Last month we provided the first round in a debate between Emergent Technologies producer Ben Hoyt and Silicon Knights president Denis Dyack regarding Dyack's notion of a "one-console future." Today we are pleased to present the second round, but please be sure to read the first part before you proceed.

Mr. Dyack,

Thank you for responding to my letter and clarifying your position. I am relieved that we agree that a console monopoly would be bad for the consumer. If you decide that your invitation to continue this conversation next month in Lyon should include a public dialogue, as part of your presentation on the subject, I would be delighted to participate.

In your latest letter, you assert that the games industry is moving, "inevitably," towards a future in which all console games will be playable on any console, thanks to "an open format with many manufacturers." I assume that your prediction is only intended to include "console games," and that you are not implying that a single type of hardware will satisfy the needs of console gamers, handheld gamers and mobile gamers. I also assume that you are not talking about a truly open hardware format, in which manufacturers compete with each other by providing new and different hardware configurations in order to woo consumers with the promise of performance advantages. After all, that describes the current PC market, and the console market is not in imminent danger of being supplanted by PCs. Nor is the PC market free of the consumer confusion and hardware compatibility issues that you cite as major drawbacks in a world with more than one console. If I am mistaken with either of these assumptions, please let me know.

Given these assumptions, you assert that video game consoles will eventually become commoditized, a state that you define as characterized by "performance oversupply - which means that the market is performance saturated and any differentiation, even when being offered, is more than what the market demands." However, your own example doesn't meet this definition. I seriously doubt that someone who has dropped hundreds of dollars on an iPhone, Treo, or Blackberry would agree that their purchases have no differentiating features. True commodities, according to your own definition, are generally raw materials and components, like oil, sugar, corn, and gold. "Commodities markets" exist for all of these products, and their "futures" can be traded on stock exchanges, a situation that is certainly not true of cell phones or (anytime soon) game consoles.

Let's not debate the semantics of the word "commoditization," though. Your point seems to really be that you see a single console becoming the industry-wide standard. You cite the diminishing marginal returns on increased screen resolution as an example of how "the distinguishable differences between each successive generation of game technology is getting smaller and smaller and of less perceived value by the consumer." This is really an argument for a halt in further console generations, not a reduction in the number of consoles (as screen resolutions are already a standardized feature shared by both Xbox 360 and PS3). Nonetheless, you seem to be implying that, eventually, the differences between the consoles will be so insignificant that a second (or third) console would truly be redundant.

The distinguishable differences between the consoles are increasing, however, not decreasing with each successive generation. Even a comparison limited to the Xbox 360 and the PS3 shows far more differentiating factors than just processing power. Different mixes of features such as force feedback, motion control, networking support, hard drive space, online services, backwards compatibility, HD-DVD/Blu-Ray support, media center functionality, and more serve to make these devices highly differentiated consumer electronics devices whose use and value extend well beyond the games that are played on them. If you add Nintendo's Wii into the mix, the differences become even more profound. More importantly, compared to previous generations, the differences between consoles are becoming more, not less, numerous and significant. (I can certainly think of more differences between a 360 and a PS3 than I can between a SNES and a Genesis).

Unless you can describe a realistic scenario in which two of the three major console manufacturers bow-out of the hardware race, it seems clear to me that the industry is moving away from, not towards, a one-console landscape. I agree with you that this trend poses challenges for developers, but I believe that the consumer choices and diversity of gaming experiences that it creates far outweigh these costs.

Fortunately, there is a process of standardization at play that stands the potential to dramatically reduce the hassles of multi-platform game development. This trend is not one of hardware, however, but one of software. Recent years have seen a remarkable move towards cross-platform, 3rd-party, software solutions. Middleware from companies such as Scaleform, Ageia, Havok, AudioKinetic, IDV, RAD, Emergent, Epic, and others all strive to reduce the cost and alleviate the pain of cross-platform development by abstracting the hardware differences away from developers.

Middleware may be far from perfect, but it is improving and developers are adopting it in growing numbers. In the long run, these "software standards" offer the realistic potential to allow developers to continue to create profitable games, without sacrificing the significant consumer benefits that arise from a competitive console market offering a diversity of features and experiences to gamers.

Sincerely,
Ben Hoyt
Producer
Emergent Game Technologies

Next page: read Dyack's response...