The Future of Gaming: Big Threats from Small Places

ouyaThe current and one of the longest running game console generations in history has faced many challenges. This generation of consoles has seen a high cost of entry, oversaturation of the market and lack of exclusive content to really set the industry players apart.  The new generation that we’ll be seeing soon faces all of the same challenges, plus a few more.  The most obvious hurdles are the inability to justify new and more powerful hardware when the current generation does everything we need it to as well as the distinct lack of innovation and new features.

There is something I see as an even bigger threat to this upcoming generation and that is the challenge posed by mobile platforms. It’s a simple fact that smartphones are everywhere and with each passing generation their capabilities expand further and further. Even the current and past generation of phones are capable of producing more than serviceable graphics for casual gaming. Couple those capabilities with the substantially lower cost of games on these platforms and it’s easy to see why they are compelling to casual gamers. New devices on the horizon like the Ouya aim to take this experience from the pocket to the living room.

uTMwqFQDNFW6DaUZLOowa-J6dxxCMZqNWLU52Zr7IGoFor those of you who aren’t familiar with it, the Ouya is a $99 Android-powered home console that will be released in a few months. It is one of the most successful Kickstarter projects in history and has even attracted some industry backing from companies such as Square Enix and OnLive. The Ouya also promotes an open development environment by allowing easy modification of both the hardware and software.  This openness also extends to not charging licensing fees to developers and making all games available under a “free-to-try” model for gamers.

At such a low price, the Ouya’s value is clearly one of it’s most attractive features to gamers an developers alike. For casual gamers, the Ouya is an attractive option not just for the low price but for the fact it will likely also boast media capabilities similar to existing streaming set-top boxes. Because of its Android roots, gamers can also look forward to the likely porting of many existing Android games to the new console. For the casual audience, the $300-$400 price point of modern consoles is just too high for a device that will only see limited use.

While the Ouya may be the first such device to make a serious gaming push into the living room, it certainly isn’t the only one. This year’s CES has seen the introduction of several such devices that could heat up the competition. Threats are also present from existing devices such as the Roku and Apple TV. The Roku already has limited gaming capabilities and the Apple TV can be used to display any games from the various iOS devices using AirPlay. As this new part of the market grows, it isn’t difficult to imagine either device being upgraded via hardware or software to provide true gaming capabilities.

I should be clear that I don’t foresee any of these devices putting Nintendo, Sony or Microsoft out of business – yet. These devices will however force console manufacturers to reconsider the traditional wisdom of high licensing fees, game

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