WildTangent CEO says next-gen consoles “not going to happen”
Thursday, August 21st, 2008 at 3:18am by Derek
Gifted with the clairvoyancy of a dodo bird, Alex St. John is anything but a Nostradamic prophet.
But like any dexterous doomsayer, that doesn’t stop him from making grandiose predictions. The outspoken CEO of the WildTangent online gaming network, St. John foresees a grim end to the console gaming era as we know it.
And he says it’s coming sooner than you think.
“There’s not going to be an Xbox 720 or a PS4, I’ll make that bet,” said St. John in an Aug. 15 interview with the United Kingdom’s Telegraph. “Not going to happen.”
Most of his reasoning is rooted in his own business interests; St. John plans to launch the Orb, an ambitious addition to his WildTangent online games portal, later this year. The Orb will allow WildTangent’s millions of monthly users to play deeper and more expansive games akin to their console-based brethren, something the service has largely lacked since its inception.
In console-crippling addition to the success he anticipates for the Orb, St. John also highlights the “money-losing” business model console makers such as Sony and Microsoft slave to as inherent proof of its own inevitable demise.
“The investment they made in creating the Xbox 360 and the PS3 is so vast, in the scale of billions, that no amount of games that they sell in the console’s lifetime will ever make them profitable,” said St. John. “They may be profitable on a quarterly basis today, but they’ll never recover the losses they put into those platforms. Nintendo is the only one making any money, and they are the ones with the cheap console.”
The bleak horizon St. John suggests lies in wait for console gamers is wrapped into a disheartening fajita of steaming disappointment by his ultimate prophecy:
“…The market will be dominated by online community-based games (by 2020). The PC will be the dominant platform,” said St. John from his ivory tower in the interview. “It will be monetised by microcurrency, advertising and subscriptions. And you probably won’t see another generation of consoles, because there will not be the economics to justify the investment.”
He also mentioned something about the moon glowing red as blood and the seas apparently boiling. Your guess is as good as mine.
August 21st, 2008 at 3:26 am
that guy is full of shit
August 21st, 2008 at 3:28 am
i need some of that he’s smoking cuz it must be good!
August 21st, 2008 at 3:52 am
They say that the Orb is a collaboration of the best painters, alchemists, poets, and philosophers known to mankind and that it is a source of untold power, although it’s never been activated and it’s true purpose is unknown. But if anyone WERE to try to activate it, who knows what untold destruction could be visited upon mankind. Therefore it is under the strictest orders that we must prevent it’s activation at all costs through ANY means possible, including, and especially, through the death of its holder.
August 21st, 2008 at 6:29 am
Burn the land and boil the seas, you can’t take next-gen consoles from me.
August 21st, 2008 at 8:57 am
I second the full of shit conclusion. He might as well just be begging people to join his crappy online service.
August 21st, 2008 at 9:39 am
The biggest problem with PC gaming is being forced to use a specific OS. I refuse to use Windows and I refuse to pay the price for a nice Mac, so I use Linux. There are not as many games for Linux as Windows and Wine works pretty well for some games, but it’s not a perfect solution. Consoles have several inherent advantages. If I buy a console game, I know it will work without having to check hardware requirements, though the Wii will challenge that. I have three choices of OS to use. I don’t have to worry about tweaking anything to make a game run. Those are all very big hurdles for the PC market.
August 21st, 2008 at 10:24 am
No economic reasoning? Um…. actually, it seems like it would be detrimentally stupid for any of the big three (accept Sony perhaps) not to release another generation of consoles.
August 21st, 2008 at 10:38 am
i bet development began a long time ago for the next generation of consoles that aren’t coming, but we won’t see them because of his predictions. sony & microsoft will realize what a futile effort they’re embarking upon and will drop their systems into landfills and redirect their focus on making computerized utter suction machines with built in dvd players. then nintendo realizing they used to make playing cards decides to go back to its true gaming roots with their blue ocean strategy and makes casino quality playing cards for indian casinos with a huge mark up. damn mr. st. john!!
August 21st, 2008 at 11:11 am
I think the main point is that the traditional method for console manufacturers to make money is becoming less successful.
Companies cannot continually produce a product that loses them money.
While the video game market is growing, it’s diversifying as well…which is taking income away from traditional “plug into the tv” consoles.
Eventually, your television WILL be your computer, and vise-versa. At that point, what good will a console system be?
That’s his point, and that’s what WildTangent/Orb is banking on.
August 21st, 2008 at 11:41 am
even if tv’s become pc’s it will not run the same way a current pc does. no one will buy a tv that you have to boot up and type in a password to get your os system going before you can actually get to the tv icon and click it on. my tv now is like a pc through the console based wii. i browse the internet fine, but when i want to watch tv it takes two seconds to turn on. even in the future the tv will always have audio-video or input cable options and i don’t ever think consoles will be obsolete. pc gaming has been around just as long as console gaming, but i think there are two differnet personality types one of whom enjoys the pc style and the other enjoys the console. so he can make all the ridiculous points he wants, but i doubt it will happen. we will have to reconvene in 2020 to discuss further.
August 21st, 2008 at 12:06 pm
Lord Toker said, “no one will buy a tv that you have to boot up and type in a password to get your os system going before you can actually get to the tv icon and click it on.”
I’m saying that the technologies will converge together. They already are, especially with digital television. I don’t buy your “booting up” argument. Instead of “booting up” your TV, it waits in a seemingly perpetual state of “standby” when it appears to be off.
Of course TV’s will continue to have auxiliary inputs…so people can still hook up their (soon-to-be-ancient history) VCR’s, DVD players, and video game consoles.
August 21st, 2008 at 12:34 pm
WildTangent is the devil, and I can say that after personal dealings with them.
August 21st, 2008 at 1:05 pm
Guys, you do all know that Sony and MS lost money on the launch of their latest consoles, right? And that it was so much money that, so far, they have not got that money back… and they won’t for a long, long time (we are talking years here).
So, Alex St. John does have a point… The problem is that he follows that point with a scheme that will not work either: PC gaming puts the burden of upgrades and innovation on the consumer who buys the latest PC and add-ons, and you cannot expand too much in that area either.
The only business strategy in gaming that has paid off plenty so far has been Nintendo’s… the one that many gamers condemn. Oh, the irony!
August 21st, 2008 at 1:26 pm
i actually agree with him- though it probably wont happen this next generation. i’ve been thinking lately that if nintendo wants to stay on top they need to just work on an all in one tv. if they dont someone else will and if marketed right and the cost is right it will win. why would i buy a new system for hundreds of dollars, a bluray player, hi-def tv, and computer again in the next few years? I’d like to see all of my entertainment brought into my home through one device and computers can do that but darn i love my tv. i dont know, thats if they wanna get rich…
August 21st, 2008 at 1:29 pm
In a way, this is almost another slam at Nintendo. Instead of this guy saying that in the future all consoles will try and follow the successful strategy of Nintendo (basically making a pure gaming maching, no extra / expensive fluff added). Instead he’s saying that the video game console is going to die because it’s losing money.
Uh, hello, I think that the Big N has already proven that you can make an incredible gaming system AND make money in the process. Why not hold up as an example what Nintendy is doing instead of dooming the whole market because Sony and Microsoft are losing money.
Some people just can’t see the forest through the trees.
August 21st, 2008 at 1:42 pm
“All-in-one” TV sets are NEVER a good idea.
A lot of people have learned that the hard way, due to rapid evolution and innovation in new TV sets being released every week/month/quarter, etc.
The price also drops down during those iterations as well, so if you get a “All-in-one” TV for $1400USD, then next month it could be much lower, like $1000USD! Then you’ll be kicking yourself time and again, “why, oh, why didn’t I wait???”
Whereas you have a TV and a console - specifically the Wii, it’s only $250USD, and has always been $250USD.
It was created to utilize the already-existing TVs on the market, as well as any future TVs that would come out on the market.
This eliminates the need to buy a new TV to play a new console.
And as people have said above:
Nintendo is the ONLY one making money when producing Wii units.
MS and Sony lose lots of money with each console unit.
We’ve got a ways to go until 2020, but I can say for sure that video-game consoles aren’t going anywhere.
August 21st, 2008 at 2:18 pm
I skimmed through the article (hey I’m honest :P) and I disagree with this guy for a number of reasons.
His solution is to have ad supported gaming using his service. What’s stopping Microsoft from adding ads to their games? EA already has billboards in many of their newer games, so they’re already making a profit. Microsoft displays advertisements in the dashboard, helping them make a profit. How does this make his service better than a console’s offering?
He mentions community oriented environments full of microtransactions and monthly fees. Not everyone wants a MMO game. I don’t have that kind of time, I like playing a few quick races on Mario Kart or a few FPS games on my Xbox 360. I pay a monthly fee for Xbox Live and I make microtransactions to buy new levels, maps and features. How does this differ from Orb?
It was Microsoft and Sony’s choice to create powerhouse consoles. Sony could have saved a lot of money not using Cell technology and including a BluRay drive in every console. They made the choice, and they’re paying for it. Microsoft didn’t take as many risks with the Xbox 360, but I believe their console has recently become profitible.
He seems to think that graphics and technology don’t matter. If this was the case we’d be content playing our 8-bit NES games. I love the Wii to death, but I think Nintendo could do a lot more with more power. I don’t think I’d be able to play another 20 years of the Wii either when technology is improving.
I compare his arguments to people predicting the death of the movie industry. They’ve been predicting the end of big budget films, yet we continue to see them being released. Sure working on big budget industries means more money and more risks, but you have the potential to make more profit. You can spend $10 million making a film and make $90 million off it, or you can spend $100 million on a film and make $900 million off it. Sure there’s a chance a $10 million movie will make $900 million, but big budget films generally make that type of money easier. So as a studio do you make ten $10 million films or one really good $100 million dollar film?
August 21st, 2008 at 3:04 pm
@Craig
Or if you’re Sony you make a 100 million dollar film (with the latest and greatest techno advances) and make 20 million off of it. In fact it costs you money every time somebody sees your film (but you are hoping to make up the lost money by selling lots and lots of popcorn and nachos
I think Nintendo would be the 10 million dollar film making 900 million dollars.
August 21st, 2008 at 3:49 pm
He does have a valid point, but he can only present it if we look at things a certain way.
Yes, Most game companies ARE in the red, including 2 of the three console manufacturers. However Nintendo has not only sustained profitability, they’ve actually thrived and grew it. If only third parties would realize that particular rising tide would lift all their boats. So the point is… If you ignore all the profitable companies, GAMING IS DOOMED because all the companies that are left lose money.
August 21st, 2008 at 5:57 pm
I can’t wait until we start getting mario games for the PC.
August 21st, 2008 at 6:14 pm
I see the man’s point: he’s arguing that the losses incurred in creating and selling a video game console are, on average, too great to justify utilizing that business model again in the future, when technology will inevitably be more expensive.
However, I don’t think the next-generation of console gaming is in any danger. I imagine Sony and Microsoft (not so much Nintendo - they’re doing fine) will reconsider how they wish to approach the next iterations of their game systems. Perhaps instead of upgrading tenfold, maybe the graphics won’t be as big of a leap.
Nintendo will probably employ the use of graphics technology similar to that seen on the Xbox360 because by then it will be cheaper. However, the gap between Nintendo’s inevitably low-tech system and its competitors will be smaller than it is in, say, this generation because the other companies will choose less substantial upgrades to their systems.
It all has to do with how the console manufacturers plan to approach the next generation. It’s…up in the air as of now, and pretty pointless to make assumptions about 2020 in 2008. But yeah, I get his point, I just don’t completely buy it. I like to think console manufacturers/creators are smarter than we sometimes give them credit for. ;D
August 21st, 2008 at 7:10 pm
“that guy is full of shit”
Yes.
Yes he is
However, I DO see the NEXT generation of consoles being the LAST generation.
PS4 , X-box 3 and whatever the next Wii will be will be the last true consoles. When those machines life cycles are finished, say 9 years from now EVERYTHING could be downloadable onto some generic game machine.
So this guy is full of sh!t. However, I DO think it will happen, only we have one more generation to go before we hae to deal with it.
August 21st, 2008 at 7:34 pm
I should add, as it crossed my mind after posting my first comment earlier, that while I don’t see consoles going away, I see full games being purchased in downloadable format instead of discs and cartridges and the like.
I can see each console manufacturer creating a console that is meant to store/play those downloadable games exclusive to it. I don’t foresee a generic game console as Wii Wii mentioned, but he had the right idea.
Just thought I’d add that. ^_^
August 21st, 2008 at 8:00 pm
If anything, the PC is a generic game machine and overall a better game machine for that matter. It still has the best games I’ve played to date.
August 21st, 2008 at 9:10 pm
So far, everybody ELSE that has predicted the future is micro currency has been pretty wrong.
The world won’t be ready for his dream for another 15 years.
August 21st, 2008 at 9:41 pm
I’m not a fan of “microtransactions” because I think it’s dumb to pay $1-$5 dollars for a new costume, character or item. I see it as the company trying to nickle and dime me, and they should have included this small feature in the final game. Larger content, like map packs, are worth the money, but these aren’t really micro as they’re generally $7-$15.
@Joshdad Heh, I agree. Nintendo is the $10 million dollar movie company that made $900 million off their console. This may work for Nintendo this generation, but you can’t expect Sony and Microsoft to have the same success by creating a $10 million dollar movie.
August 22nd, 2008 at 11:30 am
i didn’t know blu-ray, dvr/tivo, digital cameras, digital video cameras and all that were going to be extinct in 10 years (or the comparable devices of the time, meaning there will always be some form of media/device that can not be connected to the tv set like a camera to film your family vacation). yes why would we need input cables…yeah consoles that people buy will go extint. if you don’t like playing games on a pc that won’t change that is personal peference and even if the booting up issue is resolved by that time my personal peference won’t be changed. as long as people are alive that like nintendo (for example) we will support them by buying their product. even if the games are all downloadable like vc in the future i still see there being a console from the company that wants your money. it will take more than one generation for it all to disappear. maybe sony and microsoft won’t be in the game seeing as they took huge losses, but nintendo’s been there and done that before. i don’t think we’re going to see a multi-billion dollar company go the way of the dinosaur anytime soon.
August 22nd, 2008 at 11:47 am
you know what else is not going to happen? Alex getting laid
August 25th, 2008 at 7:06 am
Crazy talk.
And neither is he the first to predict the “death” of the console at the hands of some multi-purpose, super PC…