25. THE OLD WORLD
‘Consumer Software, Services & Devices’,
‘Entertainment & Devices’ Division Profit/Loss
Lifetime results for this
division = $7.807B loss
27. THE OLD WORLD
‘Games’, ‘Networked Products & Services’,
‘Consumer Products & Services’
Results for this division
since 2000 = ¥252.9B
loss (around $3.1B)
35. THE OLD WORLD IS LARGE BUT
SHRINKING FAST
• In summary;
• Investors are not showing confidence in the future of large traditional publishers
• Sony, Microsoft showing losses for console divisions over the last 10 years
• Nintendo in ‘disarray’
• Retail sales dropping year on year since 2009
• Major European retailer Game in serious trouble
• Casual & kids games on console and handhelds hit by an unseen force
36. THE DEATH OF DEDICATED ELECTRONICS HARDWARE
Down 17% Down 42.5% Down 32.6%
Down 20.5% Down 20.8%
45. THE NEW WORLD IS GROWING VERY
FAST
• In summary;
• Now 3 out of 5 of the world’s largest gaming companies distribute digitally, are
freemium focussed
• The audience sizes for a hit game has increased 20x on new platforms like FB, iOS
and Android
• New Mobile/Social platforms are driven by huge companies
• In Japan freemium social mobile has already overtaken the traditional business
46. THE LAST BIG CHANGE
When The Arcades Died, What Came Next?
51. THE LAST BIG CHANGE
The 1980’s
•Arcades dominated
home experience
•Better graphics
•Bigger screens
•Better controllers
52. THE LAST BIG CHANGE
The 1980’s
•Arcades dominated
home experience
•Better graphics
•Bigger screens
•Better controllers
53. THE LAST BIG CHANGE
The 1980’s
•Arcades dominated
home experience
•Better graphics
•Bigger screens
•Better controllers
54. THE LAST BIG CHANGE
The 1990’s
• Arcades start much more powerful
than home consoles
• Mid 90’s consoles and PC start
competing with textured 3D arcade
games
• Sony’s entry into the business - a
company 3.7x bigger than Nintendo
• 1998 Dreamcast launched, same as
Naomi system board, less memory
55. THE LAST BIG CHANGE
The 1990’s
• Arcades start much more powerful
than home consoles
• Mid 90’s consoles and PC start
competing with textured 3D arcade
games
• Sony’s entry into the business - a
company 3.7x bigger than Nintendo
• 1998 Dreamcast launched, same as
Naomi system board, less memory
56. THE LAST BIG CHANGE
The 1990’s
• Arcades start much more powerful
than home consoles
• Mid 90’s consoles and PC start
competing with textured 3D arcade
games
• Sony’s entry into the business - a
company 3.7x bigger than Nintendo
• 1998 Dreamcast launched, same as
Naomi system board, less memory
57. THE LAST BIG CHANGE
The 2000’s
• Home consoles now in parity or
above arcades in power
• Arcade still have better
controllers, bigger screens
• Microsoft’s entry into the business
- a company 6x Sony, 12.7x
Nintendo
• Dead arcades - novelty
controllers/cabinets, 2D fighters
58. THE LAST BIG CHANGE
The 2000’s
• Home consoles now in parity or
above arcades in power
• Arcade still have better
controllers, bigger screens
• Microsoft’s entry into the business
- a company 6x Sony, 12.7x
Nintendo
• Dead arcades - novelty
controllers/cabinets, 2D fighters
59. THE LAST BIG CHANGE
The 2000’s
• Home consoles now in parity or
above arcades in power
• Arcade still have better
controllers, bigger screens
• Microsoft’s entry into the business
- a company 6x Sony, 12.7x
Nintendo
• Dead arcades - novelty
controllers/cabinets, 2D fighters
60. THE TIPPING POINT
• Two big things happened;
1.Bigger companies entered the games business
• More marketing clout, grow the overall business
2.Chips got cheap enough and lower power enough
• Creating an ‘arcade experience’ in the home, that pulled in the arcade gamers
• Home consoles had always been cheaper and more convenient, but these advantages now
really mattered
• Worth noting arcades still often had bigger screens & always better controllers
61. THE NEXT BIG CHANGE
?
When The Consoles Die, What Comes Next?
62. THE NEXT BIG CHANGE
When The Consoles Die, What Comes Next?
63. THE DEATH OF DEDICATED ELECTRONICS HARDWARE
Down 17% Down 42.5% Down 32.6%
Down 20.5% Down 20.8%
65. • ’Sustaining Technologies’
dominate
• Disruptive tech enters the
market
• Incumbents don’t take it
seriously
• It rapidly increases in
performance
• Disruptive tech replaces
all usages
66. • ’Sustaining Technologies’
dominate
Large scale businesses
computing • Disruptive tech enters the
Scientific
market
computing
Personal • Incumbents don’t take it
Computer seriously
Small business
computing
• It rapidly increases in
performance
Hobby computing
• Disruptive tech replaces
all usages
67. • ’Sustaining Technologies’
dominate
AAA
Console Games • Disruptive tech enters the
market
Handheld Games
iOS/Android • Incumbents don’t take it
devices seriously
• It rapidly increases in
Kids Games performance
Casual Phone
Games • Disruptive tech replaces
all usages
68. We are here • ’Sustaining Technologies’
dominate
AAA
Console Games • Disruptive tech enters the
market
Handheld Games
iOS/Android • Incumbents don’t take it
devices seriously
• It rapidly increases in
Kids Games performance
Casual Phone
Games • Disruptive tech replaces
all usages
73. WHAT’S HAPPENING RIGHT NOW?
• Two big things are happening;
1.Bigger companies have entered the games business
• More marketing clout grows the overall business
2.Chips are getting cheap enough and lower power enough
• Creating a ‘console experience’ on the move, pulling in the console gamers
• Mobile games have always been cheaper and more convenient, but these advantages now
really matter
• Worth noting that consoles will still often had bigger screens & always better controllers
78. HIDEO KOJIMA
“Gamers should be able to take the
experience with them in their
living rooms, on the go, when
they travel -- wherever they are
and whenever they want to play. It
should be the same software and the
same experience,”
79. GABE NEWELL
“I suspect Apple will launch a living
room product that redefines people's
expectations really strongly and the
notion of a separate console
platform will disappear”
80. KOTAKU
‘Tim Cook holds the future of
gaming in his hands.’
82. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
% of the US population who visited the cinema on a weekly basis (Michelle Pautz, Elon University, 2002)
83. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
Total UK cinema attendance (British Film Institute, Cinema Advertising Association & Rentrack EDI)
84. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
UK box office cinema revenue as a % of GDP (Bakker 2008 and ONS)
85. CINEMA WAS CRUSHED BY TV
• The ‘platform holder’ (cinema) didn’t do ok - thousands of cinemas closed down
• The ‘content people’ (movie studios/distributors) did ok
• Made movies available on the lower-res ‘free to watch’ TV and ‘for hire’ VHS
platforms
• Games content developers need to do the same - move content to new low-res
platforms - or we will suffer the same fate as the cinema