Game Isn’t Over for Consoles - Wall Street Journal

Microsoft’s Xbox One is offered for sale with Activision Blizzard ‘Call of Duty’ products at a California GameStop location in 2016. Photo: Patrick T. Fallon/Bloomberg News

By

Dan Gallagher

Dan Gallagher
The Wall Street Journal
• Biography

July 3, 2019 7:00 am ET

Cloud gaming may be coming, but it won’t rain on the PlayStation and Xbox parades anytime soon.

Sony SNE -0.06% and Microsoft MSFT 0.66% both are developing new consoles, expected to hit the market late next year. That will be seven years after the PlayStation 4 and Xbox One first went on sale—and seemingly bad timing considering that tech heavyweight Google will be a year into its own cloud-gaming service by that point. That service, known as Stadia, is specifically designed to eliminate the need for dedicated consoles, as the games are simply streamed over the internet directly to TV sets, computers and mobile devices.

But the reality is that cloud gaming will likely take longer to catch on than many observers think. Besides the technical hurdles to delivering such a service, cloud gaming also requires access to the right games with a compelling price model. Google’s Stadia seems to fall short on that front, at least based on the launch details the company shared last month. While praising the future potential of the service, Brian Nowak of Morgan Stanley noted that it “could be years, not quarters, before cloud gaming products become scaled viable alternatives for most gamers.”

Game consoles, by contrast, already have a large base of dedicated players. Sony’s PlayStation 4 alone will soon pass the 100 million mark in terms of units sold. They also will remain the best way to deliver the most robust gaming experience for a long while. Sony and Microsoft both have shared enough technical details of their coming devices to make clear they are targeting the power-gaming crowd. Sony said its new console will show an “extraordinary improvement in rendering speed.” Advanced Micro Devices is developing customized processors for both new machines.

Both companies are also aren’t sitting still when it comes to the cloud. In fact, they struck an unusual arrangement in May to jointly develop some game-related cloud services. Microsoft also announced last month its plans to start public testing of its own game-streaming service in October—right around the time of Google’s planned Stadia launch.

Microsoft happens to be one of the very few companies with a global cloud network that can rival Google’s. It also already has about 63 million monthly users of its Xbox Live service that is closely tied to its console. For Alphabet ’s GOOG 1.21% Google, it will take more than a few clicks to win over this crowd.

Write to Dan Gallagher at dan.gallagher@wsj.com

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https://www.wsj.com/articles/game-isnt-over-for-consoles-11562151601

2019-07-03 11:00:00Z
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