The Next-gen Situation discussion *spawn

[Shifty Geezer]

Yep. Not on any list. Admittedly, their rollout schedule only goes up to December 2013 AFAICT, but we have never been put on any cabling list for the past 10 years. The adjacent village, 2 miles away, had cable as far back as then. We did at least get 8 Gbps copper broadband ahead of some.

 

[wco81]

I was never suggesting that physical media would be gone. Merely that digital is a big weapon for publishers if they want to get rid of the used market.

Digital won't take off if they price it the same as media that people can trade or sell after they're done.

But if they price digital to account for no manufacturing and distribution costs and the loss of the ability to resell, then that will alienate retailers, which they still need to distribute hardware, since hardware carries no margins.

I don't think even Amazon would carry consoles with minimal profit margins if they didn't have the opportunity to make up those margins on software.

So the decision to go all-in with digital would have implications for the whole business-model of the industry which has been subsidized hardware with no margins for retailers combined with software which has big margins.

Of course, software pricing is under pressure now.

 

[Rangers]

I don't think even Amazon would carry consoles with minimal profit margins if they didn't have the opportunity to make up those margins on software.

Huh? Stores carry tons of things with little margin...

If the consoles went 100% DD only for games tomorrow, I'm 100% sure Wal Mart and Target would still carry all systems and hardware accessories (which latter category alone is probably fairly lucrative).

 

[steviep]

Digital won't take off if they price it the same as media that people can trade or sell after they're done.

But if they price digital to account for no manufacturing and distribution costs and the loss of the ability to resell, then that will alienate retailers, which they still need to distribute hardware, since hardware carries no margins.

I don't think even Amazon would carry consoles with minimal profit margins if they didn't have the opportunity to make up those margins on software.

So the decision to go all-in with digital would have implications for the whole business-model of the industry which has been subsidized hardware with no margins for retailers combined with software which has big margins.

Of course, software pricing is under pressure now.

Shifty Geezer is right here, in that the infrastructure will prevent digital-only for at least 1 more generation, if not 2.

However, people will not be readily able to sell/trade their media next generation if what I've read is correct. I pay $40/month for internet and I get <10mb download speed and a 15gb (yes, gb) cap. Thanks Canadian ISPs.

Huh? Stores carry tons of things with little margin...

If the consoles went 100% DD only for games tomorrow, I'm 100% sure Wal Mart and Target would still carry all systems and hardware accessories (which latter category alone is probably fairly lucrative).

Nintendo has already announced that they'll be selling 100% of their software both digitally and on discs for the Wii U. They will be allowing retailers to sell the discs and/or download cards/codes (of which the retailer can set the price of) as well as selling the content digitally on their own e-store. Like the other 2 console hardware manufacturers, all 3 forms of content will be locked to your account and non-resell-able (as with the other 2 console manufacturers next gen and PCs now) And they're *behind* the times.

 

[joker454]

Digital won't take off if they price it the same as media that people can trade or sell after they're done.

What if they offered the digital version for download and play one day before the retail version, even at the same price? I suspect many would bite at that even at full price, especially the "I never sell my games" type people.

 

[Prophecy2k]

I think far too many underestimate the amount of time it would take to get superfast broadband to proliferate to the masses. It isn't just about the infrastructure and making access to such superfast networks available, but also the fact that network owners would continue, as Shifty succinctly put it, to chase £'s by offering those packages as premium offerings to the heaviest users.

The mass consumer market goes for the cheapest broadband connection, and not the fastest. At least here in the UK anyway. So even if the majority had access to the fastest networks to enable connection speeds sufficient for full on digital content delivery, that still doesn't mean that the adoption of those superfast networks by the majority consumer is a given.

I would assume at least another 20 - 30 years before fibre & superfast networks proliferate to the point where any of the console platform holders would consider a fully all-digital platform.

I think we'll have a combination of physical/digital for a long time to come, alongside a very aggresive push to kill off the used games market entirely.

 

[Rangers]

Shifty Geezer is right here, in that the infrastructure will prevent digital-only for at least 1 more generation, if not 2.

Digital only is already mostly reality on PC, and on console it's probably happening right under our noses. Most 360 exclusives these days seem to be XBLA (EG, Trial Evolution is the most talked about Xbox exclusive in a while right now).

I'm one who actually believes high end gaming is the one place disc media will probably remain relevant for the near future though.

 

[fearsomepirate]

You might want to check some 2012 data.

Which confirms what I said...revenue is about 45% down from its 2001 peak. The music industry may never reclaim its glory days.

Back catalog accounts for a lot of drop in DVD sales, you can only re-release something so many times before people stop caring. Netflix is far from the only digital content provider.

So in other words...revenue is indeed down. Another huge content delivery disruption was television. Hollywood never really recovered from that.

It's not a major shift, the market has been moving towards it for a long time.

No, it hasn't. Used games are still a huge share of the market. Industry sentiment has been moving that way, but the actual market hasn't.

Video game revenue (whether you include used games or not) hasn't even been approximately constant over the last few years, so you're actually claiming that a huge change in the way it affects people's wallets will actually stabilize the industry, which, again, is going to require some evidence.

 

[Prophecy2k]

No they aren't mutually exclusive. They just might not have a 100% relationship, just like the money the consumer gets from selling used games might not increase his spending on used games by 100% of the amount, he could buy DVD's or whatever other products that vendor offers, netting the games publishers 0.

Market forces can put the pricing of the product where it needs to be without the presence of a used market. And there's certainly little reason to think that the absence of a used market would cost publishers anything as they get nothing from it. The fact that total spending on games goes down isn't relevant to the publishers because the money spent on used games isn't a positive for them. You can claim publishers would get less without a used market, but that would require some sort of voodoo economics. Those people can wait 6 months or whatever and buy the game when it's discounted rather than buying it used 2 weeks after launch. The vocal forum minority not withstanding.

I'm just gonna have to go ahead and bold this for truth. I've been saying the same thing for a long time, and I fully agree with AlphaWolf that I do not believe that the used-games market offers publishers any added value or benefit in the slightest bit.

Ultimately gamers are consumers who are stirred up and driven by hype, marketing and product media. Without a used-games market to absorb new-game revenues, even if every gamer who currently resells games to a retailer stops buying games entirely, those who normally buy cheap used-games from retailers (i.e. price-sensitive gamers who nominally buy most of their games post-launch anyway - a very valid assumtion given the negilible difference in price between a new and used game close to the title's launch), would instead be buying those games first-hand therefore netting additional revenue for the publisher.

My guess also would be that the additional revenue netted by such a transition would vastly outweigh the revenue lost by those gamers who decide in their protest to never buy games they cannot resell (now think about that for a moment, who exactly would do that? That's right, very very few). The likelihood is that those who normally bought new games discounted by used games sales would rather spend their same gaming budget buying games further post-launch than never buying games at all. Only the vocal minority online community would attempt the latter, and even then its unlikely they maintain such a hyppocritical stance when the only alternative would be PC gaming, which provides a resale value of effectively $0 on all games.

 

[Prophecy2k]

Which confirms what I said...revenue is about 45% down from its 2001 peak. The music industry may never reclaim its glory days.

But you cannot sincerely try to assert that the change to digital music is the reason for this alone? In fact the change to predominantly digital music was a direct industry response to the piracy problem that obliterated music studio profits. The internet did that. The sheer size of video games over music files means that both piracy and fully digital content delivery is much harder. Thus, the greatest hinderance to industry revenue growth in the games industry over the music industry is completely different, thus it's not really an apples to apples comparison.

So in other words...revenue is indeed down. Another huge content delivery disruption was television. Hollywood never really recovered from that.

...

No, it hasn't. Used games are still a huge share of the market. Industry sentiment has been moving that way, but the actual market hasn't.

Other market factors affecting a decrease in total movie revenue is, like music, not applicable to gaming. Neither used music, nor used movie markets were ever really large enough to affect their industry revenues significantly. On the flip side however, by your own admission, used-gaming revenues are indeed a significant chunk of the pie.

Video game revenue (whether you include used games or not) hasn't even been approximately constant over the last few years, so you're actually claiming that a huge change in the way it affects people's wallets will actually stabilize the industry, which, again, is going to require some evidence.

But a removal of the used games market will not really meaningfully affect the majority of people's wallets. It will only affect the wallets of retailers and publishers. Gamers will effectively still spend the same amount of money on the games they want to play, because the removal of the ability to resell those games will not remove any siginifcant value from those games in the eyes of the consumer. In fact given the crap that consumers already deal with with DLC and online passes to combat the used games market, a removal of said market and thus such practices could even improve the value proposition of games in the eyes of the consumer.

I certianly don't believe that if the used games market does go away that any significant change in total publisher revenues will be affected by that removal alone.

 

[Shifty Geezer]

Digital won't take off if they price it the same as media that people can trade or sell after they're done.

If the reason to resell is to pay for other titles, than selling the games at $20 at download solves that. But there's a whole thread on this subject.

 

[tuna]

So in other words...revenue is indeed down. Another huge content delivery disruption was television. Hollywood never really recovered from that.

A lot of television content is produced in Hollywood.

 

[dobwal]

Huh? Stores carry tons of things with little margin...

Yeah, when they are either loss leaders or sell quickly. Consoles can be look at as loss leaders (without actually losses) because retailers use them to drive game sales. You think retailers would accept consoles margins because of accessories. Accessories sales are no where near game sales on an annual basis. Do you think GameStop can survive with wall to wall accessories?

As DD becomes more and more prominent on consoles, retailers will start demanding for larger and larger margins on consoles.

 

[babybumb]

http://assets.sbnation.com/assets/1119979/GeForce_Grid_Press_Presentation.pdf

Okay, looks like Cloud gaming is moving really fast.

Why would anyone buy a $400 brick in two years?

 

[joker454]

http://assets.sbnation.com/assets/1119979/GeForce_Grid_Press_Presentation.pdf

Okay, looks like Cloud gaming is moving really fast.

Why would anyone buy a $400 brick in two years?

They are cheating a bit on their lag chart. For one they are ignoring 60fps console games, true there are very few but Modern Warefare is a biggie to just ignore as are sports games, quite an important category. Also they are assuming worst case lag for 30fps console games to make their case. Finally how does network overhead drop from 75ms to 30ms over the same network to the clients house, assuming it's the same spec h264 feed being transmitted?

 

[Acert93]

Don't misdirect us with dirty little facts!!

 

[AlphaWolf]

Cloud gaming just needs to run fiber optics to about 50m more households, get rid of throttling and user caps and they'll be good to go.

That or put something in the water to make people dumb enough to believe that half of what is in that PDF is true.

 

[Rangers]

Yeah, when they are either loss leaders or sell quickly. Consoles can be look at as loss leaders (without actually losses) because retailers use them to drive game sales. You think retailers would accept consoles margins because of accessories. Accessories sales are no where near game sales on an annual basis. Do you think GameStop can survive with wall to wall accessories?

As DD becomes more and more prominent on consoles, retailers will start demanding for larger and larger margins on consoles.

Except consoles aren't "loss leaders" because the retailer doesn't lose money on each one sold. They make money on each one sold. It's somewhere near $10-$20 for the ~299 versions.

My brother used to work at Best Buy, and their employee discount was 5% over cost. I can tell you the discount he got varied HUGELY over different items, illustrating varied retail margins are normal. Car audio equipment, or HDMI cables? Huge discount. PC's? Almost none, turns out PC's are priced very close to cost for whatever reason. Consoles are hardly unique. I guess here you could make some argument about PC's driving other sales for Best Buy, yet the same is true of consoles (besides accessories, everything from big screen TV's to HDMI cables in some way can be positively affected by console sales)

I definitely think Gamestop would be in trouble without physical software, but I'm also 100% certain all major department stores and online retailers would continue to carry consoles regardless.

 

[Shifty Geezer]

http://assets.sbnation.com/assets/1119979/GeForce_Grid_Press_Presentation.pdf

Okay, looks like Cloud gaming is moving really fast.

Why would anyone buy a $400 brick in two years?

Because the internet is still too sucky for live streaming games! Until that side is solved, streaming games and DD only consoles will have to wait. There's a whole discussion on this here.

 

[liolio]

About graphics in reaction to polls results linked by Ranger.
------------------
I wish we could get our hand on some studies done by the industry about people perception of graphics (if those studies exist that's it).

I'm close to believe that what people wants is not really what the technology (software and hardware) is after.

Quiet some people here seem to think that +/- high end PC graphics is not a proper target for next generation system.

The most noticeable thing PC gaming has to offer versus our old consoles (I've no longer mine though) is IQ.
PC gaming is all about IQ, higher resolution frame buffer, higher resolution textures, overall way better handling of artifacts.

Thing is for a lot of people here that does seem to be enough. I could get over this but there are more troublesome parts.

The last PC games also bring really neat improvement to lightning and shadowing. If I take BF3 (among others) the overall echo on this board is that doesn't make enough of a difference either.
Still those improvements costly. It costs a lot computations to have better shadow and lightning.

That really get me to think about what would be better?
I'm close to think that as far as IQ is concerned the game is over. Next gen can't offer more than nowadays high end PC.

WRT to computational power I also believe that nowadays high end PC are setting the upper bar.

So it's really about what can be done with this power that is not done on nowadays PC.
I think the answer might not be appealing to most people here.

I see nothing that would result in a major change in how video games look through the eyes of the average user. Either way manufacturers may feel like wasting power.

If they have studies that shows that improvements in IQ doesn't make such a difference on potential buyers they may as well save and search for something fresh somewhere else (input most likely).

It gets pretty obvious in quiet some genre, what more powerful (as they are designed) system get you? As far as gameplay is concerned I would say not much and for graphics it seems that we are hitting diminishing returns.
Diablo 3 is a marvelous example, the game could have been done years ago and play the same.
You don't need a powerful 3d accelerator for such a game, a good CPU + a weak GPU handling 2d graphic would mostly result in the same gaming experience.
It's not true for every genre but it's a pretty telling example, 3D as an enabler for new type of gameplay is no longer. All the potential has been tapped out.

In fact if we look at the whole picture and by that I mean all the video games from flash games to BF3, 3D brings really few to the overall gameplay.

I think that all this talk about next gen possibly not delivering, is in fact not really a graphics affair.
It's about gameplay. 3D graphics have granted us with a few new genres but it seems the potential is tapped out. With cell phone, social games I actually believe that people are rediscovering 2d games and doing so in fact how little 3D adds wrt to gameplay in quiet some genres.

I've the growing feeling that behind the complain about "power" there is something bigger, people wants a new enabler as far as gameplay is concerned. More may no longer be the new "new".

Tactile or motion mapping are new enablers but that only inputs (still it's very important), I think the only enabler left wrt to gameplay is voxels. Till more in the industry don't look there I expect nothing fresh, only extra eye candies (irrelevant to the gameplay).
There are significant inertia for the industry to not look in that direction, namely multi billion businesses. I believe the creator of Atomontage is right in most his analysis.
Billions are spend to make things cutter, billions are spend to have people to be interested in cutter things, truth is gameplay mostly stagnates as it does it takes more and more eye candy to have things to look "fresh".