Evolved games market has stumped next-gen console plans

Alex St John has told GamesIndustry.biz that he believes the reason Microsoft and Sony haven't announced a new generation of consoles is because it's no longer clear what they can do to improve on the systems they are already offering.

The former executive at Microsoft and WildTanget, and now president of social games business hi5, said that the Wii proves that high-tech consoles aren't the next step in home entertainment, and cheaper social gaming via the web has left manufacturers in a niche market.

"This is usually when you announce [consoles]. It's 2010. No rumours either. There's two reasons for delaying. The reason for the delay is the reason I'm right," said the out-spoken executive.

"I love 3D, but that revolution is over. People academically say there's always room for more realism. But actually there isn't. There's diminishing returning for better graphics. People don't see more realism even if you give it to them. Once that's happened, games have to be differentiated for a different reason. You can't do more 3D than you've got. So what's happened is that differentiation is happening by community, multiplayer, social dynamics.

"When they rationalise making a new console, they're thinking the most successful console was the one with the crappiest 3D – the Wii. The cheap-assed 3D console, that's the one that beat everybody. The 3D didn't matter – it was a new input device, and Xbox Live." He added: "Coming third is Sony with the best 3D – oops."

"So they're sitting over there at Sony and Microsoft right now – I don't know that but I can hear them thinking, 'what the hell do we do? The ones we're shipping are finally profitable – we'll never recoup the losses for the 3D we invested in these consoles, we don't want to do that again. This online world is changing so fast we have no idea how to control it or how to participate in it. You know that Wii thing is neat, let's try some of that'.

"You can't spent $2 billion inventing a new console when you don't know what it's going to do," he added. "The only thing you know is the thing that you used to do is wrong. There was a time when the future wasn't blurry – it was clear what you had to do – it's not that way any more."

St John said that Microsoft had made a mistake in continuing to chase the dream of its technology being the centre piece of the living room – a goal he points out the company has had since the 1990s.

"When I was at Microsoft, Bill Gates wanted to get into the living room. I was in meetings with Gates and I'd go, 'I don't want to piss you off, because I know you've already lost a billion dollars on stupid web TV ideas – no offence, I know you can fire me – but the Japanese walked into your living rooms the entire time you were sat here scratching your heads, with games.

"Now what are they doing now they are in the living room? It wasn't easy but they got there. And what are they saying now they're in the living room? 'We're going to stream music and video'. You idiots! Do you ever learn? You morons - don't touch video with a stick, be focused – that's why you finally got to the living room, with games." In the time it takes for the future to become clearer, which he predicts will be in around five years, St John said one thing is certain: "Games are just made out of electrons and people have very powerful personal computers and growing internet connections. This idea of a living room is dying. Everyone is carrying a screen around with them constantly, they've got them everywhere, 3D chips are a commodity – once you have that, I think that maybe the living room just dissipated," he said.

More insight from the Game Developers Conference can be read in our updated feature here. St John is set to host a session on Hi5 at GDC today (Wednesday), at which he'll announce new plans for the company.