Failing Manufacturers Are Pushing the Narrative That Consoles Are Dying, Says Ex-Xbox Exec 1
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There’s a strong sentiment among gaming enthusiasts and the industry at large that consoles are a failing product and nearing their death knells. This opinion has been pushed broadly on social media and across specialist websites, despite it never really aligning with reality. It’s true that profit margins have slimmed as costs have increased and sales have been turbulent through testing circumstances, but both the PS5 and Nintendo Switch continue to sell incredibly well.

Mike Ybarra, a former high-profile Xbox executive and Blizzard boss, believes “those losing push the narrative that fits for them”. Writing on X (or Twitter), he said: “Consoles will never die in my opinion. If your strategy is to win the living room, you need exclusive hits because winning is both a platform and games perspective. Sony knows how to make hits, and how to pick the hits from others to be exclusive. If I was them I would double down right now because the blood in the water is all over the place.”

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While he didn’t mention his former employer directly, it’s undeniably true that Microsoft has been building an “underdog” narrative among the media for years now – despite spending close to $100 billion on gaming acquisitions, including entire publishers like Bethesda and Activision. While it’s certainly never said it believes consoles are dying, at Gamescom earlier this year, Microsoft bigwig Phil Spencer said the industry is going to “change for all of us” as he explained his company’s reasoning for bringing Indiana Jones and the Great Circle to PS5.

There’s been much hand-wringing about PS5’s performance, with some under the false assumption that it’s failing, but it’s important to take stock of the actual facts. The new-gen console is actually trending 7 per cent ahead of the PS4 in the United States launch aligned. This is despite the semi-conductor shortage prompted by the pandemic causing the console to be all-but unavailable during its first couple of years on the market. Recently it’s posted some year-over-year declines, but only because the console registered remarkable sales in 2023, when it finally became readily available after the aforementioned shortages.

In Europe, the system is trending behind its predecessor, but its average selling price is also much higher. At this point in the PS4 generation, the system could be purchased for $300 and the $400 PS4 Pro was already available. Meanwhile, the PS5 Slim costs $500 with a disc drive included, and we’re still awaiting the release of the PS5 Pro, which hasn’t been officially announced by Sony yet. This is all important context.

Meanwhile, the Nintendo Switch is expected to eventually overtake the PS2’s record, a feat many thought previously impossible. It’s true that the hybrid nature of the hardware does muddy the waters slightly, as it could be argued the system is combining the House of Mario’s handheld and console businesses which would ever so slightly change the way it’s appraised, but the bottom line is that it’s one of the best-selling gaming products ever.

None of this, of course, aligns with the idea that consoles are dying. In fact, Sony has been registering record-breaking revenues for a while now, and it claims that the PS5 is already its most profitable system ever, owing to increased subscriber and microtransaction revenue, as well as higher overall prices.

That’s not to say there aren’t challenges facing the traditional console business: hardware costs aren’t coming down, making gaming more of a luxury than it’s ever been. Furthermore, building big budget single player experiences like The Last of Us and God of War is taking longer and costing more than ever before. These are headaches that Sony is currently wrestling with.

But to suggest that the console is dying doesn’t align with reality. The audience is ageing and the overall scale of the addressable market does appear to have temporarily stopped growing, but systems like the Nintendo Switch and PS5 are still doing extremely well.

Do you think consoles are dying? (1,738 votes)

  1. Yes, they're being replaced by mobile and PC%
  2. Not necessarily, but there are issues to overcome%
  3. No, the evidence shows consoles are healthy%
  4. I don't really know to be honest%

[source x.com, via wccftech.com]