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In 2012 we will face the beginning of the end of game consoles as hardware assets. Gamers nowadays know how to use the Internet and how to take the most out of any device. Portable game consoles have already faced it: slow launches, degrading sales and hardware price-cuts. In 2012 we will feel a new trend: a decline in all game consoles sales, both portable and non-portable.

The Game is Changing

Slow starts and declining sales of Nintendo 3DS and Sony PlayStation Vita were followed by price-cuts despite of the fact that platform holders said in advance that games for them would be more advanced than titles for smartphones and tablets. The reality has proven that the claims by Nintendo and Sony were essentially incorrect. The launches were not accompanied by breakthrough titles and were not strong to say at least. In 2012, we will feel the same about home game consoles, such as Microsoft Xbox 360, Sony PlaysStation 3 and Nintendo Wii/Wii U. In fact, the launch of Wii U will show whether the consoles are on the decline or not.

The mass success of Apple iPhone/iPad as well similar devices like Samsung Galaxy-series smartphones and tablets with proper graphics hardware has proven that they are capable of supporting advanced games with near-HD quality of graphics. Indeed, those SoCs feature two Cortex-A9 general processor cores as well as PowerVR advanced graphics with leading-edge feature-set.

Current system-on-chips, which power Apple, Samsung and other devices, have a lot of capabilities (but sometimes lack elementary things for PC graphics like anisotropic filtration), but the next-generation of system-on-chips will support even more, Nvidia Tegra 3 as well as Apple A5X SoCs that support acceleration of full-HD 3D graphics are probably the best example of what advanced chips for smartphones and tablets can do and how powerful can they be.

In terms of hardware, it is relatively easy to install next-gen chips from media tablets and smartphones into TVs, Blu-ray disc players and other consumer electronics. The new Apple iPad  has screen with 2056*1536 resolution, which is beyond full HD – 1920*1080. Perhaps, the same A5x chip can be installed into potential future Apple HDTVs and thus provide it with ultimate gaming capabilities that no other TVs support.

Moreover, the costs of games for portable and non-portable video game consoles are incomparable to cost those for smartphones. For example, Prince of Persia Warrior Within Costs €2.99/$3.99 on Apple App Store, but it costs $15.50 for Sony PSP and $32.62 for Sony PS3. Loads of games, such as popular Creative Mobile’s Drag Racing, or Z2Live’s MetalStorm: Wingman are simply free.

Powerful Hardware Becomes Affordable

With highly integrated and relatively inexpensive system-on-chips that can handle complex computations and high-definition 1080p graphics declines of pricing, it will be possible to integrate them into variety of electronics and thus make it competitive against video game consoles from major platform holders.

Samsung is a bit ahead of Apple when it comes to leading-edge chips, which is why the company can install its latest Exynos SoCs – including the Exynos 5250  with two ARM Cortex-A15 « Eagle » cores – into its TV-sets earlier than Apple releases its TVs. Why don’t hardware makers with established platforms install Exynos-like hardware into its devices?

« I do not see any technological obstacles in terms of integration of high-performance chipsets into TVs, » said a highly-informed source at a major consumer electronics company.

Bills of materials (BOMs) of contemporary tablets clearly show that display, touchscreen, battery, cameras, case, mechanical materials and building costs can account for around 60% of the whole BOM. Hence, key electronics of the new Apple iPad that allows to launch games and apps, according to EETimes estimates, costs just about $52.5. This cost can relatively easily be integrated into mainstream and high-end TVs.

TV-sets with integrated key chips, such as Apple A5X (eventually, A6 or A7) as well as Samsung Exynos 5250, from next-generation tablets and smartphones would be able to handle 1080p games. Given the fact that they will utilize iOS or Google Android-like operating systems, games and apps developed for those TVs will also work on smartphones and tablets, providing software designers ultimate installed base that will be comparable to those of major non-portable game consoles or even higher.

The World Is Changing

« I think that the future spans around mobile devices and social networks. Therefore, all apps compliant to these [major] platforms are ought to progress. The idea is that the apps for [mobile] devices/social networks, browser games should gradually merge into something united and, eventually, seize this world, » said Serhiy Slyeptsov, chief executive officer at Creative Mobile.

In terms of hardware, Apple’s third-generation iPad (and probably sixth-generation iPhone) supports just more than high-definition video output. During its launch, Mike Cappls, the president of Epic Games, already pointed out that the latest media tablet has more random access memory and higher resolution than the PlayStation 3 and Xbox 360.

Of course, it took Apple around six years to achieve that, but with the current progress of smartphones and tablets it is easy to foresee crossover in terms of software quality between devices and non-portable game consoles in the coming quarters or years.

The main advantage of video game consoles is their long life-cycle that can be six to ten years. TV-sets also have long lifespans and provided that they feature good enough SoCs inside that can handle advanced games, they will easily provide three-to-five years cycles, which will be just what the doctor ordered for game developers. For example, many of new iOS games are compatible with iPhone 3GS, which is three years old. Therefore, the same can happen with embedded video game platforms.

With improving quality of hardware and software as well as cross-platform compatibility of apps and games, mobile and embedded gaming platforms will clearly press special-purpose game consoles. But before that happens, many gamers will simply slowdown purchase of games for PlayStation, Xbox and Wii and will play them on tablets instead. This will happen already this year and will mean the beginning of the end for video game consoles.

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