New systems seek to unseat Sony, Microsoft and Nintendo in 2013
The console war is about to get a lot more crowded.
While announcements of next-generation devices from Microsoft and Sony are bound to grab headlines this year, a wave of new machines from various corners of the games industry is threatening to shake up the traditional three-company battle over your living room.
Kickstarter sensations Ouya and the Oculus Rift are expected to roll out before the end of 2013. The indie-game focused GameStick is preparing its debut. Hardware maker Razer is launching the curious Edge gaming tablet, while nVidia, best known for their graphics cards, is rolling out a mobile system called the Shield later this year.
2013 is shaping up deliver an embarrassment of riches for gamers. But with so many devices on the way, there's bound to be some confusion as well. And there are bound to be some casualties.
Analysts say there's little -- heck, virtually no -- chance that systems from Microsoft, Nintendo or Sony will be dramatically affected by the glut of new hardware coming this year. Each of those companies has tremendous market awareness and fan bases, and, at the end of the day, that's a high hurdle to overcome, even for systems that have some buzz behind them now.
"I can't imagine all of these devices will ever come to market," says Eric Handler of MKM Partners. "I think it will be very tough. I don't know if the video game market can support all of those devices. Look at the [Playstation] Vita. It's a very cool device, but you can't find anyone who has one."
It’s a fair point. Sony’s handheld system, released last February, has failed to catch on in North America and trails Nintendo’s 3DS handheld by a significant margin.
That doesn't mean they're all destined to fail, of course. The Ouya, an Android-based system that enjoyed the best first day in the history of crowd-funding site Kickstarter, continues to intrigue industry observers since it could offer a different enough experience to hook enough users. With an expected retail price of under $100, it also boasts a value proposition that some other systems (like Razer's Edge, which starts at $1,000) can't boast. And it has a lot of gamer bigwigs backing it.
"It's been a long time since a new console was introduced, and it is likely that pricing for consoles will go up," said Wedbush analyst Michael Pachter when the Ouya was unveiled. "By coming in at a lower price point and challenging the existing pricing model for TV-based games, Ouya could hit a sweet spot with gamers."
"I think it could be that Indie device of choice for games that don't cost $60," he says. "It depends on how well it can be marketed. … The question is: How can you make the casual stuff compelling by adding a joystick to it?"
Another potential disruptor is the so-called Steambox. Essentially a piece of hardware designed to run Valve's vaunted Steam service in the living room, it’s long been a dream of PC gamers itching to move to the couch. The hardware itself is seemingly going to be pricey, but with its firmly established software base (and legions of users), it could overcome that obstacle.
"It's already a platform," says Inside Network analyst Billy Pidgeon.
One of the biggest difficulties facing all of these system manufacturers could be the lack of retail support. Generally speaking, console hardware itself isn't a big money maker. Like publishers, retailers make more on software sales. With most of the new systems eschewing brick and mortar game sales for their games -- instead relying on the cloud, free-to-play or their own digital distribution network -- there’s an awareness issue.
Plus, there aren't a lot of mass-market customers looking for a $1,000 dedicated portable gaming device or gaming PC hardware. As a result, says Pidgeon, major console manufacturers don't have to worry too much.
"All these other systems coming out create a lot of noise and confusion, but I don't think it impacts things much," says Pidgeon. "High end hardware? To me, that not going to have a disruptive effect."
That said, Pidgeon adds, it's hardly the glory days for Microsoft, Sony and Nintendo. The Wii U hasn't sold to Nintendo's expectations, putting the company in a tricky spot as it tries to lift sales without dropping prices. The next Xbox and PlayStation, both expected to be formally unveiled aound the E3 conference in June, may not see the same sort of reception they saw at the start of this generation, either.
"There's going to be impact on those consoles anyway, because expectations for penetration and sales velocity are going to be overly high," he says. "They're not going to sell like they have in the past. … People are buying fewer packaged goods and you're dealing with smaller user bases today."
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