The Impending Console Hangover

Published: 01/11/2013, Last Updated: 01/11/2013

So I'm going to take my gloves off a bit on this blog.  Prepare yourselves!  :-)

One of the biggest things I'm getting very sick and tired of reading about lately is all the news talking about how the video games industry is down.  Really?  That's at best only partially accurate.  Want the accurate way this should be reading? Here it is:

The Console Video Games Industry is WAY down.  The PC Video Games Industry continues to thrive and grow. 

So how or why can I make such a bold statement?  It's simple.  The core of the issue comes back to what is, or isn't being reported on.  There are really three major culprits. 

  • Culprit #1:  Video game unit sales & revenue are way down at retail.  However; most retail is Console. The analyst/researchers only report Retail.
  • Culprit #2:  Digital sales are completely missing from the equation.  All Free to Play/Freemium games - missing.  Subscriptions - missing.
  • Culprit #3:  We're at the tail end of the 7th Gen Console cycle.  They're simply long in the tooth.  The 'game has changed'.

When you factor all of these things in, you end up with the type of sensationalistic headlines we've been seeing for the past several months.  Video Games are dying.... Video Game sales continue to plummet (at Retail)... and so on. 

So let me include you all in on a couple of little secrets.

  • PC Gaming started the migration to digital in the late 90's - believe it or not.  This is a combination of things like games going 'massively multiplayer online' (MMO), digitally distributed such as BattleNet, & then a bit later Steam.  Ironically, even the BitTorrents which used to largely be illicit are now being legitimized by moving Free to Play games.  (Zero Piracy).  Ironic isn't it?

When you count a game... you should count all iterations of that game.  One could technically say a game like League of Legends (now with over 70m registered users) has sold zero units.  Yes... that's zero units.  However; would anyone argue with their success?  No.  The more important thing here is volume of users.  If you provide a good product - they'll be willing to pay for in-game digital content via a micro-transaction.  You wouldn't be able to duplicate that type of success on a Console. It'd require, in some cases, over 100% attach rates!  Games like LoL make the latest Call of Duty #'s appear small!  So this means... we should consider both units & users into any equation.  Here's a volume look of what that'd look like for all of the key gaming platforms. 

Here's another view that's a little more granular.  Don't worry... I built this off of publicly available sources.  (Cross checked against 3+ Research/Analysts datasets). 

Sorry for the quality.  I can only divulge so much.  At some point in the future I'll put in estimates for the estimated Console units moved across their digital services.  However; for now.. as you can see for PC, retail is only roughly 1/20th of the full equation. 

There's more, but I think you all get the idea.  As the Console total available market shrinks, or diminishes, we'll continue to see somewhat specious reports about the industry being down.  My advice?  Ship a PC Game if you aren't already.  :-)




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