The next generation of consoles will most likely come by the end of year 2013. One intersting question arise: how it should look like? Disclaimer: by “should” I mean “actually makes business sense for both platform holders and developers” and not “what hardcore gamers would like to see”. These meanings are at quite a big conflict, as we shall see later
In order to think about next gen we have to take deeper look at the general trends in the entertainment industry. Some of these trends were not significant at X360/PS3 launch, some did not even exist at the time. The world has radically changed in the past few years, invalidating many assumptions entire console industry was built on.
As a reminder, the classic console business model is based on selling hardware at a loss in order to build userbase and later getting the money back in the form of licensing fees (which implies absolute control over platform). Traditionally, consoles were very powerful at release – comparable to very good gaming PC. Other than cost optimizations and physical layout, during lifetime of a console hardware specifications are fixed. This provided value to customers in two ways: one way was getting very powerful hardware at a discounted price, and second was getting stable hardware configuration that is guaranteed to be compatible with every game released for the system. Of course, console gamers eventually end up paying more than PC gamers but because it is spread over long long time, it’s something people generally tend to overlook.
It’s all great – if it works. However, if the console doesn’t get enough traction it is a financial disaster. Developing custom hardware and operating system is insanely costly and time consuming. We’re not only talking custom boards and software here – we’re talking CPU/GPU design! At launch, instead of starting to make money on the console, even more money is spent. It’s a huge risk to take.
Subsidizing the hardware is something that was already put into doubt at the very beginning of the current console cycle by Nintendo. Wii was never sold at a loss, allowing the profit to be made on both games and hardware itself. It is reasonable to assume that designing the Wii was a lot cheaper than designing PS3/X360 – essentially is was slightly beefed up Gamecube with a new controller. Obviously, the break even point for Nintendo was much lower than for Sony/Microsoft, something I am sure both companies noticed.
What everyone noticed is that there’s huge group of people who didn’t mind worse graphics quality, and didn’t care about HD that much. I am not trying to convince anyone here that better graphics and all other stuff brought by high performance hardware do not matter. They do. But with every hardware generation the group of people who care is actually smaller and smaller.
Now some personal observation. While I do not play games on a PC that much, I managed to notice one thing related to console cycles. Every time game console is released PC players say “wow!” (deep inside, of course, no PC gamer will openly admit that
). Shortly (a year or so later) PC hardware and games are roughly the same quality. Fast forward two years and PC games are vastly superior (this is the moment when PC gamers proudly bash console gamers in public
). Finally, when new console generation arrives, everyone says “it’s about time”. I don’t see this cycle happening right now … sure, there are some DX11 titles that look very good (and look at tech demos from companies like Epic and Crytek!) but I don’t see people agonizing over the need for new GPU, or even complete system. Also, I don’t see people getting excited about new chips from AMD/Nvidia or new Intel CPUs. Hardcore gamers might still be in denial, but I’ll say it anyway: graphics quality is at the stage where providing even small gains in user experience requires expotential growth in computing power. In order to make people say “wow!” again next gen systems would need a lot.
How much? For starters, we need to double GPU power just to port existing content to 1080p. I’d say that for a meaningful boost in quality, we’d also need 4x programmable shading performance on top of that – so 8x the GPU performance as a bare minimum. It’s safe to assume we’d also need a lot more memory – just boosting the texture resolution 2x requires 4x the memory. But we’d want to have HDR rendering pipeline. Ooops, that’s bigger framebuffer, and probably some HDR textures. Not to mention a lot of modern rendering techniques require floating point buffers and textures anyway. Add more geometry storage, too (even if in the form of displacement maps). So, going “the old way” next gen console would need at least 4GB of total memory and 2TFLOPS of programmable GPU, all that paired with significantly faster CPU. This is doable even today, but even if you ignore costs, there is another catch in here, and that’s … power consumption.
The correct way of thinking about CPU/GPU today is only one: performance/Watt. Fitting above spec within 200W envelope is going to be very challenging, even with 22nm CPU/GPU process. Can Sony/MS take a risk and go with a lot more powerful hardware at the expense of noise and power usage? I don’t think so. But that’s exactly what they would have to do make games significantly better looking.
Now look for a while at the development side of things. Some game budgets are already in line with Hollywood movies. Next gen as described above would require a lot more content, and new content production pipelines. Insane budgets would only get bigger … There’s room for very few blockbusters out there, and even for them the business is getting tougher and tougher. Money and effort is likely to naturally flow in the direction of lower risk and higher ROI, and might mean moving away from traditional consoles. It’s not like developers don’t have a choice.
In fact, right now developers have more choice than ever! First of all, there’s iOS and Android, in both smartphone and tablet form factors. These platforms have relatively low barriers to entry and and are natural target for small/medium development teams. There’s also Steam on PC, along with some smaller online stores. Last but not least, there’s Facebook, along with smaller social networks. Any of these are (from developer point of view) better platforms than XBox or PlayStation.
That’s something significant even for big players in the industry. Simply speaking it’s better to invest in 5-10 small projects than in single big project – it is likely that some of the small projects will perform below expectations, or even fail, but at the same time it is unlikely that the entire investment portfolio will be a loser because the risk will be highly diversified. A portfolio of big projects is more and more like playing poker with your entire bankroll on table … Current state of THQ clearly shows what the effects can be – positive expected value is not enough to gamble with hundreds of milions of dollars (although some investment bankers thought differently
).
Platform without support of developers is a dead platform, and developing for consoles in the classic model is not really attractive any more from business point of view. XBLA and PSN might still be a viable target platform, but as they are it’s harder and harder to justify making any of them the lead platform – what we see more and more is that game gets launched on iOS/Android/Steam/Facebook and then possibly ported to consoles, not vice versa.
Pressure from other platforms is higher than ever, and I believe it is actually underestimated, even by some game industry insiders. Tablets and smartphones are right now at the stage of transitioning from luxury to commodity, and this process will only accelerate. Today iOS/Android devices are quite expensive. Imagine sub-$100 tablet with dual core CPU, 1GB RAM, 720p display, and network connectivity. That will happen a lot sooner than people expect it – there are already some very, very cheap Android tablets. Sure, iPad 4 will be more powerful than this, but it’s the low end where real changes will happen. This is going to totally change the economy of computing because tablet will actually be cheaper than a PC. Think about it: tablets will be used by people who never owned a PC in the first place! This hardware will also make its way to the TV sets eventually … we might even see game console released by Apple (I wrote about the possibility not long ago ago).
Good thing: more people than ever will own some hardware capable of playing games, and the game industry will grow. Bad thing for those who cannot adapt: the composition of gaming market will also change. Developers are quickest to make the shift because of shorter product cycles but console makers also have to adapt to the changing world. Their primary targets should be:
- Lower hardware costs. $600 at launch was shock few years ago, it is impossible now. Console should cost $250, $300 max, and that’s without subsidizing it in any way.
- More flexibility in pricing and business models.
- Lower barriers to entry for developers.
- Focus on building services to which console is only point of access, perhaps just one of many.
So, going back to initial question: how should the next generation look like? Here’s my checklist:
- Off-shelf GPU at DX11/OpenGL 4.x level, with 1 GB of memory, 600-800 GFLOPS, 60-80 GB/s memory bandwidth.
- Off-shelf quad core Intel CPU with HT, clocked at 2-2.5 GHz, or similar AMD CPU. Definitely x86, for reasons I’ll explain below.
- 2 GB of DDR3 system memory (4GB might be reasonable tradeoff)
- No optical disk drive. Physical distribution would still be supported but using proprietary memory cards (the same way PS Vita does it) – it greatly reduces costs, keeps power usage smaller, and has advantage of fast random access (possibly reducing need of installing a lot of data locally).
- Internal 120 GB HDD (possibly slightly bigger because of low marginal cost of additional capacity)
- Kinect/Move in every box and/or some sort of touch/tablet controller (Wii U, anyone?
).
- HDMI output, Wi-Fi 802.11n, Gigabit Ethernet, Bluetooth, possibly USB ports.
- AppStore business model for electronic distribution – simple and well defined approval process, developer sets the price, 30% revenue cut for platform owner. ESRB rating optional. Mature content allowed (but filtered). Freemium and in-game purchases allowed. Non-game applications allowed.
- Development model: standard APIs and tools only, no direct or exclusive hardware access. Essentially, PC-like model but with applications digitally signed and isolated from each other.
- 1080p used in the UI and suggested for games, but not required.
- One CPU core dedicated to running background applications, which can also be written by third party developers. Messengers, streaming audio/video services, social media apps … the only rule: if money is involved, 30% goes to platform holder
- Apple-like hardware cycle – refreshed version every 18-24 months or so, backwards compatible. It’s up to developers to decide if they want to support older hardware. 5-7 year cycle is in my opinion not realistic any more.
Using standard components means lower hardware design costs and later lower manufacturing costs. This device could possibly be sold at initial price of $250 (at the end of 2013) with no loss. Price point is friendly enough to attract casual gamers and casual game developers, especially with the specification above (move/touch control, non-gaming apps, AppStore model, easy development …). At the same time, console like this one would be powerful enough to easily run existing content in 1080p, although without major content/engine upgrades.
If you haven’t yet noticed, what I suggested above is simply a locked down low end PC, in a configuration and form factor that’s suited for gaming. It is an interesting opportunity for Microsoft – they could actually build slightly modified Windows 8 PC and sell it under XBox brand. Will any of that happen? I have no idea, it makes sense to me. We might still see a beast with 3+ TFLOPS GPU + 16-core CPU, that makes neighbor lights go dimmer when turned on. But is anyone actually interested in it? Or in developing games for it? I don’t believe so.