DISCLAIMER: This is a speculative opinion piece based on public information. These opinions are my own and do not represent my employer.
The game industry is about to get flipped. The console in the living room has long been the king platform for games, but these days the living room is different. Only blockbusters like Call of Duty or breakout indies profit in the arms race of the AAA. The traditional games business as a whole is shrinking.
The old console cycle of simply iterating on graphics hardware is dead, and it’s never coming back. Nobody is sure what the next game box will look like. What’s more, Apple TV and GoogleTV are trying to bring some of the magic of Android, iOS, and the Web into the living room and are threatening to upend the PS3 and Xbox 360 in the process.
Game consoles are primed to be disrupted, and the next generation of Smart TV might just be the new champion.
Where We Stand
There is massive growth happening in the games industry on smartphones, Facebook, the Web, and Steam. That style of game product – digitally distributed, service oriented, focused on ongoing revenue – is bound for the living room.
When they get there, an app store will meet the realities of couches and big screen TVs and a very peculiar new box will be born. This new box will have a fancy controller, sort of like a game controller, and it will happen to play games, but it won’t be an Xbox or a Playstation.
It’s not just games that are in for a shakeup, there is a full on war brewing in the living room around access to video content. There are Smart TVs like those from Samsung, there’s Roku and Boxee, and the old giants like Comcast and Verizon are getting smarter about the services they offer. The Web and services like Hulu and Netflix are changing TV behavior forever.
Google and Apple that are the most interesting contenders because they are big and don’t keep content out like the game console manufacturers. In this respect they are open. What also makes them interesting is that games will be important part of their arsenal in this battle and that will pit them against Microsoft and Sony’s AAA firepower.
It certainly doesn’t look good for games in the short term – the traditional business is in decline. But, once the dust settles and the new living room app store reigns supreme, this new box could be incredible for the game industry. Read on for the full analysis: