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Does PC Gaming Have a Future?
Dennis Fong, Adam Boyden
May 5, 2006 00:43

Introduction
Editor's Note: The following is a guest column from Dennis Fong and Adam Boyden of Xfire.

Recently, Dennis was chatting with a friend, who started going on about how "PC gaming is dead" and "consoles are the future." When Dennis asked him whether he actually played any PC games, the answer was, of course, "well, no, not really..."

Now, we can't really blame him, as the media is constantly going on these days about how wonderful the new generation of consoles is (or will be), how ground-breaking the games are, how they will change our lives forever, and, of course, how PC gaming rigs are now superfluous. As with most things in life, the truth is much more complex, though, and much more interesting as well.

Every time the consoles go through their five-year metamorphosis, it is accompanied by innumerable articles pronouncing the death of PC gaming. Usually they come from industry analysts who always seem to forget that their doom-laden predictions have never come true in the past. This time, however, more than with previous console technology launches, PC game sales appear to be shrinking rapidly. For example, Informa Telecoms & Media predicted in October 2005 that PC game software sales will shrink from $4.31 billion in 2005 to $2.95 billion in 2010. Reading this prediction, you would think that the PC games industry might as well chuck in the towel and follow the lemmings off the cliff.

These predictions, however, all contain a major flaw: they are based on projections from retail store sales, which completely ignore the rise of alternative revenue sources in the PC gaming industry. These include monthly subscriptions in the MMORPG world, digital distribution via systems like Steam, and the sale of equipment and avatars in the Asian games market.

Consoles are designed for one thing and they do it really well. But while the technology has improved, these units still predominantly rely on the game pad as the principal input device. Console titles are uniformly aimed at the mainstream, and therefore must rely upon the lowest common denominator of equipment. Game pads, however, are not optimal for shooters, strategy games and MMORPGs. And before everyone starts bleating that consoles now have Halo 2 and Call of Duty 2, remember that all major world gaming championships involve PC titles.

The Case For PC Gaming
What most gamers don't realize is that while consoles are cheaper to purchase, they end up being more expensive in the long run because console titles are more expensive. Recent estimates are that the PS3 will cost Sony $900 to manufacture. It's safe to assume that Sony will be selling it for less at retail, which means they'll be making up those losses through the sale of games and licensing fees. For that reason, game publishers' margins are much lower for console titles than the equivalent PC titles, because much of the retail price is paid to the console manufacturer. Couple this with the skyrocketing development costs for console games, and you can understand why publishers focus their efforts on sequels and mass market titles.

On the other hand, the PC is an open platform, and therefore does not have the high licensing fees and developer kit costs required to write games for consoles. Combine this with the increasingly attractive alternative distribution models for PC games, and you can have a very profitable game franchise without the need for sequels or mass unit sales. The open nature of the PC platform encourages new publishers to introduce new intellectual property, innovative game play and highly-targeted niche products. The PC world allows big budget titles like World of Warcraft to happily compete profitably side by side with niche titles such as Eve Online, something that would be impossible with consoles.

The open nature of the PC platform also contributes to intense competition, something that is great for both the industry and the consumer. Take online gaming as an example. In the old days, playing online PC games with your friends was a nightmare unless you understood the intricacies of IP networking. Today, through multiple companies competing to solve the problem, you have products like Xfire that keep track of your friends, know when they are online and allow you to join their games with just one click.

While online gaming on consoles has improved immeasurably with services like Xbox Live, they remain limited. For example, Xbox Live is great for finding friends online and chatting, but only if both parties are using the console at the same time, and really only with voice chat. Meanwhile over in the PC world, not only does Xfire allow you to find your friends and chat with them using text or voice, it allows friends to chat both within and outside of games, giving them a permanent presence online. Gamers are usually not playing the entire time - something we admit to doubting at times when watching Xfire users - which again makes the PC platform extremely powerful.

A Flexible Future
The competitive nature of PC gaming is also removing from the picture one of the historical criticisms of PC gaming: that it is difficult compared to playing games on consoles. This includes complaints about installing and patching games, or finding friends to play them with online. Multiple iterations of Microsoft's Windows OS, better drivers for peripherals, graphics cards, motherboards and sound cards, and free services like Xfire have all led to much greater ease of use for gamers than in the past.

At Xfire, we see PC gaming trends in real time. When you have over 4 million registered users each running Xfire an average of 89 hours per month, you pretty much have a good idea of where gaming is going. One of the more common criticisms of PC gaming is that it has become cost prohibitive; many of the latest PC games require a PC costing at least $2,000 to run. Yet, as the trends show on Xfire, the most popular games are not necessarily the ones that have the nicest graphics or the most special effects, but rather the ones that have the best game play. Among the top ten games being played now are World of Warcraft, Counter-Strike, Guild Wars, Call of Duty, and Warcraft III, all of which require only modest hardware to play.

Last, but certainly not least, is the Microsoft factor; Redmond undoubtedly has to defend its operating system dominance. One of the only key areas where Microsoft enjoys a significant advantage is with games using its DirectX architecture. Without DirectX there is no real need to run Windows anymore, as you can do everything just as well on Linux or the Mac. Microsoft knows it cannot give up this lead and will, no doubt, do everything in its power to promote the PC as the future gaming platform of choice.

So does PC gaming have a future? Absolutely, but perhaps not in a form we would recognize today. The flexible and open nature of the PC platform will continue to mean the introduction of ground-breaking new games and models over the next few years. We're excited to see what's next.

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