Right off the bat let me saw there is no way I think this is the last console generation but I feel this is the last time we will see anything that resembles the console generations we are used to. We have just fully entered the next generation and you can see the seeds of change taking place already. There are signs everywhere of an industry that is unable to sustain itself in its current model. So let us take a look at why these changes will take place.

First the obvious, mainly that for the first generation the console industry will shrink. Every generation has been growing in revenue with the last one being the pinnacle of the consoles reign. Three totally healthy systems and record sales that generated more revenue than movies and music industries combined.  Well this next generation will clearly be a different story as we already know the Wii U is an utter failure and the Xbox One has had a rocky start.  An absolute ton of money was injected into the game industry through a massive influx of casual gamers because of the Wii last gen. It is the main reason we saw record sales, granted Nintendo almost alone reaped the benefits but it still raised the profits of the industry as a whole. Any time you hear "console industry sales were down X% compared to last gen" the main reason why that is so is because the casual gamers are gone.  

There is no way to fill the gap left by what the Wii accomplished last gen, over 110 million consoles, and incredible software sales (don't believe the notion that Wii software didn't sell) all gone from this up coming generation. Yes the PS4 will pick up some of the slack and almost undoubtedly sell better than the PS3 but I don't think it will reach PS2 or even Wii levels. So where did all these casuals go; the way I see it they just went to the next cool gadget, which to most are phones. It was a bubble. The console industry has no replacement at this time, so guess what, we are reverting back to the PS2 era level of sales. To be fair the industry has been on a decline for the last few years, ever since the wii stopped selling and because this last generation went on for way too long. This new generation will raise sales for a few years but there is no way it is reaching the heights of 2007-2010.

More numbers here

Declining industry sales is not the meaningful on its own, especially when many companies never saw a penny of that casual market boom so their removal wouldn't really change anything. Even though money was flowing through the lifeblood of the console industry some areas were rotting. Amiss all the record sales came development team after development team being shut down. Jobs were being lost at an alarming rate. Record budgets and out of control development cycles lead to games which couldn't generate a profit without selling an improbable amount of copies. I believe that the record sales of the industry in general worked as deodorant for the stink that was occurring behind the scenes.

Look at a list of all the development teams that have shut down over the last generation. Does that look healthy to you? We all know a few weeks ago we lost Irrational, a development team that created one of the best games of last year, gone after releasing Bioshock Infinite to multimillion sales. It wasn't enough; Infinite had a development cycle of over 5 years with an inflated budget, a few million sales was not enough. This story happens all the time, the entire industry feels like it is stuck in the movie Groundhog Day with everyone continuously making the same mistakes over and over. Over the last year it seems like the publishers are finally dropping the gauntlet and now no developer is save no matter the pedigree, case in point Sony Santa Monica just canceled what is a much need new PS4 IP because it was in development hell.

The result of all these closures has led to the death of mid-tier game. Every game these days seems to either have to be a gigantic AAA level epic or a small indie like title. The days of the experimental mid- tier titles seem to be done. There are no more Beyond Good and Evils, or Eternal Darkness,  or Mark of Kri. Games like Yakuza, Darksiders, and even Demon's Souls came from that class and only get to stick around cause of their major success. Look at the lineup of games for the next gen systems, notice how few games are being released? What are those games; mostly sequels, licensed games or a big budgeted title that publishers hope becomes their next money making machine. Instead the indie or small downloadable game has filled in the void left by the mid-tier titles. Now I believe the indie scene is one of the best things to happen to gaming, especially the old-school gaming revival.Still I feel like there is something missing from the gaming lineups.

Publishers are taking less and less risks with their major retail releases. We are seeing more games follow similar patterns  because they are proven sellers. How many games feel like CoD, or Uncharted, or GTA, or Gears of War. It has gotten to a point where you can see a small clip of a game and understand exactly how it will play. The Order 1886 is a new IP for Sony, well take one look at a screenshot of the game and you can instantly tell exactly how the game will play it. It maybe "new" but it shares the DNA of the most common third person shooters. It seems to me that the only real innovations being made to most major titles are in online integration. Destiny, The Division, and Titanfall all have this idea of making always connected multiplayer games but keeping some elements of a single player story driven game. I see nothing in terms of actual new gameplay concepts being explored, why, because it's a risk unless you are a small low budget game.

Let's take a moment to compare the state of games from the start of last generation to this generation. Think back to the first year of the last gen and what was being shown at E3. Games like Mass Effect, Uncharted, Gears of War, were graphical power houses that excited gamers to make the jump to next gen because games like those were impossible in the previous generation. That is not the case this generation as almost everything is a cross gen game and the graphical jump is no where near as large. Think about how many epic sequels we were getting back in 2006. We were getting a new Metal Gear Solid, a new Final Fantasy, a new Gran Turismo, a new Halo, a new Devil May Cry, a new game by Team Ico, a new Resident Evil, a new Elder Scrolls, a new Grand Theft Auto!  All these series had graphical upgrades that left fans salivating for the next version, the trailers were mind blowing! The excitement was everywhere.  Then reality hit and some of those games got delayed countless times, some did not live up to expectations and now we are far more cynical than we were back in 2006. What do we have to look forward to now in terms of major games, yes we still got a new MGS and FF game but the luster of those franchises have taken a hit. GTAV just hit which means there will be no GTA for another 5 years. Gran Turismo 6 just hit, so no GT for many years. Resident Evil just came off its worst mainline title; people are more scared than excited for a new Resident Evil.  And the Last Guardian, well that is still not out yet. Now we have the yearly installment games where the only difference between the last gen version and the next gen version is a more stable resolution. Call of Duty and Assassin's Creed will sell well but will they really get anyone to make the jump into next gen right away?

To me personally the decline of the Japanese market has been the most depressing aspect of our changing console industry. The console industry was built by Japan (yeah Atari laid the foundation, that is nothing compared to what Nintendo and Sega did), it was led by Japan. The reason almost everyone my age is a gamer is because of Japan. They made the systems we grew up on and they made the games we loved. Something happened last generation that caused almost all Japanese publishers to decline in importance to the point where their games are almost niche level. I believe that Japan was not ready for the development costs and time cycles of the powerhouse systems. Companies that would pump out sequels every 2-3 years were now taking 4-5 years to release a game. Capcom, Sega, Konami, Namco, doesn't matter where you look there was massive downscaling and all that is left is a few projects for each publisher. The only one to seem healthy was Nintendo because they remained in the previous generation, the Wii was a Gamecube, so they continued to make games as they always did and made billions. Now they entered the HD era and look at them; games being delayed left and right, Iwata constantly apologizing because their games are taking so long to be made. You would think Nintendo had enough warning to understand the dangers of giant development cycles, guess not. That crippled the Japanese gaming industry; I don't believe they had the understanding of development in these modern systems like western developers did because most western devs have been working on PCs which is a far more similar development environment.

And so here we are now, a new generation is stumbling out of the gate. Yes PS4 numbers are fantastic, the truth is there are millions of core gamers that are never going anywhere, so they have to buy something and the console of choice this generation seems to be the PS4. Let's wait a few months and really compare how this generation is fairing compared to the last one. Again I don't see the console industry failing, simply that this will be a generation where it needs to figure out exactly what it is going to be going forward. The previous generation should be analyzed and studied for years to come, looking back it was pretty crazy what went on. Money flowed like mad but it only went to a very select few spots. People point to GTAV "look it broke every sales record". That is great for Rockstar; that means nothing to EA or Sony or Capcom.  I haven't even touched on the giant elephant in the room which is the rise of mobile gaming and other devices that many times offer free games.  The console industry is going to have to take a hard long look at itself and figure out what elements to keep and what to cut out. Giant development cycles need to stop. Companies need to learn to take risks with major console games without ending up bankrupt. Japan needs to get it's act together and remember why we loved them in the first place.  What matters most will always be the games. If they keep reducing the amount of games, or worse making them all play exactly the same, people will start to find new places to play their games.