This is one for the master race: once upon a time PCs were expensive. Very expensive. When it came to playing video games, consoles existed as a cheaper alternative. But that argument holds less weight today. The average cost of PCs has been steadily declining while consoles are slowly increasing in price.
Ben Thompson at Stratechery expands upon this observation, and uses it to make the argument that there is a massive gap in the market for a cheap, games focused device ala Apple TV to come in and gobble up profits. I’m not convinced that this is accurate — that gap has mostly been filled by tablets, mobile devices and handhelds I’d argue — but it does raise an interesting point: why have PCs continually gotten cheaper, while consoles have increased in price?
Thompson’s argument is simple: by trying to make consoles catch all media devices, console manufacturers are driving up the price of consoles, but moving away from the needs of average consumers.
“Specifically,” he writes, “incumbents are driven by their best customers to add more and more features that drive up the price, causing the incumbents’ product to move further and further away from the average customer’s needs.”
And Thompson uses the example of the Xbox One — a device that has been slowly backtracking from it’s all-in-one marketing messaging since the console was announced, to the point where its last E3 presentation focused exclusively on the Xbox One as a gaming device. This movement, you could argue, is a direct response to the PlayStation 4’s success after pitching itself as a console designed almost exclusively for gaming (despite the fact that both consoles, by and large, have exactly the same feature set).
But could a cheaply made gaming device designed to be used with televisions actually work? I’d say no. The next step for that type of business model, I’d argue, is an eco-system built directly into TVs that mirrors the way we consume games on tablets. I’d say that’s far more likely.
Via Business Insider