Why the era of console gaming is about to end

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Console gaming as we know it is about to come to an end.

Although Nintendo’s Switch gaming system has done very well, there is reason to believe that the age of home video game consoles will soon be ending. Earlier this month, Nintendo President Shuntaro Furukawa quietly revealed in an interview that the foundational games company is plotting a future without consoles.

“We aren’t really fixated on our consoles,” noted Furukawa. “At the moment we’re offering the uniquely developed Nintendo Switch and its software – and that’s what we’re basing how we deliver the ‘Nintendo experience’ on. In the long-term, perhaps our focus as a business could shift away from home consoles – flexibility is just as important as ingenuity.”

Similarly, Nintendo has joined Microsoft in developing subscription-based streaming software that will allow it to keep pace with Sony’s successful PlayStation Now service. And it’s not just Nintendo that sees the end of gaming consoles on the horizon.

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Major Games Studios are Already Preparing for the Future

Two of the industry’s biggest content studios have also shown their awareness of a coming paradigm shift. In May 2018, Electronic Arts purchased cloud streaming technology created by game rental company GameFly with an eye toward acquiring millions of new subscribers. And Yves Guillemot, CEO of Ubisoft, indicated that he sees his company’s future in establishing a “publisher-channel” that will give players direct access to its games library.

Then there’s Epic Games. The company received a $15 billion valuation last October on the strength of the fact that its “Fortnite” title is a streaming juggernaut that generates billions in revenue despite being free to play. In fact, the game has been so successful it’s helped mobile gaming become bigger than PC and console gaming combined.

Once EA or another AAA publisher establishes a viable multiplatform game streaming service, it will not be long before the other publishers follow suit. After all, major corporations like Disney and Warner Brothers eventually figured out they could make more money by streaming the content directly to consumers rather than licensing it to an intermediary like Netflix.

Other Tech Giants Want a Piece of the Streaming Games Pie

The Big Three of console gaming are also facing competition from other tech monoliths. There have been reports that Google is making an entry into the high-end games market with a streaming console rumored to be called the “Yeti.” In addition to working on forging partnerships with the major studios, it said that the Yeti will be YouTube integrated. If so, the system might allow Google to take a bit out of rival Twitch’s robust game streaming revenues.

And given Google’s array of streaming products, the Yeti will likely mirror the now-defunct Amazon Fire TV Gaming Edition in being a multifaceted streaming media player, rather than just a machine designed primarily to play games. And though the Gaming Edition wasn’t as successful as the company hoped, it was recently reported that Amazon is currently plotting a major return to the direct to consumer gaming realm.

With their resources, Google and Amazon have the ability to create streaming devices that won’t face the pricing and marketing hurdles that befell the Stream Machines. With corporations of that size gunning for them, Sony, Microsoft, and Nintendo will need to invest heavily in streaming just to keep pace with the rest of the market.

5G will be the Final Nail in Console Gaming’s Coffin

There has also been a recent development in the mobility field that further portends the end of traditional gaming consoles. Verizon, AT&T, and whatever the merged Sprint/T-Mobile will be called, have all committed to making superfast 5G mobile Internet widely available by 2020. Because of the robust bandwidth and minimal latency offered by 5G, its availability will allow for the introduction of a new generation of Wi-Fi powered products and services.

Currently, one of the big theoretical applications of 5G is its ability to mainstream smart home technology. In addition to powering smart doorbells and ovens, it also has the potential to remove one of the major impediments to streaming gameplay. Though it’s easy to stream low-end puzzlers, it is much harder to stream graphics heavy AAA titles that host dozens of gamers playing together at the same time.

The limitations of existing wireless technology were cited as the main reason why Amazon ultimately binned the Fire TV Gaming Edition. Similarly, although it’s possible to stream games like “Assassin’s Creed Odyssey” and “Resident Evil 7” on the Switch in Japan, Nintendo has said that similar functionality will not be coming to the United States because of the country’s lack of Internet infrastructure. Once lossless 10-gigabit data streaming becomes a reality, those limitations will vanish.

The End Isn’t Here, but it is Near

Obviously, console gaming will not vanish overnight. Sony and Microsoft have made it clear that they are hard at work developing their ninth generation hardware. And with great features and appealing launch titles, there’s no reason to expect those consoles won’t be major successes.

But intense competition from streaming content providers, the rise of 5G Internet, and the technology sector’s move away from physical media are clear indicators that making machines specifically designed to play games is not the industry’s future. When you consider the billion dollar revenues offered by the games-as-service model, the death of gaming consoles seems inevitable.

While the end of console gaming will undoubtedly be disconcerting, regular systemic change is an intrinsic part of the nature of gaming. Just as Generation X came of age playing cabinet games and Millennials reached adulthood with home consoles, Generation Alpha will grow up streaming their “Nintendo experiences.”