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Senior Analyst Matthew Bailey shares insights from Ovum’s latest Game Console Device Forecast – analyzing key trends shaping the future of the home game console market, and assessing the opportunities on offer for telcos, hardware manufacturers, OTT platform owners, game developers, and publishers as the next generation of video gaming emerges and evolves.

Game consoles, and their manufacturers, are on the precipice of significant change

The emergence of new connected devices such as media streamers and smart TVs, the (re)emergence of device-agnostic cloud gaming platforms and technology such as Google’s Stadia, and the growth of mobile gaming are threatening their relevance to gamers, software developers, and publishers as well as the broader media and entertainment market.

The game console market is currently at a crossroads: Sony’s and Microsoft’s eighth-generation consoles are coming to the end of their lifecycle, with replacements expected in 2020. Meanwhile, Nintendo is seeing success with its Switch console, which straddles the line between home and handheld consoles, meaning that it competes with both home consoles and smartphones.

Competition between the three incumbents is also set against the looming threat (or opportunity) of cloud gaming, which will eventually eliminate the need for dedicated consoles and usher in new competition from global tech giants such as Google and Amazon, in addition to other smaller vendors. However, Ovum believes that this will not be the case over the next five years, when console sales and installed bases will remain strong despite declining penetration in some mature markets.

Source: Ovum Game Console Device Forecast Report: 2019-24

Cloud gaming will be the next battleground for manufacturers, tech giants and OTT players as console penetration falls

2013 marked the launch of the current eighth generation of video game consoles, with the release of Microsoft’s Xbox One and Sony’s PlayStation 4. The latter emerged as the clear leader in terms of sales, nearing the 100 million mark this year. The Nintendo Switch, released in March 2017, further boosted consumer interest in console gaming. According to Ovum’s latest game console forecast, there were 260 million consoles in people’s homes globally at end-2018. Growth, however, is set to slow down substantially – reaching only 300 million in 2024. The longer-term prospect is less than promising: Ovum predicts that global console hardware unit sales will effectively halve between 2018 and 2030.

Source: Ovum Game Console Device Forecast Report: 2019–24

Faced with a gloomy long-term outlook for consoles, Microsoft, Sony, and – to a lesser extent – Nintendo are making bold moves in cloud gaming. They aim not only to mitigate the looming threat and maintain their market dominance in the traditional gaming segment, but to reach a much wider audience. Sony has offered game streaming as part of its PlayStation Now service since 2014; Microsoft’s own xCloud service is expected to launch this October; and Nintendo has dipped its toes in cloud gaming by offering Resident Evil 7: Cloud Version on Switch in Japan in late 2018. However, cloud gaming launches by OTT giants with strong cloud computing infrastructure, such as Google and Amazon, will create new competition.

What should console makers and game developers do next?

Console manufacturers must prepare for a cloud-first, post-console market. This will be easier for Microsoft, with its significant cloud technology and infrastructure. While Sony already runs its own cloud gaming service, it will, along with Nintendo, struggle much more against OTT giants in this area. Manufacturers’ biggest strengths are their gaming brands: partnering with other prominent cloud-technology vendors (including Microsoft, as Sony has already done), network operators, and even other smart TV, smartphone, and tablet manufacturers would provide the scale, technology, and brand equity to compete.

Games, meanwhile, should be designed with cloud gaming in mind. Games that rely on “twitch” reflexes, such as competitive online multiplayer first-person shooters, will be more impacted by latency brought in by game streaming, making slower-paced, single-player experiences a better option at this stage. Meanwhile, game progression systems and save states must be designed to withstand server disconnections to avoid frustrating game experiences.

Publishers and developers should also embrace new partnership opportunities. Rethinking how games are sold is going to be essential – cloud gaming’s business model remains a big point of contention/pain point. Cloud gaming also means that tech giants and prominent telcos will become viable partners over the coming years, in addition to the three main console platforms. However, publishers need to account for the economics of the all-you-can-eat nature of any new subscription platforms that emerge.

Ovum is a market-leading data, research, and consulting business focused on helping digital service providers, technology companies, and enterprise decision-makers thrive in the connected digital economy.

Through our 150 analysts worldwide, we offer expert analysis and strategic insight across the IT, telecoms, and media industries.

Ovum is part of Informa Tech, a B2B Information Services business serving the Technology, Media, and Telecommunications sector. The Informa group is listed on the London Stock Exchange.

https://ovum.informa.com/contact/contact-us

“I’d be careful about the notion that streaming will automatically bring the entire business to a subscription model.”

– David Haddad discusses recent shifts toward subscription in video games, and how those differ from other industries.

Both cloud-based gaming services and subscription services are rising to the forefront of the game industry all at once, but Warner. Bros Interactive Entertainment president David Haddad isn’t sold on the idea that streaming will make subscription models a necessity.

Speaking to VentureBeat, Haddad explained that streaming services have brought about major shifts toward subscription services in other industries, but that he doesn’t necessarily believe the same thing will be true for video games.

“I just think there’s a lot of differences compared to other forms of media,” Haddad tells VentureBeat.

One of those key differences, and why he says traditional game sales won’t be stomped out by subscriptions, is the differences in how individuals play, and how many games they typically burn through a year.

“I do think that we’ve proven that a transactional business, as we call it, where you pay a premium price for an experience, where gamers can have 30, 40, 100 hours of play–they’ll pay a premium price for that. That’s great for us. We have a history of that transactional business,” says Haddad. “There are gamers that want to consume way more than two or three games a year, which is sort of an average right now. There may be people that like the consumption pattern of having a subscription so that they can try more games and play more games.”

“But the behavior today is actually fairly concentrated on players spending most of their time in a handful of games that they carefully pick and that are able to secure a premium price in the market. I think it’ll be a mixture of both.”

Streaming and subscription services are just one part of the larger interview VentureBeat had with Haddad at E3. The rest of that conversation, including talks about the annual show itself and the company’s recent venture into AR, can be found here.

In celebration of the Summer Sideshow Update, play Killing Floor 2 for FREE starting now through Sunday at 1PM Pacific Time. You can also pickup Killing Floor 2 at 67% off the regular price!*

If you already have Steam installed, click here to install or play Killing Floor 2. If you don’t have Steam, you can download it here.

*Offer ends Monday at 10AM Pacific Time

Remember the unbelievable sale last week for NBA 2K19 on the North American eShop and multiple other digital platforms? The game received a limited-time 95 percent discount, taking it from the regular price of $59.99 all the way down to just $2.99. Even people who don’t play sports games on a regular basis found this deal hard to pass up.

Unfortunately, though, some of these new players got quite the shock when they were seemingly forced to watch “unskippable ads” in their paid game before each session. Sure enough, It led to immediate outrage and a lot of confusion online. Although these 2K TV advertisements are being reported elsewhere as a new addition to the game, this is apparently not the case.

According to veteran ballers, these in-game video ads are nothing new and can be disabled in the game’s settings menu. Reddit user Totalnoob18 cleared things up over on the Xbox One subreddit:

“You can turn off 2k tv in the setting. Wont gonna get the ads, nor that [removed] tv before games.”

A Reddit user on the PC Gaming subreddit known as iHicham added to this:

“yeah those ads aren’t new at all”

Eventually, this information spread to multiple subreddits – including the Nintendo Switch one. While it’s still a questionable practice for developers and publishers to insert video advertisements within paid games, it’s now at least clear new players can disable the 2K TV in the settings menu.

Did you pick up NBA 2K19 during the recent sale? Are you holding out for NBA 2K20? Share your thoughts below.

Last September, Switch owners were treated to a pleasant surprise when Hopoo Games’ acclaimed action-platformer Risk of Rain suddenly appeared on the Switch eShop. Now, it seems like Nintendo’s hybrid platform could be receiving the 3D sequel in the near future.

Risk of Rain 2 for Switch has been recently rated by the USK – Germany’s classification board. This follows on from rumours at the end of March, when dataminers found multiple file names referencing the Switch in the PC version of the game. This included a mention of handheld mode, Joy-Cons and even Pro Controller support. All we need now is an actual confirmation. In the meantime, take a look at the rating below:

Here’s some information about the sequel as well as some screenshots, courtesy of the Steam page:

The classic multiplayer roguelike, Risk of Rain, returns with an extra dimension and more challenging action. No run will ever be the same with randomized stages, enemies, bosses, and items. Play solo, or team up with up to four friends to fight your way through hordes of monsters, unlock new loot, and find a way to escape the planet.

If you would like to try out the original game, you can purchase it from the eShop right now for $9.99 / £8.99.

Have you played the first Risk of Rain game on the Switch or another platform? Would you be interested in trying out the sequel on Switch? Tell us down in the comments.

© Nintendo Life

Update: Sorry folks, it looks like the listings have now been removed from the Spanish GAME website.

Original Story: The Spanish arm of gaming retail specialist GAME has added a whole bunch of Switch Mini accessories to its website, adding more weight to the rumours of a cut-price, revised edition of the system.

The listings lack images at present, but some of the items – such as the TPU skin and travel case – are similar to the listings published by Chinese accessory maker HonSon last week.

We’ve spoken to a source with knowledge of this matter and can confirm that retailers are already discussing the new console, as well as a third Switch model, entitled Switch Pro. We already know that Nintendo has moved its production out of China to avoid the impact of US tariffs and that three Switch models are being manufactured at the new site.

We also know that Nvidia expects its deal with Nintendo to give it a boost this year, and that looks set to release a new version of the Nvidia Shield TV that could share the same improved Tegra X1 chipset with a potential Switch Pro.

What do you make of this new development? Do you think Switch Mini is happening, or this is all just speculation?