EA, Ubisoft predict the end of console hardware

Executives at both companies believe traditional, living-room boxes will eventually be supplanted by streaming devices.

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During their respective earnings calls this week, representatives from both Electronic Arts and Ubisoft forecast doom and gloom for traditional console hardware.

"Now on the console side, we expect there will be new consoles that are going to make this market continue to grow and we feel it's... we'll still have another generation of consoles before we have new types of consoles coming to the market," Ubisoft CEO Yves Guillemot said. (per GameSpot).

Investors pressed for a definition for these "new types" of game consoles, asking if Guillemot believed streaming was the distribution method of the future. His answer: yes, but not anytime soon. "We believe in streaming--it demands lots of bandwidth," he said. "We think it's going to grow but today, with the types of games we have, it will still take a bit of time to be more popular."

EA's CFO Blake Jorgensen made similar comments a few days earlier. Via GameSpot: "Our business model is so much more diverse now than it has been historically that the notion of a console cycle becomes somewhat irrelevant in our ability to generate strong earnings and cash flow. So we'll all be interested to see where Microsoft and Sony come out if they do something at E3 or sometime in the year to come. We're excited about the continued growth in the business and not afraid of a cycle change if that was to occur."

EA's business model isn't the only facet of the company adapting to change. During his call, Jorgensen fielded inquiries regarding the all-but-confirmed PlayStation 4 upgrade (codenamed "Neo") and the position it and other half-step consoles may occupy in the marketplace.

"In terms of any mid-cycle upgrades, I can't predict," he said, referring to the likelihood of brand new consoles (as in a PlayStation 5 versus a PlayStation "4.5" half step) offering backward compatibility to capitalize on droves of existing software. "What I can tell you is what we've heard publicly from the console makers: they are realizing the compatibility issue across consoles is an important consumer issue.

EA and other publishers hope that consumers will be able to carry their (likely digital) game libraries forward from now on, believing it will incentivize upgrading to new hardware.

Will PlayStation Neo, the NX, and a possible Xbox One upgrade mark the end of consoles? Ubisoft's Guillemot doesn't think so. He foresees at least one more traditional hardware generation "before we go to streaming."

EA's Peter Moore likewise believes streaming is the obvious next step, no matter how far off the bandwidth needed to make it ubiquitous. "Games will be accessed by streaming technology, so we don't need hardware intermediaries in between the two. If you and I want to play Battlefield 12 against each other, we'll just jump into a game via whatever monitor we happen to have in our homes. It'll be on a chip, rather than in a box."

Long Reads Editor

David L. Craddock writes fiction, nonfiction, and grocery lists. He is the author of the Stay Awhile and Listen series, and the Gairden Chronicles series of fantasy novels for young adults. Outside of writing, he enjoys playing Mario, Zelda, and Dark Souls games, and will be happy to discuss at length the myriad reasons why Dark Souls 2 is the best in the series. Follow him online at davidlcraddock.com and @davidlcraddock.

From The Chatty
  • reply
    May 12, 2016 1:52 PM

    David Craddock posted a new article, EA, Ubisoft predict the end of console hardware

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      May 12, 2016 2:12 PM

      I've been saying for some time that this is what's going to happen. I still wouldn't count out the possibility that the current gen is the last before we hit streaming; especially if these 4.5k incremental update boxes happen.

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        May 12, 2016 2:14 PM

        I don't think this will be the last generation of hardware, for exactly the reason Ubi and EA spell out: streaming is awesome, but the tech isn't available to make it ubiquitous yet. Maybe in 10-15 years.

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          May 12, 2016 2:33 PM

          I personally can't imagine it ever will be feasible. Right now you need a ton of bandwidth to be able to stream a game (as in, not a flat video file compressed at Netflix's end, a series of images that didn't exist until milliseconds ago) at 1080p with no quality loss. Now we're seeing 4K TV's and projectors hit the market. By the time we get to where we can stream 4K, whatever succeeds 4K will be hitting the market. It'll always be a catch-up cycle all in the name of not having a console in your home.

          This is assuming by streaming he means the OnLive sense of the word, as opposed to just streaming the content needed at the moment to your console.

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        May 12, 2016 3:49 PM

        When Weekend Confirmed was a thing, and I could be sure it was Friday night, I remember having a discussion with someone.

        Basically I pointed out that the current model wasn't sustainable for consoles. You couldn't have a Microsoft/Sony banking so much money on a platform, with game makers also gambling on the success of expensive titles that didn't have a guaranteed return. This was in the mists of mobile gaming blowing up. You had these sub 100 thousand dollar projects making more than games that budges in the millions titles. It also doesn't help that home consoles have not grown their user base much since the PS2 was king. You have Microsoft and Sony canalizing each other for the exact same type of gamer, and both are just making less money for their efforts. So you're selling roughly the same number of games to the same audience for roughly the same price, yet your product costs significantly more to make. It's the reason we have the Season Pass, and $120 deluxe editions.

        I don't think home console gaming will go away, but I think the idea of 'gate keepers' (Microsoft,Sony,Nintendo) will. There's nothing special about gaming hardware anymore. We're a long way away from needing specialized hardware to play games. You can get that anywhere, so why are we limiting these experiences to 3 different pieces of hardware (and to a lesser extent the PC)? It flies in the face of how we enjoy every other piece of digital entertainment today.

        Movies, books, and music can be had on anything. Why are we still using proprietary devices to run software?

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          May 12, 2016 3:53 PM

          Why are we still using proprietary devices to run software?

          Because the demands of that software is so much higher than other forms of media that it doesn't support a thin client model. And just when AAA console games are appearing to reach a point where a streaming thin client model may work (at least with some games) VR/AR are adding a whole new set of hardware/power requirements.

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            May 12, 2016 4:05 PM

            Except they're not very high. If you chart the performance from generation to generation, the leaps are smaller and smaller each time, with the PS3/4/X360/X1 being the smallest. We're talking middling laptop hardware. What is special about that today?

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              May 12, 2016 4:17 PM

              It's high enough that the working thin client models that have already shipped have technical issues for a significant portion of the games people are interested in, or come with other unacceptable compromises (graphics, latency, bandwidth, etc).

              Then there's also the matter of profitably delivering a thin client experience. There has to be powerful hardware running somewhere. If you don't have it running in your home then someone else has to run it in a server farm for you. And now when hardware upgrade time comes instead of distributing that cost among ~100+ million consumers you ask the platform owner to foot the bill to upgrade their data center (rendering their old hardware largely useless).

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                May 12, 2016 4:24 PM

                A no point have I ever suggest thin client streaming was the answer.

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                  May 12, 2016 4:24 PM

                  Correction

                  At*

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                  May 12, 2016 4:45 PM

                  then I don't really know how you're envisioning this working. Consumers buy hardware from a variety of different companies that are all indistinguishable from one another with no differentiation? What company is interested in that business? (see: dying PC OEMs, dying Android OEMs).

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                    May 12, 2016 4:58 PM

                    Because games don't require specialized hardware you'll just be able to play them on whatever device you happen to have, and the tools get to a point where you can scale across all those devices. If the bar for consoles is what we've just got, and people are okay with that, you don't need to shoot that high.

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                      May 12, 2016 6:45 PM

                      That would require cooperation between companies. Good luck with that.

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                      May 12, 2016 6:56 PM

                      like I said, what company wants to be in the business of providing completely commoditized hardware with no differentiation (and thus no profit)? This is what PC and Android OEMs are struggling with today.

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                        May 12, 2016 7:01 PM

                        Kinda like what's happened with the Xbox1 and PS4?

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                          May 12, 2016 7:35 PM

                          no, not like that at all. They offer hardware differentiation (graphics power, Kinect vs Move, PSVR) and software differentiation (back compat, online services, exclusive games, etc). No one is licensing those platforms to produce a generic Xbox or Playstation (and it's not just because MS/Sony aren't interested in allowing that). Games do not run for free on each without significant work, even if you get some nice middleware and engines to help out. And the platform owners aren't interested in enabling that. These companies spend a ton of money on hardware platforms that aren't significantly profitable per unit with the intention of making 5-10 years of recurring revenue from owners via software and services.

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                            May 12, 2016 9:00 PM

                            I find those differentiation so odd since they don't impact the only reason to buy these boxes today. The games. Graphically there are minor performance and slight visual differences between the two in a game like Division, but it has no impact on the experience. It's so subtle. Kinect and move are accessories that have yet to show why you'd want to even own them when it comes to playing games. They can change the overall experience when using those devices, but game? I don't see it.

                            PSVR is something I think you could hold up as a differentiator, though what it means for PS4 is about is clear as Microsoft's "Power of the Cloud".

                            I wouldn't have looked more toward their online offerings. Live VS PSN. Things that impact the games you can play. Even then Destiny is the same game on both platforms. You're really splitting hairs. In the end you're best served buying the one that has the games you like if you can't have them both. Strange...it's almost like the games are the big differentiator.

                            You're right when it comes to requiring optimizations to get the games running their "best" on either machine, but in 10 or 15 years I can easily see something like Microsoft's UWP really start to simplify that process.

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                May 13, 2016 6:16 AM

                "you ask the platform owner to foot the bill to upgrade their data center (rendering their old hardware largely useless"

                Perhaps, but that's already every data center's business challenge today. That's not new or specific to running game servers. I'm sure the guys that manage data centers have this already figured out. Also, the data center model probably means a platform could keep backward compatibility a much easier thing to manage, as long as the hardware pieces are available.

                If we have any data center Shackers, please let me know if I'm wrong here.

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      May 12, 2016 2:31 PM

      What about the future of gaming on PC's, Android consoles (e.g. Nvidia Shield ), and Apple TV? How long will these other types of platforms last and how will they evolve?

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        May 12, 2016 2:35 PM

        Something to note is that, while they may or may not be right, publishers would love to see the number of platforms dwindle as close to one as possible. So of course they're going to predict the end of consoles, it would be so much easier if they just had one hardware spec to deal with. Heck, this is why EA stayed off the Dreamcast - they wanted it to die and then there's one less platform to develop for.

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          May 12, 2016 3:53 PM

          If you're a software developer you want your software to run on everything. It means it can reach more people. Obviously there are certain practicalities with games, but ease of development is the only thing that comes with there only being one platform.

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            May 12, 2016 7:13 PM

            Yeah but if the potential audience is only split across one platform instead of multiple then theoretically you can be much more efficient.

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              May 13, 2016 4:07 PM

              So if that one platform is something like UWP that runs on many different devices you're gold?

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        May 12, 2016 3:29 PM

        I think we're going to see consoles become more and more like gaming PCs. We're already seeing it this generation; Both the XBOX One and the PS4 are architecturally similar to PCs and run full-fledged operating systems, and were not exceptionally more powerful than high-end gaming PCs on release.

        That's not to say you're going to be upgrading the video card in your XBOX Three, just that the hardware and core capabilities will be nearly identical to a gaming PC. The main difference will be guaranteed to work but locked-down hardware and software vs. more open but also more fiddly hardware and software.

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        May 12, 2016 3:51 PM

        I think there will just be more platforms. Buy a game, and it just runs on anything with 'enough' performance. Expect Samsung to crap out a T.V. that does gaming, and has a built in store.

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          May 12, 2016 4:46 PM

          what OS does that TV run? How does a developer make their game 'just work' on that OS?

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            May 12, 2016 5:00 PM

            If it were today they can go with Windows 10 or SteamOS. Although I could see Alphabet doing something interesting in that space.

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              May 12, 2016 5:46 PM

              so how do games magically run on this cambrian explosion of platforms that includes Win10, SteamOS, Android and 100 other variants from TV manufacturers?

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                May 12, 2016 6:48 PM

                Most of these parts are all coming from the same or similar sources. Look at all the Android phones for example. Most of them use some SOC variant from Qualcomm. You've got almost none using Intel's and nVida's designs, and then Samsung has their cut. Between Samsung and Qualcomm, they both stay pretty close to ARM's standard, and between the two of them.

                However the hardware doesn't matter as much as the software layer between it. All these devices run Andriod, and barring limitations within the version of Andriod (Software) they all run the same software or in this case games.

                What is inevitably going to happen, and has been happening is more and more developers are going to use a third party's tools. Look at all the games we got last generation that were UE3 games. A massive number of developers aren't making their own engines anymore. That's going to continue to shrink until there's about 3 or 4 good options.

                Look around. The list of dedicated use devices is so tiny today. The idea that you need a specific computer to play games is silly. That software is going to spread out, and will reach a much larger audience in doing so.

                My point about Alphabet is just that. Google leads the charge in software on televisions. You've suddenly got a unified platform to focus on.

                I can't see Microsoft, Nintendo, and Sony continuing to make consoles when the return on that investment is less than what they've all seen in the past. That's far more ludicrous than positive change.

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                  May 12, 2016 6:58 PM

                  I think there will just be more platforms

                  You've suddenly got a unified platform to focus on.

                  which is it

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                    May 12, 2016 7:04 PM

                    You just want a map :)


                    It's both. The software platform is unified thorough the likes of say Google. Android as the example. The hardware platform doesn't matter. If it has enough performance it'll run.

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                      May 12, 2016 7:30 PM

                      Android as the example. The hardware platform doesn't matter.

                      so who is making the hardware? Android OEMs are learning the lesson PC OEMs knew (which is why SteamOS was DOA). A race to the bottom on crappy hardware with software bloat to make money.

                      And since we're in the real world, how does iOS get magically abstracted away by Google?

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                        May 12, 2016 9:02 PM

                        SteamOS was dead because Windows is the better gaming platform, and SOS didn't do a damn to change that. Cost wasn't the issue.

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                          May 12, 2016 9:22 PM

                          even if SteamOS was faster and cheaper than Windows no PC OEM is interested in running their failing playbook all over again for someone else to profit from again

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            May 12, 2016 5:03 PM

            There are already TVs that support Playstation Now and others years ago supported OnLive. Its not out of the range of possibility for it happen.

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              May 12, 2016 5:46 PM

              right, that's the thin client model I was talking about in the subthread above

            • Zek legacy 10 years
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              May 12, 2016 6:25 PM

              It could happen tomorrow in certain major metropolitan areas. The problem is all the places in the US that don't have that level of connectivity, and won't for decades yet. Plus the places that simply can't have good enough connections like airplanes, etc. This isn't a software problem, it's a matter of real world physical construction that is extremely expensive and time consuming.

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                May 12, 2016 6:38 PM

                I don't think anyone has proven they can stream current generation games profitably even if they can do it on a technical level

    • Zek legacy 10 years
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      May 12, 2016 3:19 PM

      No way will streaming replace conventional gaming hardware entirely, I don't think it will ever be feasible. Best case it becomes accessible enough that XBox/PlayStation focus on that and only the PC allows for gaming hardware. But even that is a very long way away given our current infrastructure I think.

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      May 12, 2016 3:47 PM

      They really don't realize how shitty 90% of the population's internet connects are, do they?

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      May 12, 2016 3:55 PM

      Cute. It's like an inverted PC gaming is dying prediction.

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      May 12, 2016 4:08 PM

      I think I would be okay if EA and Ubisoft stop making games on platforms I want to play

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      May 12, 2016 4:32 PM

      Of course the third party publishers would like to be freed from the fees and standards compliance of the console manufacturers.

      These are investor calls, after all, so they're playing up their position.

      Could EA, Ubisoft and others try to develop their own delivery methods, the way every darn TV channel and movie studio is trying to start their own proprietary streaming service? I'm sure they'd love to, if the bandwidth wasn't a sticking point.

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      May 12, 2016 4:48 PM

      Unless there is some major breakthrough in physics people are going to want a local device preferably in the home. Its not just bandwidth that is the issue it is also the response time and latency of the system. Players are currently used to devices that react to inputs or poll thousands of time a sec and certain games require precise timing. Certain game genres might be able to make the transition but there are plenty that will not.

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        May 12, 2016 7:34 PM

        I've been saying this for years but everyone is retarded. Even steam link sucks

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        May 13, 2016 12:45 AM

        This is correct. It's much easier to have computing power at home than it is to stream.

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        May 13, 2016 1:05 AM

        Imagine playing Dark Souls over the internet.

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          May 13, 2016 1:13 AM

          I play dark souls using steam link and it's fine. It doesn't require super precise timing for anything. It's more about pacing yourself and your inputs. And not panicking.

          Camera control is slightly swimmy, but it's not noticble after a while

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            May 13, 2016 8:09 AM

            Oh wow, wouldn't expect that.
            I think the "not panicking" part is where I'd fail.

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      May 13, 2016 12:10 AM

      Keep dreaming, can't stream VR.

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      May 13, 2016 3:39 AM

      [deleted]

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        May 13, 2016 4:04 AM

        Remember Dennis Dyack?

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      May 13, 2016 5:31 AM

      Are they going to make the speed of light go faster?

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      May 13, 2016 6:01 AM

      Streaming maybe what the major publishers want, but they would cut big chunks of their customers out of the console market if they did this. So many people are constrained by bandwidth limits and data caps. Plus resent surveys indicate a lot of people only have internet access through their smart phones. Those people's primary gaming experience is on their phones and may always be on their phones. The current gen of consoles aren't selling well as it is. Do you really want to shrink that market further?

      What I really see happening is that smart phones continue to get more powerful until they approach the power of modern consoles. Then when you want to play a graphically demanding game you drop your smart phone into a dock that has expanded storage and a dedicated GPU that's connected to your 70 inch 4K UHD tv.

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      May 13, 2016 6:33 AM

      Streaming will never be viable as long as companies like Comcast have bandwidth by the nuts.

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      May 13, 2016 6:35 AM

      This from two companies that can't even agree on a common storefront to sell their games from.

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      May 13, 2016 6:42 AM

      There are still book stores, newspapers, magazines, movie theaters, malls and mail service. People have been saying all these things would be dead for almost 20 years. The only thing that the internet has pretty much killed is Tower Record stores. And I think napster and free mp3s along with ipods killed that. People still buy dvds and go to the movies.

      I'm in the camp that consoles will be around for a while.

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      May 13, 2016 8:33 AM

      Yes, gentlemen. And those new streaming devices will just be slightly difference versions of the one all the rest of use already - the PC.

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