo market their console as something else, in the end its still a machine to play games on and MS and Sony build that too. They could copy the Wii for example. I think console releases need to be somewhat around to same time to be succesfull. Lets say you launch 2 or 3 years later. Your hardware will be marginally better, more expensive and no games vs the other systems. Consumers wont go there I think.
8. They first need to get a office and not just a postbox though