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Telecom Student Papers: Sandza - California Western
Fall 2004 Telecom Student Papers: Sandza

Online Console Gaming: The Future of Gaming and Home Entertainment

By Katherine Sandza

            The video game industry generated $9.4 billion in sales of video games and related hardware in 2001, out grossing the movie industry by one billion dollars. Set to propel this already lucrative industry to new levels in home entertainment is the development of high-speed internet console gaming.  Currently, only 1.4 million of 27 million owners of PlayStation 2 consoles and only 500,000 of 9 million owners of XBox consoles participate in online gaming.   This amounts to only 5.1% and 5.5% of the owners of these systems, respectively.  However, with the advent of “grid” computer technology along with widespread broadband penetration, these numbers should grow as online console gaming is poised to generate an estimated $2.9 billion in revenues worldwide by 2009.

The Limitations of Standard Console Gaming

            Before the advent of online console gaming, in order to play against one another players would have to be in the same room, share one television screen, and share multiple controllers.  This is problematic because it imposes all costs on the console owner who supplies the equipment.  Also, being limited to one screen necessarily limits the screen space available to any one player.  The number of people that one could incorporate into any game playing session was necessarily limited to one confined geographic area.

Current World of Online Gaming

            Video game developers, always searching for ways to exploit developing technology, realized the answer to solving these major problems lied in the internet.  Just as the internet has globalized the world’s economy, game developers and producers will use the internet to revolutionize home entertainment.  Currently, the popularity of online console gaming has been handicapped by glitches in the online gaming technology.  For example, PlayStation 2 and XBox both require the console owner to purchase additional hardware.  PlayStation 2 users must purchase a network adapter cable, manufactured by Sony, for $39.99, and XBox users must purchase the XBox Live Starter Kit, manufactured by Microsoft for $69.99.   XBox users must also pay an annual subscription fee of $49.99 and are limited to only broadband connectivity, whereas PlayStation 2 users can game online via analog or broadband connectivity.   Additionally, online gamers have complained regarding the poor lag time of the games and the difficulty of actually connecting their consoles to the Internet. 

The Next Generation of Consoles and Technology

            The next generation of consoles, led by the soon-to-be released PlayStation 3 and XBox 2, have learned from the mistakes made by their predecessors and will come fully adapted for online gaming.  Sony is expected to release its new PlayStation 3 console worldwide in 2006, which will include a built-in network adapter.  The new console will also premier the new “grid” technology, which will enable access to broadband internet up to 200 times faster.  Grid computing will provide “dependable, consistent, pervasive and inexpensive access to computational capabilities by pooling federated assets into a virtual system and a single point of access to powerful distributed resources,” according to grid technology overview.   Grid also claims that the PlayStation 3 will operate over “superfast fiber optics connections” which will allow the console to run games without a digital video disk.  Sony is looking to revolutionize home entertainment by making its new PlayStation 3 the center of tomorrow’s “digital living room” by assembling a mass-market broadband platform with endless capabilities.  The PlayStation 3 will be High Definition Television compatible and will be able to read DVDs, CDs and Blu-Ray discs.   It will also feature flashier graphics, larger game worlds, and the ability to deliver high-speed online music and movies via the console. 

Challenges in Commercial Development

            However, having consoles with online game playing capabilities is not the only hurdle that needs to be overcome before game developers and producers can fully exploit the internet gaming market.  One of the major challenges in commercial development involves creating new games with online capabilities or adapting old games to the new standards.  Video game developers of online console games must be proficient in both console development and multiplayer networking.  Game designers and producers must understand the intricacies of both the console market and the multiplayer internet gaming market, especially where these two markets overlap.  Such intricacies include online game play between two different operating systems, having detailed knowledge of each console manufacturer’s policies and operating procedures, and accounting for uniform operation over all internet connectivity options.

Availability and Cost of Broadband

            Another major challenge in commercial development is the availability and cost of broadband.  The next generation of consoles, such as PlayStation 3, are going to rely on their users having access to broadband to ensure faster operation of games.  Although the use of broadband is expected to continue growing, it still costs the average American around $40 per month to subscribe to broadband services, a cost many internet users and video gamers are unwilling to incur.  This proves challenging to game producers who have no desire to be Internet Service Providers.  Thus, their technological innovations are subject to the price and service limitations of ISPs. 

Redefining the Gaming Market

            Another challenge facing game developers is redefining the market for console online gaming.  The current market for online players is small compared to the total number of console owners.  This indicates that only a small niche market of hardcore gamers are taking the next step into online gaming.  In order to achieve greater market penetration for the next generation of consoles, producers need to market more to the casual gamer.  This issue will be partially addressed when next generation consoles come internet-ready out of the box, enabling users to plug-in and go without additional purchases or hassles.  Developers can also improve consumer marketability by emphasizing the human aspect of online console gaming.  The player-to-player feature offers gamers endless possibilities in game strategy and execution.  Additionally, developers are attempting to create a community around the online console, enabling users to interface with other players around the world.

The Endless Possibility of Online Console Gaming

          In a world that is becoming increasingly reliant on wireless and digital technology, internet console gaming is the obvious next step forward for an industry that already dwarfs the movie industry in annual revevue.  For consumers, the next generation of consoles will disperse the cost of gaming and literally open up the world of competition to players.  Friends will easily play games against each other from across the country, and any player will be able to participate in national tournaments.  For video game producers, profits will grow because rather than going to a friend's house to play a multiplayer video game, each person who wants to participate in online gaming will have to purchase his or her own console.  Producers have widened their expectations with the new consoles doing far more than older versions, and will more effectively compete with computers, DVD players, and home entertainment centers as the centers of the new "digital living room."


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