10 years ago today, most of your friends probably owned a PS2. Today, you probably only have a handful of friends that has a PS3, let alone a PS4 or a Nintendo Switch. The console market is shrinking and there is no doubt about it. Playstation 2 sold over 155 million units in its lifetime while Playstation 3 has only sold over 83 million units, and that number isn’t going higher anytime soon. There is quite literally almost 2 units of PS 2 sold for each PS 3 sold out there.
Games are also getting more expensive to develop as we push the boundaries every single year with better graphics, voice acting and everything else games have to offer. Are the rising cost of producing games and shrinking of the console market, proof that console gaming will be a thing of the past sooner than later? Even if I didn’t think that was true, someone out there definitely thought so, namely Hideki Hayakawa, the current president of Konami. He is famous for being the guy behind the decision that got Hideo Kojima (renowned game designer and the mastermind behind series such as Metal Gear Solid) removed from Konami and getting the hugely anticipated Silent Hill cancelled. He did all these because he wanted to shift the focus of the company from console gaming into the “future” of gaming, mobile gaming.
While his decision may seem wrong for all of us hardcore fans of series such as Silent Hill and Metal Gear Solid, it makes business sense to shift focus into the mobile gaming market when that’s where all the money is at. In the year of 2015, Sony’s Game & Network Services (the department that includes hardware, software and services related to games) had an operating income of 401 million USD while Supercell OY (the game company that brought you games like Clash of Clans) had an operating income of 949 million USD.
This means that in the year 2015, a mobile game company earned more money than the entirety of Sony’s gaming department, which includes both software and hardware sales. That is how big mobile game has become recently. So it is definitely not a bad business decision to shift focus into the mobile gaming market where the money is at.
However, this begs the question, “why is the mobile gaming market so huge?” The answer is actually quite simple, it is the sheer amount of people that own a compatible device. Throughout history, there has always been an accessibility problem with games. The arcade days required you to have an arcade centre with the game you wanted to play nearby where you stay. Then came the home console days where you need to have the console to actually play the game, which made it accessible at the time for everyone who had sufficient money to buy the consoles and games. And then fast forward to now, everyone owns a smartphone.
Imagine this, if you’re a game designer, it would make sense that you’d rather design a game for smartphones, considering literally billions of people own smartphones. As opposed to a PS4, which only less than 100 million of people own. Your market for the game you design goes down to more than 10 fold just by designing it for the console market instead of the smartphone. While there is theoretically more PCs out there than consoles, one cannot confirm just how many PCs out there are even capable of supporting a Triple A title.
All these seems to suggest that console/PC gaming is going to be replaced by mobile gaming pretty soon. The combination of dwindling market size, profitability and cost is definitely not favouring console gaming. However, I would like to argue that there is a place for console gaming for many years to come, but in a totally different light. What I mean is that console games will no longer be made in a way where the game itself makes tons of money. Instead, it will build a franchise and a loyal fan base around it, where other products can be sold alongside it.
In fact, you can already see this trend starting to happen. Pokemon has always made most of its money from merchandising instead of actual games sales. Blizzard has also made games with microtransactions similar to most mobile games, such as Hearthstone (which is also playable on smartphone), Overwatch, and Heroes of the Storm. Games such as Hearthstone and Heroes of the Storm are actually spin-off games that use familiar characters from a collection of other games we’ve come to know and love. Their usage of microtransactions in this case is a very smart move; it attracts fans of other series to a completely new game and tempting them to buy items for their already favourite characters.
Recently, even Nintendo can be found doing the same thing. They released Mario Run and Fire Emblem Heroes which expands the Mario series and Fire Emblem series into the mobile gaming market to reap in some of the market share, and not to mention, both of those games aren’t doing too bad in the mobile gaming market.
Let’s not forget e-sports as well, which is one of the biggest portions in the gaming market, currently completely dominated by PC gaming, e.g. Dota 2, LoL, Counter Strike GO and Overwatch. Mobile game have tried to introduce an e-sport element, but to little success.
One advantage that the console and PC gaming has over mobile gaming is that these games create some of the most hardcore fans you will ever see. These fans would literally buy and get anything related to the series. The hardcore Nintendo fan, for example, would get all of the console, games, merchandise and even play the mobile game released by Nintendo. The hardcore Blizzard fan would also spend lots of money playing World of Warcraft, Overwatch, and the many games Blizzard has under its belt. This is unlike mobile gaming where most people playing the game do not form a lasting loyalty to the brand or game they play. For example, Pokemon GO, a fad that went away as fast as it came.
As of now, it seems like most of the company related with games is trying to readjust their focus and try their hands at the mobile gaming world. Obviously, some with more success than others. Mobile gaming right now is growing at a tremendous speed, and should not be ignored by major gaming companies, but that is not to say there should totally ditch what they built in the console and PC market, because that is not going anywhere anytime soon.
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