Why I am cautiously optimistic about the Wii U

So now we know all about the Wii U. Nintendo announced the price, launch date and other details. And, last Friday, I had my third and longest hands-on session with the console yet. Here is a little video clip I produced at the event (in German), if you are interested. And here is a German podcast about the Wii U which had invited me. At first, I was fairly skeptical about the Wii U. After last week’s event, though, I feel a little more confident with a few reservations remaining. Here’s why.

Gameplay > graphics, a winning formula?

When I played the console first at a post-E3 event in Cologne, the graphics were clearly underwhelming and, to a large extent, they still are. I can promise that you will not see a game that will immediately convince you that this is a step up from the current generation, graphically. While the next Xbox and the next PlayStation may have a similar problem, this is a real concern for Nintendo. Obviously, titles coming out after the launch window will look better. But a title like ´Super Mario Bros.´ with its simplistic design style is hardly the best vehicle to show off HD graphics. And Nintendo made the big mistake of developing all first party titles for the launch window in 720p resolution only, for whatever reason.

Some third party games, like ´Skylanders: Giants´, do not look much better than their Wii predecessors. And others, like ´ZombiU´, are a mix of great graphics (when the player is using the tablet like a torch) to some plain awful textures that would have been an insult on the Gamecube (take a closer look at a piano inside a big lobby when you play the game).

Of course, some games look great. My absolute favourite is ´Rayman Legends´, which is a stunner with wonderfully layered two-dimensional backgrounds scrolling fast at a rock-solid framerate, dozens and dozens of enemies on-screen and beautifully rendered particle effects. But, in general, the first wave of games will not wow anyone. Nintendo has clearly invested as little in the graphics hardware as possible to keep the price down without having to subsidise. But, Nintendo would have you believe once again, graphics are not everything.

What is only the more convincing, is the idea of asymmetrical gameplay. There are plenty of mini-games in NintendoLand, where one player has a bird’s eye view of a map and is on the run, with other players having only a third person’s view chasing him. Asymmetrical gameplay can just as well relate to mature games. ´ZombiU´ also makes innovative use of this feature, where one player becomes the Zombiemaster and can spawn various types of zombies on a map and another is the survivor who has to defeat them and capture the flag. This aspect of the Wii U is clearly the strongest argument to buy one and I expect Nintendo to market the console accordingly.

The idea of one privileged player within a group is reminiscent of a number of board and family games as well as pen and paper roleplaying games and the Wii U might enable those ideas to finally be incorporated into console gaming. This strength only relates to local multiplayer, of course. But it was local multiplayer that became the Wii’s killer app. The bottom line is that Nintendo is clearly making the point with the Wii U that gameplay outweighs graphics power.

Pricing and SKU strategy

Discussions about gameplay and graphics aside, I consider pricing the most important issue. A great console with great games can easily be priced out of the market and become a flop. Vice versa, a mediocre console can sell well at a budget price. Remember that the original GameBoy won against two far superior competitors, the Atari Lynx and the Sega GameGear, only on account of being cheaper and having a longer battery life. At any rate, the Wii U is fairly competitive in terms of its price tag. In 2006, the Wii launched at €250 / $250. The Wii U adds 50 bucks to that for the basic model and twice that for the premium bundle. It is more than I would have hoped for and a cheaper price tag would have practically guaranteed success, but neither the next PlayStation nor the next Xbox will be able to match that, for sure.

What I consider a huge mistake, though, is the strategy of selling two different models, so-called Stock Keeping Units or SKUs. Nintendo has never before opted for such a strategy and even frowned upon Microsoft and Sony for doing so, if I remember correctly, calling such a move confusing to consumers. The PlayStation3 launched with two SKUs in each territory which added up to at least five distinct models being available worldwide at the same time. From launching in 2006 up until now, Sony apparently released six different SKUs in North America alone.

In the case of the Xbox360, the original Core bundle was only ever meant to establish a low starting price for marketing purposes. It made no sense to buy it, since it came with no hard drive and no memory card, the latter cost at least $35, reducing the price gap to the premium bundle by more than a third. The basic Wii U bundle makes a little more sense, but only a little. No game is included which is a cost of around $70 / €70, which already exceeds the price difference between the basic and premium bundles. So, here too, Nintendo simply wanted to tout the Wii starting at 299, even though the vast majority will be opting for the premium bundle. Consumers which are less tech-savvy may even be confused. They cannot simply buy THE Wii U, but will have to choose which one they want. This, I am sure, is a question that can only put some of these people off.

Excuse me, which gen is this?

The media reception has been pretty good, though. With the Wii U, Nintendo received some fairly positive reception in the mainstream press. And it is clear that Nintendo insisted on the Wii U being the first next-gen console, since this crops up in many articles. Of course, some critics have already denied the Wii U the next-gen status. But it all boils down to definition. Remember that both Will Wright and American McGee called the Wii the only next-gen system for its innovation.

I personally define the generations the only way that makes sense, by mere count. Completely irrespective of what the console has to offer, this will be Nintendo’s sixth home console and it ushers in the eighth console generation. They could choose to bring no more than a calculator to maket. If they call it a home console, it is a successor to the current model and constitutes the next generation. It really is as simple as that. Who would have considered calling the PlayStation2 last-gen because it lacked the power of GameCube and Xbox?

Late to the party: competition not before 2014

And as far as competition within this new generation is concerned, Nintendo will not have any before late 2014. I am sure that Microsoft or Sony both cannot bring a console to market in 2013. Nor do they want to. They have lost billions with their current consoles. They will not want to burn any more money, before the current consoles have even started to earn them any profit, for a change. So the timing might play out well for Nintendo. The Wii U might not get any new competitors for two years, giving them a solid headstart. Being first worked for Microsoft this generation, at least for a few years. It might work for Nintendo now. In terms of pre-orders, the console was sold out in the US at Toys R Us, Best Buy and Target, only days after becoming available, according to Joystiq.

These figures are a pretty good sign, albeit an early one. The only downside to this strategy is that when the competitors do come out, they can be expected to be far more powerful, creating a similar situation as in this generation. The Wii U will not get any cross-platform titles, because it will not have the power to compete with the new PlayStation and new Xbox. It will have to get exclusives or nothing. By then, Nintendo hopes, the Wii U will already be a huge success, though.

Software: great third party support and Nintendo on a buying spree

The Wii U will have 23 launch titles in North America, which is a decent amount. And the third party support for Wii U is phenomenal in Nintendo terms. With ´ZombiU´, ´Rayman Legends´, ´Bayonetta 2´ and the new ´Monster Hunter´, there are some pretty nifty second and third party exclusives. But the Wii U gets also multi-platform titles like ´Darksiders 2´, ´Assassin’s Creed 3´, ´Call of Duty: Black Ops 2´ and ´Mass Effect 3´ at launch or within a launch window. However, I foresee a possible problem related to that. With the Wii, precisely those games never made it, for lack of hardware power. And that may have been an asset rather than a liability. Now that any PS3 and 360 game can be ported over, will the Wii U get enough third party exclusives? The Wii didn’t get ´Resident Evil 5´, but it got two exclusive rail-shooters in the series that were both great fun and made fill use of the unique hardware. Will the Wii U realy flourish as a console that will also have the next Resident Evil, like the other consoles, but will most likely go without an exclusive installment in the franchise? I have my doubts. With such original hardware, the Wii U relies on exclusives making good use of it. If there are not enough of these titles, there simply is no reason to buy a Wii U over a PS3 or 360. ´ZombiU´ is an extremely clever idea, because it incorporates the tablet screen distracting from the television into its gameplay and thus vindicates this hardware setup. But with cross-platform games, the tablet functionality may only have been hastily tacked on and offer a real distraction from the main screen. Then, the tablet would turn back from an asset into a liability.

While that is a valid concern for third party relations, Forbes is noting that Nintendo has changed its strategy and is widening its portfolio of first and second party studios. After recent acquisitions, both the ´Xenosaga´ and ´Fatal Frame´ franchises (the latter also being known as ´Project Zero´) now belong to Nintendo. Also, the ´Dragon Quest´ series is now, apparently, exclusive to Nintendo consoles.

Although the exclusivity deal on ´Bayonetta 2´ caused quite a negative backlash, people may hopefully realise that Nintendo saved the game from being cancelled and in doing so probably saved the developer Platinum Games in the process. The game will not become a huge seller for Nintendo, but they still chose to step in and save what undoubtedly is a hardcore game. This sends a clear signal to the industry and to gamers where this company is heading.

On top of that, Ubisoft, Capcom and Namco Bandai are “gravitating towards Nintendo”, the Forbes article notes and mentions the rumours of Nintendo wanting to buy back Rare in order to gain access to the ´Banjo Kazooie´ franchise. And let us not forget that Nintendo still owns the two best-selling videogame series of all time. So, software-wise, Nintendo is certainly doing well.

Don’t call it a gaming console: Meet Nintendo’s multimedia home entertainment system

Funnily enough, the Wii U seems to have the potential to become a better multimedia hub than Xbox360 and PS3. While Nintendo has always remained focused on their consoles being gaming devices first and foremost, the Wii U could beat Sony’s Microsoft’s efforts in multimedia functionality hands-down. The main reason is the TVii service, announced for North America. With it, users can compile all the different television content sources they have access to, ranging from their cable provider to services like Hulu, Netflix or YouTube.

Coupled with the built-in second screen, which is the biggest buzzword in television right now and a market still almost completely untapped, this may become the hottest feature of the console. If this feature will be available in other territories including similar deals with local content providers, the Wii U will definitely be a success. This is the killer app your television and computer have been waiting for. And while the content deals may not be exclusive, the competition will not be able to offer a similar service until 2014, if I am right.

Final thoughts

The media reception has been largely positive, both in the general and special interest magazines. And the week after the launch announcements, Nintendo shares rose five percent in one day. Within days, online preorders for both models were sold out with most retailers in the US. But all this is no guarantee of success. The biggest problems Nintendo might face is that of communicating the Wii U’s appeal. With the Wii, it was simple: Here is the controller. It looks like a television remote, so it is familiar. Here is Wii Sports and here is tennis. You know what to do. The Wii U, with its emphasis on asymmetric gameplay, is far more complicated and, as such, the gameplay experience nowhere near as self-explanatory. So, more than ever, good marketing will be the key to making the Wii U a success. Here, Nintendo needs to invest some, before they can earn some.

There are many aspects about the Wii U that make me quite optimistic. There are some that are highly questionable. But, all in all, I will say that I am cautiously optimistic about the console’s ability to become a hit and win the race for market domination once again. I am very interested in what you think, though, so please share your thoughts in the comments.

The beginning of the end: id, Bigpoint, THQ close mobile divisions

Renowned developing studio id Software (´Doom´, ´Quake´) is shuttering its mobile development, as are the publishers Bigpoint and THQ. The hype surrounding mobile games on smartphones and tablets seems to be coming to an end.

With only a few sentences, John Carmack revealed rather important news in his keynote speech at Quakecon a few days ago, namely that id Software was shuttering its mobile development division. Carmack said:

We did make the decision to close up our mobile development, which saddened me a lot, in that I love doing the mobile work — taking that time, spending a month, a year or something working on a mobile project, but we had some developers on there that we wanted to bring onto the Doom 4 project.

And it was looked at as something that; yes, this is fun, this is fun for the company and it's entertaining, it makes money, but it's not a grand slam sort of thing on there. The Bethesda family really is about swinging for the fences. I hope we do get back to mobile in various ways in the future, but the big real aim is blockbuster, AAA titles, and for id that means Doom 4, it means that we get the whole company behind that after we get Doom 3 the BFG Edition out the door, essentially everybody will be focussed on Doom 4 as a project.

Carmack was the first big name developer to pledge support to mobile platforms like iOS and perhaps the most vocal supporter of mobile development, first assigning a team of people to iOS development in 2007 and praising Apple for both iOS and their App Store.

Back in 2007, Carmack had noted:

We are operating on the assumption that mobile gaming has a potential for huge growth. (...) It's at a tipping point. Everybody has a phone, and almost every phone is powerful enough to do good games on it. (...)

The whole reason we are in the mobile arena now is I was just really appalled at how bad [mobile games] were. (...) We're already making profit on 2 million units of games sold, but we are kind of holding out this hope there might be a breakout moment when the industry gets five to 10 times larger.

Evidentally, this expected growth did not materialise. And other big companies are abandoning mobile development, too. Bigpoint is at the other end of the core-casual spectrum, but they are following id Software's example. Bigpoint CEO Heiko Hubertz told GamesIndustry.biz:

I'm a big believer in mobile, it's going to change many things in the games industry. But I also think it's not the right time at the moment to be in this market because to generate revenues in this market is very tough. (...)

For that reason we decided also to close our internal mobile games development. We will not continue to create mobile games internally. (...) We had around ten games in development, some of them are finished and will launch in the next few weeks but most of them will be completely closed and shut down.

Finally, financially troubled publisher THQ can no longer afford to be developing mobile games. In their most recent earnings conference call, the company's president Jason Rubin says (at around 16 minutes into the call):

We have (...) stopped develoment in certain areas that are not productive for our new strategy. Consistent with this vision, THQ has made a few changes to previously announced projects.

First, we made the determination not to pursue any future casual Facebook games. Second, we will not be publishing casual mobile games, including those with Innovative Leisure. (...)

By cancelling these explorations outside of our core business, we feel we can improve focus on our core game portfolio, which remains unchanged.

So publishers in financial trouble jettison mobile development because it is not profitable enough. But with id and Bigpoint, affluent developers are getting out of mobile development, too, both casual and core.

In my last post, I already rounded up some facts about developing for Android and iOS, which revealed how unprofitable it is for the majority of developers. Let me repeat the key facts.

It takes pot luck to have your game found in a sea of hundreds of thousand apps with extremely poor filter options on all mobile platforms. Most apps are never downloaded and studies claim that 29% of downloaded apps are only used once. 72% of apps are either free or just $0.99 (Apple's 30% take in the case of iOS not factored in).

Being successful in either the App Store or Google Play has been likened to a lottery, with more than half of developers not even breaking even (this figure is suspected to be perhaps as high as 90 percent). Even developers themselves are out to destroy some common myths about app success. For example, havin an app in the top 100 charts might mean you are making no more than $4 a day.

Some developers have already turned their back on platforms like Android because it simply is not profitable anymore. And with Trip Hawkins, the first industry veteran has left a previously hyped-up mobile games developer he founded himself.

So has the hype surrounding game development for smartphones and tablets given way to the realisation that these platforms really are not all too profitable? Undoubtedly, if you ask me.

´Ouya´ - a new game console and why it will fail

Details emerged yesterday about a new videogame console that may be in the works. The console called Ouya will apparently run Android and offer free games. It was discovered by The Verge through an entry on AngelList, a portal connecting start-ups to potential investors. The entry has since been removed, but the Google cache still exists.

The page notes a number of industry veterans as attached to the project. Founder and CEO is Julie Uhrman, "former IGN head of digital distribution." Peter Pham, co-founder/partner at Science” and of Photobucket and Color fame is an advisor. As is Yves Behar, ”founder chief designer fuseproject, CCO Jawbone”, who will design the console. Most prominently, Ed Fries, ”VP of Microsoft, Retired - co-founder of Xbox project”, is on board.

The project website’s Google cache outlines the Ouya console in surprisingly few words:

Open, accessible game console for the biggest market in games: TV.

Any developer can publish games, just like mobile or social games today (but like no other console game platform). Orders of magnitude less expensive to develop.

Inexpensive enough for every consumer to buy, $99, and all the games are free to play. Every console is a dev kit; build peripherals, root the system -- built to be hacked.

Designed by Yves Behar and fuseproject, creators of Jambox. Built with Android as embedded OS.

Apart from two product renders and an interface mockup, that is all the information there is. There is a dedicated product website at www.ouya.tv, but the anonymously registered site redirects to the Wikipedia entry on disruptive innovation.

Now, this all sounds pretty good at face value. But I believe such a project is sure to fail. First of all, industry veterans are no guarantee for success. It may sound impressive to have Ed Fries behind the Ouya. But many of you may still remember the ill-fated Phantom gaming console, which also had a former Xbox founder behind it, Kevin Bachus. The device never even came close to being sold.

But I would like to draw up another comparison, the Indrema L600. Not heard of it? I do not blame you. Indrema was meant to be a Linux console with the idea of nurturing a vibrant developer community, which would supply its own free games, alongside some boxed games which were to be sold. The project was spearheaded by John Gildred. Here is a kind of obituary:

Gildred founded Indrema in January 2000, when funding was easy to come by, and had a staff of 50 until recently. The first Indrema model, code-named the L600, was scheduled to ship this summer [article written in April 2001], months before Microsoft's Xbox. However, venture capitalists didn't like its chances against Xbox or Sony's PlayStation 2, even though Gildred's plan was to slowly roll out a grass roots campaign and grow from there.

Hundreds of independent developers were developing games for the platform, which was to launch with 30 games. The open-sourced system allowed for anyone with a computer to get the development kit for free online and create games for Indrema. Games were to have been distributed online and at retail.

So why did it all go under? Gildred spoke frankly about why the Indrema L600 failed.

A final decision has been made to terminate Indrema. This is the result of a long and thorough search for subsequent round funding, which has proven unsuccessfull. (...) There were many technical obstacles. We had a tough time with heat management, latency between processes, and of course, cost to build. (...) I can't discuss the money specifics, but we needed upwards of 10mil. (...)

Timing [is essential]. The capital markets are very difficult, and it takes money to build the box. I wish there was some work around to that problem, but not yet. I do see that more and more, it is becoming easier and cheaper to build an embedded prototype in your basement. I foresee much more activity that way. It will be interesting to see the progress over the next year.

Back then, there were also rumours that the big console manufacturers had done their part to discourage potential Indrema investors. Gildred officially denied this (”I don't think there was an agenda by the competition to kill interest in funding Indrema.”), but Microsoft, Sony and Nintendo certainly have some leverage over their third parties. Most importantly, Gildred had some advice for similar projects.

If I do a game console project in the future, I will make sure that the capital will be there for 3yrs. (…) My suggestion to the next startup, finish product before talking about it.

The people behind the Ouya console have certainly ignored this advice. What we have are a few sentences describing the product and some product renders.

Of course, these are different times. Back in 2000, investors would have reacted much more skeptical to the concept of free games. And while it is unclear from the sketchy details whether the Ouya will actually offer access to Google Play, Android has attracted a huge developer community and there are some casual titles worth our albeit brief attention. Also, a $99 price point for the hardware sounds rather attractive.

But why invest even that? What benefit would people get from buying the Ouya when they already have an Android smartphone running the same or similar games? What benefit would there be for developers to support the platform? What business model would be in place?

The incentives for developers to throw their weight behind a platform such as Android or iOS have been grossly overstated. Bear in mind that it is already a one-in-a-million shot to have your game found in a sea of hundreds of thousands with extremely poor filter options on all mobile platforms. Blogger and entrepeneur Hector Rodriguez rounded up a number of facts regarding app development.

The app stores are somewhat of a junkyard, already Apple’s app store and android market boast well north of 500,000 apps each. Most apps are never downloaded or ever used. Studies claim 29% of downloaded apps are only used once (I am anecdotal evidence of that).

There are over 200,000 developers in the app stores, way too many, a fertile campground for techie newbies and citizen developers. Not a market for the ‘respectable’ enterprise or application development (AD) teams.

+72% apps are either free or just $0.99, with an average price for non game-related apps of $2.22. On top, take off the “expensive” (sic) 30% take for apple and there is no self-respectable business that could grow beyond the anomaly of Zynga. App stores can not simply compete in dollar size with enterprise markets.

Being successful in either the App Store or Google Play has been likened to a lottery, with more than half of developers not even breaking even (this figure is suspected to be perhaps as high as 90 percent). Even developers themselves are out to destroy some common myths about app success. For example, havin an app in the top 100 charts might mean you are making no more than $4 a day.

Some developers have already turned their back on platforms like Android because it simply is not profitable anymore. And with Trip Hawkins, the first industry veteran has left a previously hyped-up mobile games developer he founded himself.

So, perhaps, things have not changed all that much since 2000. I am sure that we will next hear about the Ouya when we learn of the project being cancelled. This is sure to go the way of the Phantom and the Indrema L600. And do not get me started on the Pandora handheld. While it is still available on the market, the company hopes to sell 4.000 units in a few months. I suspect the GameBoy Advance outsells the Pandora. But at least they made it to market. I am sure the Ouya never will.

EDIT The Ouya console project has now appeared on Kickstarter with a target of 950.000 US-Dollar already surpassed with just under a months to go. Finally, there is the wealth of information needed to secure funding for such a project. There are details about the business model for developers ("developers can offer a free demo with a full-game upgrade, in-game items or powers, or ask you to subscribe" - essentially the standard ´freemium´ model), notable words of praise by prominent developers, tech specs (the console will feature a Tegra3 quad-core processor, 1GB RAM and 8GB of internal flash storage) and the commitment "to have a finished product ready to ship to you in March."

Here are the details about how far down the road the project is:

We have a functional prototype, and we have almost completed our industrial design (the shape and materials of the product you see here). We know the hardware specifications, and are working with electrical and mechanical engineers to test the performance of the hardware. We have begun work on the user interface and software. We’ll pull all these pieces together and test how they fit, while we finalize the product. (...)

With your help, we need to:

* Convert our prototype to production-ready models and get all the regulatory approvals (yeah, we need these to sell them)

* Deliver developer kits (for early developers so we can have games on day one, though every console will include an SDK once we launch)

* Place our first production orders (we are working with a manufacturing firm with lots of game hardware experience, but we need to know how many to make!)

* Ideally, fund some initial game development (i.e., 1st-party games)

The information provided is thorough, though perhaps not exhaustive. At any rate, above points of criticism and caution remain. Not a single game is promised at this stage ("It’s a little early to share a final roster.") Also, I do not yet see a viable business model for the company (or, indeed, for the investors). As far as the company is concerned, they are mimicking Apple ("We'll share revenue – you get 70 percent."). This will further segment app developers' attention by introducing yet another unreliable market likely based on pothole luck more than anything else (see above).

And as far as hardware is concerned, building a $99 device packing a Tegra3 quad-core chip does not reek of any profit. In fact, it sounds more like a subsidised console. Do not get me wrong, I wish them all the best. But I am still absolutely convinced that this project will be dead in the water by 2013. Just less than a million US-Dollars of funding sounds like a lot. But it is very little in the home console business. Companies like Microsoft, Sony or Nintendo have poured that money into their new consoles more than a hundred times over.

EDIT Former Microsoft executive and Xbox co-founder Ed Fries has responded to my article. Here is his statement and I agree wholeheartedly:

Hey Andreas. You are right that there is no guarantee this will succeed. With technology the hard part is often not the idea, but finding the right time for that idea. Compare ipad to the Apple Newton, for example. Even when the ipad shipped, many critics were very skeptical until it started to sell. Indrema may have had the right idea but they tried to launch it at a very different time. Think how many things have changed in the last dozen years. We now have (more or less) ubiquitous broadband for distribution. We have the cloud for storage. We have cheap commodity parts that can do 1080p at 60 fps. We have a strong and growing independent game development community. We have a "free to play" game design model. And finally we have a customer base that is becoming increasingly used to paying for and valuing digital goods.Whether all of these together will add up to enough to make OUYA successful remains to be seen but it's certainly an exciting new time to try this idea once again.

EDIT Developer American McGee (´Alice´, ´Bad Day L.A.´) has weighed in on the debate about the Ouya. Although the console is by now nearing $5 million in funding on Kickstarter with just over two weeks to go, he is as sceptical as myself, speaking to Game Informer.

Being based on the same chipset the major tablet/phone makers are cramming into their lineup of existing/future mobile devices it would seem the major benefit is the included console controller. But device makers are ramping-up production on “console” controllers for iOS and Android (with OS support for both coming soon). This brings me back to my original question about the long-term viability of traditional consoles – why would I want my gaming content tethered to a TV and stuck in my living room?

Current-gen Tegra-powered tablets can be plugged into a big-screen display/7.1 audio setup via HDMI (and connected to a 360-style bluetooth gaming controller). The difference with Ouya is what? That it doesn’t have a built-in display and can’t be taken on the bus? Not sure I get it, but then again I might be missing something.

Breaking: Sony buys Gaikai

Breaking news: Sony has just acquired the videogame streaming service Gaikai, according to Venture Beat. The link was just forwarded by Gaikai CEO David Perry himself, who had previously founded Shiny Entertainment (Earthworm Jim, MDK, Sacrifice). The big question is how this acquisition might affect Sony's plans for the next PlayStation. More as this story develops.

EDIT Here is the official press release from Sony Comnputer Entertainment, verifying that it is actually the PlayStation business making the acquisition, not Sony Corp. as a whole. The press release reads that "through the acquisition, SCE will establish a new cloud service, ensuring that it continues to provide users with truly innovative and immersive interactive entertainment experiences."

No more Gamescom beyond 2012, newspaper speculates

This year's gamescom may be the last, according to an article in Germany's biggest newspaper, the tabloid Bild.

The Gamescom, the world's biggest computer and videogame expo by visitor count, has been incurring losses in excess of half a million Euro and is under review, the article claims, which goes on to conclude that the event "failed" and has "flopped". The Gamescom has replaced the Games Convention, which was held in Leipzig, and the article was published in the paper's local Leipzig section. So a degree of exaggeration must be factored in. Also, the newspaper itself - perhaps comparable to USA Today or The Sun - is the subject of some controversy. Here is a translation of the article.

Cologne fails with stolen games fair

Leipzig - In 2009, the computergame fair "Games Convention" moved to Cologne with much fanfare but against the wishes of many exhibitors. Since then, it is known as the "Gamescom" - and has been incurring high losses. Now the stolen expo may even be scrapped altogether.

The reason is an internal review which describes the expo as a "debt-incurring venture." The paper notes a minus of 565.000 Euro for the fair - and advises "to review the strategic necessity of the loss-making event." Even if fair spokesman Franko Fischer says: "The 'Gamescom' exceeds our expectations with positive gross margins."

That may be. But in Cologne, every event is offset against the high rent, which the fair has to pay for its halls. And here, the "Gamescom" has run up a minus of more than half a million Euro.

And Cologne has further problems: Off-the-record, exhibitors are complaining about the high costs (rental fees, accomodation). Also, the industry giants Microsoft, Nintendo, Sega and THQ have already withdrawn from "Gamescom" 2012...

I was able to bring you the exclusive news of Microsoft being a no-show this year, alongside Nintendo, Sega and THQ who cancelled earlier. Also, Sony threatened to cancel and may have received a significant discount to commit to the show after all. Bear in mind that each of the concerned publishers is one of only thirteen members of the German industry association, which made the decision to move to Cologne in the first place. So, it could well be that the association is going to officially withdraw their support for the gamescom after 2012.

As unfortunate as this development is for the industry at large, the Gamescom is indeed facing a potentially fatal crisis.

Dissecting the Xbox720 leak

A document has surfaced that may be a detailed feature overview for the next Xbox as well as a road map for future updates. On 56 pages, the document – marked “confidential – for discussion purposes only” – details the next generation of Kinect, as well as AR goggles that allow the game to take place all around the living room.

The information first appeared on Nukezilla pretty much without anyone noticing it and the entire document has now surfaced on
Scribd. It appears that the document dates back to 2010. It has since been removed from the website, apparently at the request of a law firm working for Microsoft.

The next Xbox, according to the document, would ship with a Blu-ray drive and a new version of Kinect. The latter would be only a marginal evolution of the current technology. The console would launch in 2013 for $299. Key hardware features would be “licensable architecture (both for incoming and outgoing licensing)” and “support for alternate form factors / devices with different total system feature set”, which might mean that other hardware manufacturers like Dell or Samsung may build their own Xbox compatible console or include the hardware in other devices like television sets, much like the 3DO back in the day.

Another feature noted is this: “split application/system resources: allows title compatibility through cost reductions and different device types.” This might suggest that the console can stream content to mobile and other devices: “Take your entertainment everywhere. Start on one screen but instantly pause and play it again from any other device makes it best way to enjoy your TV, movies and music when you’re on the go.”

Streaming content might refer not just to games but a “TV App” as well as an “XTV Pay TV Service” which are said to launch already on the Xbox360 in 2011 and 2012, respectively. For the next Xbox, more content would be synchronized across various devices: “Use your phone, slate or PC to enhance primary game play or learn more about what you’re watching on TV. Start watching on any screen - pause - resume on another.”

Yet another feature would be a “modular design to facilitate SKU updates later in lifecycle”. Such a console could be expanded in the same way the N64 had an expansion slot for more memory. In fact, the document describes the idea that such a modular design, coupled with the launch of a cloud solution in 2015, would make successor consoles obsolete. You would “never need to upgrade hardware again.” Confusing in this context are remarks about a proposed 10 year life cycle for the console.

In 2012, a “new haptic controller” is set to launch for Xbox360 so users can “control your TV experiences via gesture, voice and touch.” But for the next Xbox, Microsoft seems to have a real controller revolution in store. The document describes augmented reality glasses, dubbed “Kinect Glasses” or “Fortaleza” after a Microsoft Innovation Center near that location in Brazil. These glasses would probably be comparable to Google’s Project Glass and launch in 2014, one year after the new console. These glasses would not be a mere Xbox peripheral but a device in its own right that would feature Xbox compatibility.

Baffling is the reference to “9/24” in both the file name (“XBox-720-9-24-Checkpoint-Draft-1”) and a headline (“9/24 Agenda”). It is a fair assumption that it refers to the date September 24th. But it is not clear which year is meant, nor what event would have taken place at that date or, indeed, will.

So much for the details. Let us now consider the authenticity of the document. There are a number of options here. Firstly, the document may constitute Microsoft’s genuine plan for its next console in every detail. In this case, the ideas detailed here would all still be valid and could be expected. Then again, it might be a complete fake, rendering all the information useless. There are a number of options in between, though. As a cynic, the leak might have been deliberate to steal Nintendo's Wii U thunder. This is not likely, but still a possibility to consider. Alternatively, the document might have been only one of a larger number of papers with ideas for the next Xbox that were meant for nothing more than a brainstorming session. As such, they might contain some authentic information, but would consist largely of one of many engineers’ ideas of where a new Microsoft console might go. The disclaimer found on the document (“for discussion purposes only”), as well as the somewhat sketchy drawings may support this theory. Also, the document begins by mapping out a methodology, whereby a tentpole idea such as “Kinect, cloud rendering, glasses” leads to various signature experiences on behalf of the user, each requiring hardware, content and an adequate platform. Outlining such a methodology suggests a more academic and perhaps more hypothetical approach.

As far as the actual content is concerned, there is nothing I find totally unrealistic. The Kinect glasses are a very ambitious project and I am unsure whether such a product (by Google, Microsoft or anyone else) would be ready within the next few years. Also, I doubt that Microsoft will be able to launch a new console in 2013. The regular cycle was to introduce a home console in one year and launch it in the year after. But these are marginal disagreements.

Altogether, the sheer volume of 56 pages would make this a very elaborate fake, if it were one. The images and overall layout appear to me too good for a fake but not good enough for a final presentation. The document is a draft, after all, as the file name suggests. So I do believe the document is real but I am sure it was used in only one of a number of presentations that were largely hypothetical. So we should not treat its details as something Microsoft is actually planning to bring to market but rather as something that was considered at one point but might never make it to store shelves.

The end of E3

E3 has just ended but are we witnessing the end of E3? This post would have been about all the exciting news from the world’s most important industry trade show. But there is not much to write about. In fact, we are left with a feeling that the E3 did not live up to our expectations, right? The press briefings of the big three certainly contained no major announcements, it is fair to say. Nintendo revealed Pikmin 3, but this was expected. There were no huge surprises as far as Wii U software was concerned. Most titles like Darksiders II or Assassin’s Creed III had been announced previously. And, most blatantly, Nintendo managed to keep both launch date and price of the console to itself. Also, no new hardware iteration of the 3DS was officially announced, although we know that one is coming. It is obvious that Nintendo plans to make those announcements in its own time, in the form of a “proprietary” briefing, if you will.



In fact, it was Nintendo’s deliberate strategy to distract from the E3 press briefing and add other communication channels. A video showing Nintendo president Iwata go into some detail of the Wii U was released only two days ahead of the E3 press briefing. And at that briefing, NOA president Fils-Aime said that there simply was not enough time for all the information Nintendo wanted to convey.

This strategy is not new. Just remember how Nintendo first announced 3DS and Wii U. Both consoles were not revealed at E3, but in investors notes. Nintendo has also famously pulled out of this year’s gamescom in Cologne, Germany’s new industry trade show. And for years, they have not been an exhibitor at the Tokyo Game Show. Here is a company that has enough money to spend and has a major new product to market. Yet they do not deem gamescom or the TGS to be appropriate venues for this endeavour. The Tokyo Game Show has almost unanimously lost appeal. My esteemed colleague Memo produced a documentary (in German) about this very problem last year.

What about Microsoft and Sony? Were their E3 press conferences any more interesting? Hardly. As I had expected, no successors to Xbox360 and PlayStation3 were announced. But also no new software titles were shown that would have taken us by surprise. But are the two companies also pursuing Nintendo’s strategy of actively withholding important news from E3, in order to release them at a later date? Maybe not. Perhaps there simply are no more exciting news about these consoles at the end of their life cycles.

Yet at the very least, Sony is also reconsidering trade shows like the E3 as a venue for big announcements. In 2009, they announced the slim version of its PlayStation3 console at the first gamescom, instead of at E3, clearly experimenting with the time and place of such announcements. The PS Vita was first announced at Sony’s own event in January 2011. And, most importantly of all, Sony even considered cancelling this year’s showing at the gamescom. They reconsidered only days ago, at the last second, likely to due financial concessions made by the organisers. But it is clear that to Sony and Nintendo, E3 and other trade shows matter less and less.

EA booth at gamescom 2009, taken by Raimond Spekking, through Wikimedia

As far as the third console manufacturer is concerned, I have heard reliable rumours that there are indications of Microsoft also thinking about cancelling their appearance at the gamescom. Sony’s case shows that it is possible to not yet be fully committed to having a booth in just over two months. And, apparently, Microsoft has not yet confirmed their hotel bookings. A press release by the organisers today (in German) details all the companies that have a confirmed presence at the gamescom. Microsoft is not listed, nor are Activision, Square Enix or Warner. Previously, Sega and THQ had announced that they will not have booths at this year’s show because of financial constraints.

There was a time, when the E3 press conferences were the obvious venue for the three hardware manufacturers to make major announcements. This is no longer the case, it seems. In fact, we seem to be witnessing the beginning of the end of big industry trade shows at large. It appears that, at least to Nintendo and Sony, choosing both the time and setting of major announcements is a compelling factor. But there is another factor here. It is clear that companies like Nintendo are mimicking Apple, who, despite their iPhone being one of the most popular smartphones, have never appeared at the Mobile World Congress in Barcelona and famously were a no-show at events like the MacWorld, even though it exclusively revolved around their products. Apple’s continued success certainly vindicates this strategy and videogame companies appear keen to emulate both.

Gamescom 2009, taken by D-Kuru, through Wikimedia.

So what will happen in the long run? For the next few years, the big videogame trade shows will continue to exist, but they are sure to diminish in size. They will no longer be the priority event, at which the hardware manufacturers and third party publishers announce their big news. And it will no longer be a matter of course to expect all important companies to exhibit at shows like the E3. In fact, I am willing to bet money on the fact that for E3 2013, a number of the top ten publishers will not be present.

EDIT My sources were right. Microsoft's Larry Hryb aka Major Nelson confirmed yesterday that the company will not attend gamescom 2012.

As you saw at E3, we have a solid line-up of games launching this holiday, along with other entertainment experiences. We’ve changed our approach a little, though. This year, Xbox will be focusing on smaller, more localized promotions and experiences for press, partners, retailers and customers around the world. Which means that as you might have seen on some of the news sites today, we won’t be taking part in gamescom or Tokyo Games Show this year.

Both are still important shows for the industry, and we do wish the organizers well.

The gamescom is organised by the German Trade Association of Interactive Entertainment Software (BIU) (and yes, that is me on the right there). The BIU consists of the thirteen biggest publishers, of which four will not attend gamescom 2012 so far. Two more members, Activision and Warner, have yet to confirm their presence. As sad as it is, the gamescom is in serious trouble.

Wii U to become hardware beast, feature Steam?

A quick post to update you on most interesting rumours regarding the Wii U. If true, the Wii U will become quite a hardware beast, sport unbelievable third party collaborations and, consequently, cost more than expected.

The rumours originate from an Italian website citing a source within Ubisoft Milan and were translated by Übergizmo.

To summarise, the rumours state:

* Launch date: November, 23rd
* Price: $350-$450
* RAM: 2GB, with 560MB dedicated to the operating system
* GPU: AMD Radeon HD 6770
* DirectX 11 support
* Crytek, EA and Valve working on games
* Valve supplying digital distribution platform and Portal port

These specs and details are quite surprising, to say the least. In fact, they may border the unbelievable. Valve supporting the Wii U with what would have to be the first console port of Steam would be a system-selling feature that would leave Microsoft and Sony out in the cold, whenever they release their next-gen consoles.

In my mind, now would be a good time to buy Nintendo shares anyway (in fact, I recently have). If these rumours turn out to be true, you should be able to double your money before the year is out. But I am really sceptical.

EDIT It appears that the forum poster has admitted to making the whole thing up. Thanks to Obiettivo Sbloccato for the heads-up.

´Call of Duty Elite´ interview

One week before our next installment of my new show about competitive gaming, FTW - For the Win, you can watch my interview with Noah Heller from Beachhead Studios and Mark Cox from Activision in full right here.

´Call of Duty Elite´ is meant to be a social community for Call of Duty players where they can connect, improve their skills, compare statistics and get in-depth information about pretty much every detail of the game. The service is split into a free part and a premium one. Clearly, Activision wants ´Call of Duty´ to play a bigger role in competitive gaming.

Heller and Cox are naturally excited about the platform. But I notice a growing trend towards social communities built around games. Soon, there will be an abundance of such networks, with Crytek launching GFACE, Zynga pushing its own Facebook-clone, the German-based Travian Games launching MYGAME and Azubu already on the market. Consolidation is inevitable.

Also, many experts are skeptical whether ´Call of Duty´ can become relevant in eSports. There is more to it than throwing lots of money at it by hosting a competitive event such as XP late last year, where the winning team walked away with a million Dollars. After all, last year saw ´Brink´ being marketed as the new ´Counter-Strike´ and where is that title today? There is lots to talk about, so watch my interview right here and leave me some feedback in the comments, if you will.

Wii U less powerful than Xbox360 and PS3?

Nintendo’s next generation console, the Wii U, may not even be on par with the hardware power of the company’s current-gen competitors, the Xbox360 and the PS3, according to some developers. In the meantime, president of Gearbox Software, Randy Pitchford, has praised the Wii U as “a really nice bridge to the next generation.” The four anonymous developers critical of the system are said to have access to development kits and have spoken anonymously to GamesIndustry.

"No, it's not up to the same level as the PS3 or the 360. (…) The graphics are just not as powerful."(…) "Yeah, that's true. It doesn't produce graphics as well as the PS3 or the 360. (…) There aren't as many shaders, it's not as capable. Sure, some things are better, mostly as a result of it being a more modern design. But overall the Wii U just can't quite keep up."

Two other sources questioned whether the Wii U’s tablet controller would be the big innovation Nintendo is hoping it will be and whether a combination of PS3 and PlayStation Vita may not be the better choice, offering a similar hardware setup.

"You can do everything with that combo that you can with the Wii U, and more." (…) "The whole thing about the tablet controller is that you only get one of them, and you can only use one and it's not completely independent. (…) The base console has to be on, and you have to be in range. (…) Other controllers are just Wiimotes, or other Wii controllers. They may change the form factor or looks a bit, but it's the same controller."

Randy Pitchford, president of Gearbox Software, praised the platform in an interview with Joystiq. After all, his studio is developing ´Aliens: Colonial Marines´ for the Wii U.

"I think it's a great platform and I'm really excited about it, particularly with this game, there's a lot of exciting opportunities like, 'Wow, my motion tracker is there, and I can move it like this!' (…) There's just so much cool stuff. (…) There's a lot that we can do with that screen (…) It's a really cool system -- it's pretty powerful. I want to be careful, because I don't want to risk any sensitive information that Nintendo's not ready to share yet, but in our experience it's a great system. I think it's a really nice bridge to the next generation.”

It is interesting to note that he refused to call the Wii U a next generation system. This may tie in with the anonymous comments above. However, Pitchford seemed to suggest that Nintendo had yet to announce what the Wii U is capable of and repeated that point.

"Nintendo still has a lot to announce with their platform, and it's not up to us to go ahead of them. (…) I think people will be surprised. I don't know off the top of my head how many of the specs they've released, so I want to be very careful not to jump the gun, but we're very pleased with the hardware. And even since they gave us our first alpha kit, our very first 'pre-prototype' development hardware that they kind of let us play around with, they've done so many things to make the platform better. So it's getting better for us as developers."

These comments are reminiscent of the Wii’s long-rumoured last secret, a surprising feature the Wii was supposed to possess. However, no such secret ever materialised. The rumours were either wrong or the last secret was canned at the last minute, similarly to the Gamecube’s proprietary 3D-screen.

So, will the Wii U outshine Xbox360 and PS3 or not? Remember that I was able to bring you the exclusive news that the Wii would be significantly underpowered compared to the competition. And already with the Gamecube from the previous hardware generation, Nintendo seemed to have withdrawn from the race for hardware power, leaving the most powerful console to Microsoft and its Xbox. But, in my mind, no console has ever offered less power than the previous generation and such a scenario is hardly likely. Xbox360 and PS3 are six years old and the bill of materials for their hardware components must have come down to less than $100. So can we not assume that the Wii U must be a more powerful machine? Is it not obvious? The first Wii U hands-on impressions seemed to suggest so.

The answer may lie in the console’s tablet controller and pricing. The tablet controller may turn out to be the most expensive component and Nintendo may again aim for a low price point. In fact, I was able to reveal that Nintendo considered selling the Wii for a mere $100, a fact that was later confirmed by Miyamoto himself. Should Nintendo really want to implement such a strategy with the Wii U, the hardware could only be a small step up from the Wii. Technologies like cloud gaming may become a threat in the future and other devices such as smartphones and tablets are said to be already eating into the market share of traditional consoles. Overstated as this point may be, the GamesIndustry article points out that the retail market for console hardware and software has fallen by eight percent last year in both the US and Japan. So Nintendo may be well advised to launch the Wii U at a bargain price.

Or does Nintendo simply believe that Microsoft and Sony will not be able to release new consoles before 2014 at the earliest? This strategy appears riskier, but there is certainly reason to believe that the competition will want to drag out the lifecycle of their current hardware. After all, both companies have poured billions into their console divisions and, in the absence of recent numbers, both consoles still cannot be anywhere near profitability. This is a point usually ignored by gamers and industry observers alike. The key factors to a console’s success are hardware sales, the software to hardware tie ratio and the profitability of the hardware. In the last generation, for example, Nintendo is widely believed to have been the big loser. But the Gamecube brought in money from day one. It sold almost as many units as the Xbox, which at least initially was heavily subsidized. So Nintendo made money while the original Xbox left Microsoft a few billion Dollars short.

So, while industry analysts see ”increasingly problematic structural problems” for the Wii U, it is important to bear in mind that Nintendo have relatively little to worry about. They have almost always been able to push their consoles into profitable territory. And they own the biggest gaming franchises in the world. The Wii U may not become the hardware beast the next PlayStation and Xbox may become, but will that matter? After all, the Wii is clearly the runaway success and winner of this generation. And, in my mind, should the Wii U really not be capable of outperforming both Xbox360 and PS3, a price point of between $100 and $150 will have to make up for that.

EDIT Website Forget The Box has added details to the Wii U Hardware, citing anonymous Nintendo sources. The bill of materials is said to come to around $180 in total, $50 of which make up the tablet controller. Nintendo is apparently considering a launch price of "no less than $300."

According to our sources: “Cutting production costs to maximize profits is Nintendo’s main concern with the Wii U. They are cutting costs in the Wii U’s hardware to build back confidence in investors. Nintendo wants investors to view Wii U as a less risky proposition. ”

The new NFC capabilities for each new Wii U controller costs no more than $5 to implement, and the prices of NFC implementation in mobile devices is expected to fall below $1 in the near future. Our source explained: “NFC capabilities are a drop in the bucket for Nintendo. As NFC becomes more mainstream in mobile devices, the price for NFC implementation will rapidly decline. Nintendo is jumping on NFC because of a projected cost decline in the technology.”

When we asked about the controller’s other manufacturing costs:

“The cameras in the Wii U controller are an estimated manufacturing cost of $6. They are slightly better quality than the 3DS and DSi cameras. The touch screen has a manufacturing cost estimated at $14.” (...)

“Nintendo chose an economical GPU and CPU that could keep up with the performance of today’s current consoles, but keep hardware costs down to maximize profits. Nintendo got a bargain price on the custom GPU and CPU that the Wii U uses. There is a bigger focus on downloadable content, applications, video content, digital distribution, and services to create a stream of revenue. Investors will be ecstatic with the news.”

While the website is unknown to me, they do report about the videogame industry regularly. Only in January, Forget The Box reported about the Wii U's alleged eReader functionality. This does not necessarily make the website more credible, but may be an indication of the authors having genuine inside sources. The rumours certainly tie in with the above statements about the console. If true, a bill of materials around $130 for the console by itself would suggest modest hardware power. But it would certainly suggest that the console is more powerful than the Xbox360 and the PS3.

EDIT Tech video blogger Richard Masucci from ReviewTechUSA has posted an elaborate run-down of the known Wii U tech specs, comparing them with the Xbox360 and PS3 (thanks, Anonymous). In it, he concludes that the above rumours by anonymous developers are "a big pile of crap", pointing among other things to the Wii U's multithreading ability and generous L3 cache. The Wii U CPU will be able to "handle 16 threads of code simultaneously", while the Xbox360 and PS3 can only handle six. Masucci concludes:

"Even if the Wii U only uses the entry level quad-core Power 7 processor, its capabilities destroy the Cell processor hands-down. (...) It would be a moronic business move and almost impossible for Nintendo to make the Wii U less powerful than the current generation consoles. I mean, hell, if Nintendo went to nVidia and asked them to use the 8800 GT which is now a five year old GPU, it would still blow away the graphics processors that are in the Xbox360 and PlayStation3 - and it's five years old and costs next to nothing now."

In another video, Masucci compares the Wii U tech specs with what is known about the PlayStation4. Even here, the Wii U measures up, provided that Sony puts something along the lines of an AMD Radeon HD 7670 in the console, Masucci says. Should Sony go all out on the PS4 and use an AMD Radeon HD 7950 with Nintendo choosing a 4850 or 4770 as the Wii U's GPU, Nintendo will be left behind in terms of graphics power pretty much the way they are in the current generation. However, bear in mind that the Vita has not been a great step up from the PSP and that Sony is in dire financial trouble right now. They might not have the muscle to put out another PlayStation3. And remember the lessons learned from releasing such a costly hardware beast.

Microsoft patented display helmet

Microsoft has patented a display helmet, eerily reminiscent of the Nintendo On fake.

Analysed thoroughly by Patent Bolt, the helmet may be used both to augment reality in the style of a heads-up display (HUD), as well as project stereoscopic 3D images.

I do not think that this device will ever see the light of day, since it is now common belief that most consumers do not want wearable accessories, particularly not head gear. What I do still believe, though, is that we may see proprietary displays for home consoles. Sony's 3D display is an example already available on the market.

And years ago, there was proof that a Japanese gaming company had invested in 3D projection technology. A venture that has yet to be go public. And Nintendo experimented with a proprietary 3D screen for the GameCube which was practically ready to hit markets.

With new competition in the form of streaming platforms, tablets and smartphones (although horribly overstated) forcing gaming consoles to offer unique features, such proprietary screens may be just what the doctor ordered.

´FTW - For the Win´ live chat and show

Right, people. This is it. Starting at 11:15pm CET (3:15 PM PDT / 6:15 PM EDT / 7:15 AM JST), we will be broadcasting a really phenomenal Counter-Strike 1.6. final match in the Intel Extreme Masters series, season 2011 / 2012. You can watch it on ZDFkultur on your tv set (where available), via our own network's streaming service and you can join our live chat.  

I will be online until well after the show, so be sure to log in. You will see ESC Icy Box battle against Natus Vincere aka NaVi. Believe me, it will be worth it.

´FTW - For the Win´ continues

Once again, it has been far too long since my last post. But, once again, some good news are the reason for me having been extremely busy. My television network has just announced that FTW – For the Win, the videogame program I helped design, will become a series in 2012.

FTW is about competitive gaming and broadcasts eSport matches in full length, currently from both the ESL’s Pro Series and Intel Extreme Masters, alongside interviews and items about the subject.

This year, we will cover seven events with an output of three hours each, starting with the IEM finals taking place at the CeBIT computer fair in Hannover this week. FTW – For the Win will show the Counter-Strike 1.6 final late next Monday and the StarCraft II and League of Legends finals the Saturday after. Here are the viewing times:

FTW – For the Win
Monday, March 12th, 11:15pm – 0:15am
Counter-Strike 1.6 final

Saturday, March 17th, 2pm – 4pm
StarCraft II & League of Legends finals

We will also be updating you in German via our blog http://ftw.zdf.de, where I will obviously be posting a little more frequently than here for the time being. And, naturally, you will be able to see all of the shows via my network’s streaming portal, the ZDF Mediathek under http://mediathek.zdf.de (just search for FTW), where you can still find the pilot we aired from the gamescom in August, featuring a talk with Richard Garriott.

Of course, we will be going back to gamescom in 2012. Later in the year, we will also be covering events as far away as Guangzhou and New York City. And we will bring you news and reviews concerning online, multiplayer and AAA games.

So you see: great news. And I will try to translate some of the content I write for the FTW blog and post it here. And by the way, does anyone still care for the Nibris article? If ten people request it in the comments, it will become my number one priority once the current shows are through.

Gaikai remarks about next-gen consoles exaggerated beyond reason

Welcome back to my blog and welcome to 2012, a most interesting year in gaming. The year starts with the rumour that Sony or Microsoft will not compete in the next console generation and presumably leave the hardware market altogether.

An article by IndustryGamers cites comments made in a panel on the future of consoles.

Speaking during CES (...), Nanea Reeves, chief product officer for Gaikai, predicted, "Not all of the current console makers will have one more generation. That will be the big news at E3."

Reeves' comments can be understood better in the context of the entire session:

“Are we all in agreement that there will be a PS4 and there'll be an Xbox 720? And/or when is the console dead?” [panel host Mike] Vorhaus asked the panel. (...)

“I think some will have one more cycle and I think others will not,” said Reeves. “I think that will be the big news at E3. That's just my prediction.” “That's a very newsworthy opinion,” said Vorhaus. “Which of the three people are not going to have a next console?” “I'm not going to say which one, but I will predict that there will be one.” said Reeves. (...)

The panel ended with a provocative question: What will be the biggest surprises coming up for 2012? (...) Nanea Reeves, Gaikai: “I will go with the previous comment. I think one console will opt out of the next gen.” (...)

Mike Vorhaus, Magid Advisors: “I think Nintendo will be the one to do what you are suggesting [opt out of the next gen].”

I am very surprised that these comments have been spun into so many news stories, assuming Reeves has actual first-hand knowledge of either Microsoft or Sony bowing out of the hardware race. I am certain she doesn't. I called them up and they refused to elaborate on the story. It is clear, though, that they enjoy all the press coverage.

Ask yourself: Who is making these comments? Gaikai has a vested interest in talking up the death of gaming consoles - and understandably so. Steve Perlman, CEO of Gaikai's rival OnLive, told me in an interview in 2010 that this (meaning Wii, PS3 and Xbox360) was "probably the last generation." This is not news, this is PR. This is like Mercedes spreading rumours that the Japanese car industry is in big trouble.

Also, such comments are meant to be overstated. I have hosted a number of such panels myself and the point is to get the participants to make exaggerated statements which news outlets pick up on and which the community can discuss.

Besides, if any company really were to leave the hardware market they would not formally announce it at E3, because that would blatantly hurt their current-gen sales and third-party relations. They would refuse to comment for as long as possible.

So, rest assured that these comments are not worth your attention. Microsoft and Sony may, indeed, opt out of the hardware race. But Gaikai would not know about it any sooner than us. And, in my mind, we will eventually see another PlayStation and another Xbox competing with the Wii U.