Console gaming is not dying

The mainstream media needs to either stop reporting on video games or hire actual gamers to write about games. This has been a problem for nearly three decades, as the media “reports” on an industry they simply do not understand. This time, the Washington Post wonders if the new X-Box makes sense with the expanded popularity of mobile gaming. Is Microsoft hanging on to a dying industry?

Not quite. From the article:

Console sales have continued to grow, but at a much slower pace — keeping more or less steady with 20 percent of revenue for the industry.

And here is the money quote, with no pun intended:

“Console profits are higher than all the others, too, so the ecosystem is making a lot of money and in the end, this is what keeps everything moving,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy.

The last home console I owned was the PlayStation 2, which I sold in 2009. I am no longer part of the “red ocean” market, which consists primarily of 15-30 year old single males. (Having small children is a significant restriction on time for gaming.) But even being eight years removed from that market, I still understand it far better than the Washington Post, as proven by their coverage of the X-Box One.

There is no doubt in my mind that game consoles have a future, even with the increasing market share of mobile gaming. This is because of one simple reason: A cell phone is never going to offer the immense and immersive experience of the top console games. Furthermore, a cell phone screen is never going to give you the kind of precise control that a controller will give, which is a must for high-intensity action games.

The issue is not that consoles are dying. The issue is that the video game market is expanding. Nintendo saw this in 2006 with the Wii. Nintendo was not doing well against Sony and Microsoft with 15-30 year old males, which was called the “red ocean.” The Wii was not going to compete against the X-Box 360 and the PlayStation 3 with hard-core gamers. Therefore, Nintendo decided to go after a completely different market: The “blue ocean” of nontraditional gamers.

Nintendo was wildly successful, and now the game market includes millions upon millions of casual gamers. Now smartphones and tablets are picking up a significant share of that expanded market.

This is basic economics. The video game market is not and has never been a static pie. If smartphone games start selling more, that does not mean there is less market share for video game consoles or PC games. What it means is that there are more people playing games than ever before, and that market is growing. I simply cannot understand what is so difficult for the mainstream media to comprehend here.

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