Tokenomics 2020

We are getting around to “Next Generation Console” hype so I thought I would dig up a presentation I wrote in 2007 and presented at the IDC tech conference in 2008 on the future of the game market.  Keep in mind that at the time that I wrote this presentation there was no such thing as an IPad tablet, online gambling was being banned in every state and the Fed was cracking down on offshore casinos operating in the US.  Microsoft had just bought Massive on the promise that the future of gaming would be $50 consoles games loaded with video ads.  WildTangent at the time was the 4th largest game site in the US and the only gaming site using microcurrency and advertising as an alternative to payment.. 1 year after I gave this presentation WildTangent passed Yahoo and became #1.  This presentation also includes an ancient quote from my much earlier market analysis at Microsoft (Taking Fun Seriously)  justifying the creation of DirectX on the premise that doing so would create a market for what today are widely known as MMOG’s.  Finally the presentation also includes my much earlier work on a viral equation to describe social virality… I’m embarrassed to observe that the equation presented here actually had a typo in it, but I’m going to resist fixing it because that would be cheating… In any event it is obsolete compared to the much more recent EUREKA equations I posted here that I suspect may be the last word on viral math for a few years to come.

The purpose of publishing all of this now is of course to ascribe instant and unimpeachable credibility to everything I plan to say about the future of games going forward.  🙂

For starters, I’m not the least bit surprised that the Wii-U flopped, that the the PS4 is likely to flop and without even knowing what Microsoft plans for the NextBox… it has a grim future if it is NOT a mobile device.  Apple has already made the killer next generation game console, any future box somebody makes to sit next to a TV is doomed.  The old retail console market died many years ago, it just takes a while for the corpse to stop twitching and everybody to accept it.  The Arcade game market was generating over 11B/yr in revenue when it died and like today’s console business it took a lot longer for people to admit that it had happened… past tense…

If I had any wisdom to share with Microsoft today, I would tell them to do the same thing now that I told Sony when they sent their CTO to meet with me to advise them on how to compete with the first Xbox.  “Don’t make a new console, you’ll just sacrifice your market-share.  Slap more RAM in the PS/2, crank up the clock rate, stick a LAN chip on it and call it a PS/3.  Use the time and money that saves you to learn how to build an online service.”    Microsoft shouldn’t make another console that isn’t a mobile device, they should slap more RAM and crankup the clock rate on the Xbox360 and call it the next generation, then put their energy into learning how to build a mobile console game business that competes with Apple while they still have a gaming brand, if it’s not already be too late.

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