Home Gaming Is Pachter silly for saying the console install base will never get bigger?

Is Pachter silly for saying the console install base will never get bigger?

4 min read

The end is nigh

We keep reporting on the ridiculous sales figures for this console generation. The PS4 and Xbox One are selling faster than last generation’s consoles, and are continuing to sell rather well around the world. If you believe Michael Pachter, though, this generation won’t be any bigger than last generation – and this is the last real console life cycle that we’ll see.

Remember before the launch of the PS4 and Xbox One tons of analysts were saying it was silly for them to do it, that console gaming was dead and mobile gaming was the only thing? Well, mobile gaming is declining and consoles are selling well, but that’s not stopping analyst Michael Pachter from predicting the end of days.

Speaking at DICE Europe, Pachter explained his number crunching:

The Wii U is going to sell 20 million units compared to 100 million for the Wii. The PlayStation 4 is going to sell 120 million or 130 million – that’s great. The Xbox One will sell 100 million to 110 million – that’s great. Add it all together and it’s 260 million units, maybe, and the last cycle was 270 million.

[…] This is the last real console cycle. I don’t mean that Microsoft, Sony and Nintendo will go bankrupt and shut down – they will not. Each of them will make another console, some people will buy them, and the next console cycle will be to this console cycle what the 3DS is to the DS. The 3DS is selling about 15 million units a year, the DS had five consecutive years where it sold more than 26 million. So about half as big.

So when I say that this console cycle is the last console cycle, the reason is that console games shouldn’t require a console. And I’m not talking about the cloud.

According to Pachter, games require a CPU, a GPU, storage, a controller and a display. However, as set-top boxes and smartphones become more sophisticated, there will be no reason to buy a console. Instead, the latest iPhone, Apple TV or Amazon Fire will have the juice needed to run Call of Duty or FIFA. Pachter argues that there’s a market of several million people who would never buy a console to play a game, but would definitely buy a game if it could run on their existing hardware.

I think the traditional gamer market – which has high standards – does broaden. But the only way you actually see a step function change in that is to pull the console out of the equation, and make it open to people who can’t afford or won’t buy a console.

I think this shift to full-game digital downloads, where everybody has the opportunity to play a game without having to invest $399 is a huge opportunity. It’s an opportunity for everyone in the value chain, except the retailer and maybe the console manufacturer.

Maybe I’m stuck in the past, but I’m just not sure that I can agree with Pachter. Sure, plenty of people would buy specific games if it didn’t require also picking up a console. However, consoles are increasingly seen as the center of the living room, as much as we might laugh at Xbox for promoting it that way. It’s not that people buy a console to watch TV, but it is a way that the purchase is justified for many. Even my non-gaming friends (yes, I do have some) have looked at buying a console as a Blu Ray player and Netflix device that could also be used to play the odd game – particularly party games. In the era of smart phones and increased consumer technology, dishing out a few hundred dollars or a few thousand Rands for a gaming console just isn’t that strange – it’s about half the price for a console as it is for a phone, and plenty of people get new phones every year or two. At least a console is a expected to last longer than that.

I’m not sure I agree with Pachter’s assessment. It seems like someone with an older view of the world trying desperately to seem really modern. It just doesn’t ring true. Then again, I could just be the one with her head buried in the sand.

Last Updated: September 22, 2015

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