Game console shipments have declined 30 percent year over year for the first half of 2012 bringing with it the eventual demise of the game console. As cloud computing and broadband access becomes universal owning a console will not be necessary.
In the meantime, the hope is the new Nintendo Wii U will breathe some life into the increasingly dwindling market. The Wii has performed the same feet in the past and it seems as if it is up to the task again because early online orders have been selling out in record time.
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The Wii U will go on sale on November 18th with prices starting at $299.99. It will be the only new generation console available this season and the timing will end up helping the company get market shares from people who don’t have a console, but don’t want to buy an older generation console. In order to compete with the Wii U Sony, Microsoft (News - Alert) will have to lower their prices to entice new customers.
Sony is expected to reduce the $249.99 price for the Playstation 3 by $50 while Microsoft will leave the $200.00 price tag (News - Alert) unchanged but instead make bundle offers with games and other peripherals.
The total spending for the month of August 2012 was around $989 million with a decrease of 39.4 percent for hardware and a decrease of 9.2 percent for software. The slowdown in sales is attributed to the increasing number of users who are making the transition from physical platforms to digital. The top selling console was the Microsoft Xbox 360 for the 18th straight month.
As the digital transition continues to grow the gaming industry has to introduce new products to challenge the gaming environment. The recent application of an immersive gaming system patent by Microsoft is one way to ensure hardware will be an essential aspect of gaming.
The transition will also keep games alive longer because they will be cheaper to create. Once the manufacturing cost associated with physical games is eliminated, more resources can be devoted to the continuation of existing games and the creation of new ones.
Another factor in the decline of console sales is mobile devices such as smartphones and tablets which have increasingly been used for gaming. Many designers are creating and adapting games for those platforms because more people have those devices than game consoles.
The Wii U will do very well according to early preorders, but current gaming companies have to start embracing future technologies before they become obsolete like the Atari.
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Edited by Brooke Neuman