Gaming console makers, who have built their businesses over the past decades on selling increasingly powerful devices, have seen demand drop with each successive generation. According to experts, it has become “much more difficult to distinguish the leap between generations”, and the human eye cannot see the difference between 4K and 8K resolutions.
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According to analytical agencies, the number of households with a gaming console has not changed for more than ten years. Many gamers refuse to switch to new consoles because they do not see enough reasons for this. While set-top box makers try to convince consumers that new versions are more powerful, faster, and have better picture quality, that’s not enough to drive sales if customers can’t see the difference with their own eyes.
Sony released the updated PlayStation 5 Pro console in mid-November. This $700 version uses AI to improve frame rates in games and offers exceptional image quality for at least 82 adapted games. But, despite the new technologies (and the price increase by $200), interest in the device is less than the manufacturer would like.
Image Source: Sony
Niko Partners Director of Research and Analytics Daniel Ahmad believes that PS5 Pro sales will account for 10% of total PS5 sales by the end of the console’s life cycle. This is lower than the PS4 and PS4 Pro, which accounted for 15% of total sales.
A similar situation has developed with the Xbox Series X from Microsoft. An increase in performance is accompanied by a corresponding increase in price, so many consumers do not see the point in purchasing a new device.
Image source: Microsoft
Each new model sets the bar higher, offering features such as ray tracing, facial animation and 3D modeling to realistically represent characters and worlds. But these technological innovations require increasingly advanced (and expensive) chips. Meanwhile, the cost of parts does not decrease as consoles age, and as a result, neither Sony nor Microsoft have reduced the prices of their four-year-old consoles.
Nintendo dropped out of the race for ever-increasing console power back in 2001, when its GameCube wasn’t a big success. Since then, company executives have been openly critical of the path taken by Sony and Microsoft, saying that using cutting-edge technology for consumer products without careful cost-benefit analysis is not justified. This is confirmed by the success of the Nintendo Switch, which is far from the most powerful console, which has become one of the biggest hits in the industry.
Image source: Nintendo
Nintendo will likely stick with this vision for its next-gen console. “Big budgets don’t necessarily mean better ideas,” says Ko Shiota, the company’s head of equipment development. “So we hope to continue to focus on the process of hardware and software teams sharing ideas to create cool things.”
It looks like Microsoft and Sony are also changing their strategy. Sony CEO Kenichiro Yoshida recently suggested that the key to success is not the number of copies sold, but the number of hours gamers spend playing games.
Microsoft decided to shift its focus from productivity to mass appeal. According to Microsoft gaming chief executive Phil Spencer, the company is “not looking to expand the market with $1,000 consoles.” Microsoft allows gamers to use the Xbox app on smart TVs, smartphones, handheld devices and laptops – its cloud gaming technology allows games to be streamed to devices that consumers already own. Xbox Game Pass Ultimate, $20 per month, gives you access to 50 cloud games.