As the author of the DeanBeat column, I enjoy exploiting my high office to make terrible predictions about the future of the game business. The time has come again, as the new year has arrived and the Consumer Electronics Show is about to begin next week in Las Vegas.
Kaz Hirai, chief executive of Sony, will paint his picture of a vision for technology on Tuesday at CES, but I will preempt him in making predictions about what Gartner says was a $93 billion industry in 2013. I am sure that I will be proven wrong as early as his speech.
I continue to believe that the game business will be unpredictable. I didn’t expect, for instance, that current-generation games would make a huge comeback as evidenced by Grand Theft Auto V selling $1 billion worth in three days of sales. I also predicted Activision would launch Call of Duty: Modern Warfare 4, but instead, it came up with Call of Duty Ghosts. Nor did I expect the biggest surprise: SoftBank and GungHo would buy 51 percent of Supercell for $1.53 billion, a transaction that valued a company with two mobile games — Clash of Clans and Hay Day — at $3 billion.
One of the bets that GamesBeat’s team has already made (you see how I shifted responsibility to our broader team?) is that games will compete with other forms of entertainment for “total world domination.” That is the theme we chose for GamesBeat 2014, happening next September. We believe game companies will compete on the world stage across all platforms for dominance, and that competition within gaming will be global.
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Still, the uncertainty is high, as we know very little about the slate of games that will hit us in the new year. There will be comebacks, bubble inflations, and crashes across what has become a very expansive game business. For fun and embarrassment, here’s my predictions from 2013 and 2012.
1. The next-generation war will be a dead heat
Above: The Microsoft Xbox One and the Sony PlayStation 4.
I believe that Sony and Microsoft are in the midst of a ground war akin to World War I. They’re equally matched in this round of competition. If either of them gains 100 yards of territory on the other, they’ll celebrate it as a decisive victory.
We’ll see the long-term market share take shape in 2014 in the competition between the Xbox One and the PlayStation 4. Last time around, both companies sold more than 80 million units a piece. Microsoft can outspend Sony on marketing, and it has Titanfall coming in March as an exclusive. But Sony has a more powerful system, and it is selling its machine for $100 less. While Sony has an edge right now, that may be just because it launched a week earlier than Microsoft. Meanwhile, one of the most promising next-generation games is Ubisoft’s Watch Dogs, which will be on both systems.
We’ll see which of the two makes big moves on the online front. Sony expects to launch its cloud-based Gaikai service in 2014. But Microsoft has a big advantage with its Xbox Live service and will likely have its own digital services to unveil this year.
2. Nintendo will dump the Wii U
Above: The Wii U has a tablet controller.
Nintendo did the best job of launching new exclusive games in support of a console during the holidays, with the debut of Super Mario 3D World, which was one of the highest rated games of the season. But Nintendo clearly misread the market this time coming up with an under-powered box that tried to incorporate the appeal of tablet technology into a home console. Gamers were not impressed.
The Wii U has sold around 5 million units in its first year. That’s a paltry sum, considering the huge results Nintendo saw after the 2006 launch of the Wii. In the past two quarters, Wii U sales have crawled forward in the hundreds of thousands of units. Michael Pachter, analyst at Wedbush Securities, predicts the Wii U will sell under 20 million units by the end of 2016. That’s not bad. But he expects Sony to sell 37.7 million PS 4s by that time, and Microsoft to sell 29 million Xbox One consoles — even though the Wii U had a one-year head start on those systems.
The financial liability of having the third-place console will weigh down Nintendo’s progress. It has a strong position with the portable 3DS handheld, but it may very well need to cut its losses on a doomed console. The opportunity cost is too great.
Nintendo might try to keep the Wii U and then expand to new platforms like iOS, Android, and perhaps even rival consoles. But the effect will be the same for the Wii U.
3. Steam Machines will grab a foothold among PC gamers
Above: Valve hopes the Steam Machines will soon take over living rooms.
Valve is debuting its SteamOS, Steam Controller, and Steam Machines in 2014. The latter will be launched by hardware partners, some of whom will announce systems at Valve’s press conference at CES. With only 300 employees, Valve may seem puny as a challenger to Microsoft’s Windows gaming ecosystem and the consoles. But Valve has a huge library of Steam games, a following of indie game fans, and 65 million users.
Some of those fans will migrate from the PC to the living room by playing their games on Steam Machines. But it’s not clear if Valve will build a big enough market for Steam Machines to really matter. A lot depends on whether it truly embraces the “open” alternative strategy. If it simply wants to make sure that Microsoft doesn’t shut down the Steam store on Windows, then that’s not a good enough reason to launch an alternative machine.
Valve has built up enough goodwill to be able to have a successful launch. But sustaining an alternative won’t be easy. The big questions are whether PC gamers are really fed up with Microsoft or not and if they are willing to pay for yet another machine to avoid the Microsoft tax. A lot will also depend on the ultimate price for Steam Machines. If the Steam Machine hardware partners price them at more than the PlayStation 4 or Xbox One consoles, then Valve will lose. If Valve’s system is ultimately closed, then it’s not going to be a better alternative.
4. Virtual reality will gather momentum
Above: A Virtuix 360-degree treadmill plus an Oculus Rift headset makes for a terrifyingly immersive video game experience at GamesBeat 2013.
Oculus VR has enough momentum, attention, and funding to launch its virtual-reality goggles, the Oculus Rift. The $75 million vote of confidence from investor Marc Andreessen and other venture capitalists will help Oculus execute on its promises and build a larger ecosystem of developers, who need to provide the critical VR games to make it take off.
There will probably copycats and new examples of cool applications for the technology, which could spread beyond games. The good thing for VR is that other companies are stepping forward with cool innovations, like Sixense (a maker of gesture control systems), and Virtuix, the maker of the Omni virtual reality treadmill. That means that Oculus isn’t the only company pouring money into virtual reality.
Oculus’s recruitment of John Carmack, the tech guru of id Software, also brings it instant credibility. As Oculus VR chief executive Brendan Iribe observed, Carmack specializes in getting more performance out of a platform than others think is possible. And Carmack has set his sights on making virtual reality work on mobile platforms. I wouldn’t bet against him.
But Oculus should recall the missteps of Ouya, which launched quickly but didn’t have a killer application for its micro-console. You only get one chance to make a good impression.
5. Alternatives to game controllers will grow stronger
Above: Tobii tracks the position of your eyes in 3D and determines where you are looking.
Tobii and SteelSeries just proclaimed they will launch an eye-tracking control system for games in 2014. That should tell you that the decades-old game controller may soon be on its way out. Computing is going through a revolution in user interfaces, and game controls are certain to go through a similar kind of change. The worst prediction is the one that technology will stand still and everything will stay the same.
When it comes to game controllers, technology has stayed the same for too long. We’ve already embraced touchscreens in a big way with tablets and smartphones. Voice commands are just getting a start with the Xbox One’s new version of Kinect. Google Glass has inspired game developers to create games for wearable devices.The number of new user interfaces is blossoming. One of them will be right for gaming.
But eye-tracking could very well enable both better precision and ease of use, as everybody knows how to aim with an eye. All it requires is a small piece of hardware that can detect your eye movements. The technology has been in refinement for a decade now. Its time may have come.