The next generation of video game consoles is shaping up to be a pivotal battle between social media and traditional media. Video games are rarely considered traditional media, but if you look at the looming distinctions Sony and Microsoft are bringing to the marketplace you see the same central battles over social media. The outcome will certainly have repercussions in the video game industry but probably several other industries as well.
Oh, and if you’re silently laughing to yourself because you think the video game industry is just a small diversion, it might be good for you to know that the video game industry is expected to grow from $67 billion worldwide in 2012 to $87 billion by 2017. And that number doesn’t even touch the other media consumed by people with video game hardware (movies, music, etc.). But if you still think that industry isn’t very large, consider this: the video game industry is almost twice as large as the entire global market for movies–those made just under $35 billion in 2012.
Although the video game industry has several significant segments, the home consoles are the main event and the upcoming eighth generation is all about media. With every other generation before there were significant differences in hardware–processors, graphics cards, etc.–and game delivery–cartridges versus game discs versus DVDs. This time, the hardware is virtually identical as this comparison shows (let’s leave out the Wii U because it’s been a flop). What’s been different this time is how each company is treating media and sharing.
Sony fired the opening shot in this latest battle when it announced the PS4 back in February. The announcement event itself received mixed reviews because for a console announcement it was surprisingly devoid of the console itself. Instead, the event featured several next generation games and also talked a great deal about social media. The new system’s controller was introduced and although it had a few updates here and there the one truly new feature was the Share button. Now gamers would be able to easily upload videos made from within a video game–either through Sony’s network or on more traditional social media. Players would also be able to ask for help from other players in the middle of a game–you could help a friend out by clicking a button on a Facebook post that will drop a power-up into your friend’s game or hop onto your PS4 and jump into the game to assist. These aren’t required functions, but they are all built into the platform with the hope that developers will utilize the new functions and players will enjoy them and demand more.
Microsoft’s latest console, the Xbox One, rather than focusing on bringing the game experience to more platforms is instead about bringing more content into the Xbox environment. Their announcement focused on how the new console can be the hub of your living room entertainment and how voice control can easily let you switch between watching TV and playing games. This new feature was not warmly embraced by the gaming community. Gamers have been screaming at their video game consoles for years, we didn’t really expect it to respond. But with these early console announcements we were already seeing a split. Sony was enabling gamers to share their experiences with the world and connect with their gaming friends in multiple ways. Microsoft was setting up the ultimate gaming cave and allowing more content to come inside that could be controlled by their box.
That small split widened into a huge rift with this week’s formal announcements at E3, the premiere video game industry event. Specifically, the battle over used games shows where these companies sit on the concept of sharing and social gaming. Microsoft has been changing their story about sharing games and the used game market (which accounts for over $1 billion in revenue just at Game Stop alone), perhaps in response to players’ questions. The latest use game position appears to be that Microsoft developed games have a complicated policy–you can give them away once, but allow access for a certain number of family members, and you can share with a friend so long as you are at their console and logged in. But that’s just Microsoft developed games–for other developers they can change permissions and could even require a transfer fee so that even if you buy a used game at a store you may have to pay an additional fee to the developer.
Sony has responded with this 22-second video that shows how games are shared on the PS4. SPOILER: You give your friend the disc.
Leaving aside the implications for the used game or game rental markets, this differentiation shows the perspectives being brought to the industry by the two largest players. Microsoft may not be forcing developers to disable sharing, but they’re certainly enabling increased controls in the face of a more open Sony environment. The same Sony environment which allows the gaming experience to be shared across multiple social media networks and friends.
Social media is all about conversations–that’s canon for social practitioners. To a lesser extent, it’s also all about sharing, because it’s really hard to have a conversation by yourself. Not impossible, but also somewhat alarming if you’re successful. As content areas adapt to this new social world–movies, music, books, and now video games–there will always be a struggle between the old guard that wants to maintain its traditions (and revenue stream) and the new guard that embraces the social world and sees opportunity along with uncertainty.
With video game consoles, the biggest battle will be in the quality of the games themselves. But to the extent the games are fairly even, look for this difference in approach to the social aspect of gaming to tip the scales towards one side of the battle.