HEAD TO PAGE ONE FIRST IF YOU LANDED HERE
Conclusion
Nobody completes the recipe right now. Anybody can win. The fight will go on for years, with controllers and UX evolving, and I expect everyone will narrow in on the magic recipe from their differentiated positions.
It’s possible that there could be two categories, one cheap box that does apps, and one expensive box that does AAA games. But, there is no way that we will see a repeat of this generation’s PS3/360/Wii triad – there is not enough money out there to sustain one “AAAA” game box, let alone three boxes, and the app box will take most of the money off the table anyway.
We have entered a cold war of game consoles. Nobody wants to shoot first in the next generation. The game console business is shrinking. If Microsoft and Sony both launch next-gen $600 game consoles, they are likely to spend each other into oblivion.
Gamers will always want AAA blockbusters, but it’s a shaky proposition to design a new box just for them right now and sell it at a loss again. The current consoles will continue their cold war while the Smart TV battles heat up very quickly.
Yet, the dour outlook for games is only for the short term. In the long term, the winning Smart TV platform will enable a new renaissance of games in the living room.
P.S. – There is my grand vision of the future. But, before I sign off, allow me throw in a longshot: Valve, my love, get on the phone to Boxee. Build a Sandy Bridge box with their OS on top that includes a Steam channel alongside their apps. Design a great controller, something like the 360 controller (enabling AAA ports), but with pointing capability and fewer buttons. Call it the Boxee2. Get a hardware partner to build it, just like the original. Do this, and you might just give the big boys a run for their money.