Rumour Mill

Fri 13 Jan 2012 7:53am GMT / 2:53am EST / 11:53pm PST
Hardware

Taking perspective on hardware launch stories - why do we think 2012 is a console announcement year?

Here's a cheerful thought, as you make your way through January - you're going to spend the next five months or so listening to a cavalcade of theories, rumours, revelations from trusted yet anonymous sources, and (perhaps most of all) theories and rumours disguised as revelations from trusted yet anonymous sources, all regarding the content of Microsoft and Sony's E3 briefings in June.

It's a fairly inevitable thing, although that doesn't make it even remotely a more palatable prospect. After all, Nintendo leapt out of the blocks at last year's E3 with the Wii U unveiling, and thus, conventional wisdom is that PS3 and Xbox 360 replacements must be on the cards this time around.

The UK's MCV magazine reckons it has a source that's confirmed that both Sony and Microsoft will unveil consoles. Kaz Hirai has outright denied that Sony will reveal anything at E3, prompting Internet wags to declare themselves terribly clever by pointing out that Sony's conference is always held before E3, rather than during the show itself. Then Gaikai's Nanea Reeves pronounced that one or the other of Sony or Microsoft wasn't going to do another generation at all, effectively bowing out of the market.

In this market, the idea of nice, neat, concurrent console generations is a meaningless one.

All this, and we're not even halfway through January. How ludicrously contradictory and intolerable are the next five months going to be? (Actually, it's more like six months, but I'm assuming that one or both of the platform holders will stick to tradition and manage to leak the main contents of their E3 conference a week or two before the show, at which point perhaps everyone will shut up.)

Yet with press and soundbite-generating execs tripping over themselves to demonstrate the most acute cases of premature speculation, something that's desperately needed is a quiet moment in which we can sit down and ask why, exactly, anyone thinks that 2012 is a console announcement year.

The answers are incredibly simple, and therein lies the problem. People assume that PS4 and Xbox Whatever are going to appear at E3 because Wii U appeared last year, and because it's been six years since the start of this generation of hardware, so it's "time". Additionally, their belief that E3 is a console announcement show this time around is reinforced because, in its usual manner, the media has spiralled the story from "hmm maybe" to "YES DEFINITELY" in the space of a few short months, without anything approaching an injection of new facts or information along the way. Everyone's talking about it, so it must be true.

Let's approach those rationales one at a time. Firstly, the question of Wii U. The assumption is that Sony and Microsoft will not allow Nintendo to have a new console on the market "unopposed" for a long period of time. It's an assumption grounded in the notion of the console war being defined in strict generations - each company launches hardware of broadly similar specification within a time window of two years or so, they duke it out, and the winner goes home to a Scrooge McDuck style swimming pool full of money.

That kind of conventional wisdom is rapidly becoming meaningless, though. Yes, the Wii launched at around the same time as 360 and PS3, but its hardware specifications were a several years behind those consoles, and its subsequent sales curve was wildly different from theirs. Wii sold on a sharp, aggressive curve, and cut its price deep along the way. It's now absolutely a console in the very late stages of its lifespan, much more so than 360, despite actually being a year younger than Microsoft's offering. Meanwhile, in the time that the present generation of consoles have been around, iOS and Android devices have appeared from nowhere and rapidly iterated through multiple generations, even proliferating new form factors like tablet computing. In this market, the idea of nice, neat, concurrent console generations is a meaningless one.

Are Sony and Microsoft happy that Wii U will beat them to market? No, probably not, but they're probably trying very hard not to see it as a case of being beaten to market at all. Bear in mind that Wii U won't be a more powerful console than the 360 or PS3 - rather, it'll be similar in specification, but sporting a unique tablet interface. 360 and PS3, meanwhile, sport Kinect and Move respectively as major recent feature upgrades, and it can't have escaped the notice of those companies that they both offer mobile phone and tablet devices to the market which could potentially replicate the functionality of Wii U. Of course, if they were being really clever, they'd replicate Wii U's functionality in an iPad application that links to your PS3 or 360. Either way, they're unlikely to feel that this is sufficient pressure to warrant speeding up the arrival of next-gen hardware.

How about the second factor, then - the simple fact that we're six years into the generation, so it's now "time" for new hardware?

For broadly the same reasons as outlined above, that's absolute nonsense - it's only time for new hardware when the tech, the market and the finances make sense, and both platform holders have been adamant from the outset that they didn't see this generation as a five or six year long pitch. They've invested heavily, and they need more time to get their money back - especially since competition has meant that the pie, although it's bigger this time around, has been sliced up more thinly, especially from Sony's perspective.

If Sony and Microsoft can get away with it, they'd both dearly love 2012 to be another year that's all about current platforms.

Take a look at the sales curves of the three consoles, if you really want to understand this situation. The Wii, as mentioned, had a fast and aggressive sales curve that generated a big installed base and has now slowed significantly. PS3 and Xbox, meanwhile, have tracked fairly similar curves, with PS3 running a year behind Xbox but very slowly making up the difference (largely thanks to sales outside the USA). Compared with the last generation's all-conquering PS2, both consoles are lagging behind, but not very significantly - it's only a matter of a few per cent. Decent price cuts in 2012 would push them further into mass market territory, but price cuts have come more slowly in this generation than in the last, which supports the idea of slower, more drawn out hardware generation.

Bearing all of this in mind, what should we really expect to see - and that's "expect", from the present market situation, rather than on the basis of rumour or industry scuttlebutt - at E3 this year? Honestly, nothing. I'd expect Sony to make a big deal out of Vita, push out a significant PS3 price cut (perhaps even a fresh redesign?) and perhaps start to make noise about tighter integration between PlayStation and Xperia. On Microsoft's side I'd expect more of a drive towards core adoption of Kinect and a very heavy presence for Windows Phone 7 devices and games at the conference. If either company was to start dropping hints about the next gen of hardware, I'd expect it to be Microsoft, but neither company actually needs, or wants, to commence buzz around next-gen systems just yet.

Have no doubt - the next gen of console hardware is coming, and both companies are making plans. You don't have to start digging very deep into an industry contact book to find that out. There are also contingency plans afoot, certainly - if one firm discovers that the other is going to do some kind of E3 unveil, they want to have something ready to respond with, after all. But I don't think anyone could place hand on heart and say that they're certain of seeing new hardware at E3 this year. If Sony and Microsoft can get away with it, they'd both dearly love 2012 to be another year that's all about current platforms, and not expensive, profit-busting dreams of the future.