2014's Worst Events for Console Video Games

Bryan Cashman is the founder of Callvention, a service enabling phonecalls with game developers.

We already talked about how great a digital year 2014 will be for video games, but there are still plenty of issues to keep video game console manufacturer executives up at night.

Below are four events that could go horribly wrong in the video game industry, marking 2014 as a turning point where some businesses go very sour.

The new consoles stop selling

The new consoles sold out throughout the holiday, purchased largely by enthusiast buyers. But with more casual gamers already converted to their mobile phones and tablets, will there be ongoing demand for new game consoles priced between $400 and $500?

PlayStation 4 and Xbox One have yet to prove they can spark demand among a wide audience of consumers.

The price of goods on eBay can be a good indicator of consumer demand, and the new consoles are currently being purchased at a premium of $40 – $80, indicating consumer demand still outweighs supply.

But how long will that last?

After core gamers buy their consoles, will families and more casual gamers also open their wallets for the new systems? Guitar Hero and Rock Band worked wonders in the last generation, elevating Xbox 360 and PlayStation 3 into party consoles. Call of Duty became an online bonding experience. The new generation does not have a killer mainstream experience just yet.

In 2014 we will see if yesterday’s gamers are content just playing their old systems, or their iPads, or watching Netflix, or just using Facebook. With so many other easy options available for consumers to spend their leisure time, the hurdles in place to sell a $400-500 console have never been higher.

Cloud gaming vaporizes

Last week we said 2014 would be the year of cloud gaming, and this week We’ve seen cloud gaming fail on multiple occasions. OnLive delivered well-known streaming AAA games to browsers and its own console, but the company went bankrupt due to poor consumer demand.

People stop buying games at retail

Since early adopters of PlayStation 4 and Xbox One are enthusiasts and potentially more open to digital downloads, sales at traditional retailers may be down compared to prior generations.

This week Valve revealed Steam Machines, an army of different computers built to primarily plug into a user’s television. With a range of price points and the potential for stronger graphics than the latest generation of consoles, Steam Machines represent a serious entry in the core enthusiast console market.

On the other end of the spectrum, more casual buyers of video games may have new options to play games on their TVs. AirPlay already lets users play iPad and iPhone games on their televisions, and rumors of more formal game offerings on set-top boxes by Apple, Amazon and Google indicate a strong likelihood of dedicated casual games for TVs coming from players other than Nintendo, Sony and Microsoft.

With the hard-core and casual segments of console gamers threatened, Sony and Microsoft may find themselves battling their prior selves in the mid-core audience of gamers. One of Xbox 360’s greatest strengths is Xbox Live, and gamers may hesitate in upgrading consoles if they worry about losing access to all of their friends on Xbox Live. Because Xbox One and Xbox 360 players cannot play games together, upgrading consoles also means leaving old friends behind. This punishment for upgrading may slow upgrades this cycle.

Gamers may choose to stick with their prior generation consoles if they wish to continue playing online shooters with their friends. Cross-platform play isn’t available between current and prior generation consoles.

Worst case scenarios are just that

These four events represent the worst case scenarios for the industry, and it’s far more likely that more positive outcomes will come to the game industry in 2014. As we look at early sales of games in 2014, let’s keep an eye out for these threats. At minimum, it might help us to sleep better when we see good news come through.