Games Industry Could Be Headed Towards A Crash [Report]

    October 3, 2013

Many gamers today don’t know it, but the games industry almost died in 1983 thanks to a variety of issues, including market saturation. Nintendo pretty much single-handedly saved the industry a year later with the launch of the NES in North America, and it’s been a thriving business ever since. That doesn’t mean a crash will never happen again though.

SuperData Research and Digital River partnered up on a new report that looks at the current state of gaming. They found that 79 percent of gamers own at least one game console with the average number of consoles owned among that group sitting at 2.6. That’s a lot of hardware, and SuperData Research is concerned that gamers might not be willing to add more:

“Industry veterans will remember the crash of 1983, when the games market was saturated with hardware devices. Today, the industry runs a similar risk, as [with] a higher-than-ever console installed base, consumers may be resistant to adding more hardware to their living rooms.”

It’s definitely an interesting thought, and one that’s supported by recent data showing gamers increasingly moving to PC and mobile devices. In 2008, 42 percent of gamers played games on consoles while 37 percent primarily played games on the PC. This year, the numbers have almost reversed with 51 percent of gamers primarily playing on the PC while only 30 percent play games on consoles. It doesn’t help that 13 percent of gamers are now on mobile.

Things definitely look grim for consoles, but there’s a number of differences between the crash of 1983 and the gaming industry of today that are worth taking into account.

For starters, consumers really only have three consoles to choose from – the Wii U, PS4 and Xbox One. Sure, there are microconsoles like the Ouya, but most gamers are going to be concerned with consoles from the big three. In the years leading up to 1983, gamers had to choose from five different consoles. The lack of quality control on software also didn’t help matters as gamers increasingly stopped buying games after Atari botched its Pac-Man port and released the infamous game adaptation of E.T.

It should also be noted that there are now more gamers than ever before. A lot of the gamers that were brought in with the Wii and DS have since jumped over to mobile and PC, but there’s also a lot that have stuck around thanks to big franchises like Call of Duty and Assassin’s Creed. These same gamers might not upgrade to next-gen consoles this year, but they will once the franchises they love stop coming out for current gen consoles.

Even with all this, a crash could certainly still happen. I would argue, however, that a modern crash is far more likely to occur as a result of losing developers. People are going to want to play games no matter what, but they will go to the platforms that have the games they want. That platform has been mobile for the past few years, but that’s starting to slowly unravel as more and more developers realize that it’s nearly impossible anymore to get a hit like Angry Birds. Those developers are now moving back to console and PC where the audience is more receptive to their games and discoverability isn’t as much of a problem.

I’ve always been a believer that the gaming industry is big enough for everybody. That doesn’t mean things can stay the same though. Sony and Microsoft are already evolving to match what players want with social and mobile integration being built into next-gen boxes. They will have the big AAA games that players want at home with complementary experiences on mobile.

In the end, all of this is to say that the games industry is changing. That change can be scary, but it’s also presenting us with loads of new experiences and opportunities. There’s never been another moment in history where gaming has been more exciting than it is now, and we’re just getting started. Even if the big publishers suffer a crash, that’s not going to hurt gaming in the slightest. Developers with ideas are still going to make games, and gamers are still going to play them.

[Image: Wikimedia] [h/t: Games Industry International]