I think consoles are a dying segment. Casual won't eat console, though. Mobile will eat console, because of 1) greater audience and 2) a shift of console-qualit

I think consoles are a dying segment. Casual won't eat console, though. Mobile will eat console, because of 1) greater audience and 2) a shift of console-quality games from mobile to console. We're talking about a platform that more than 50% of all US teens own (and growing), a platform that is carried around nearly everywhere by most users, a platform that is expanding globally. Because of that audience, we're looking at ROIs that can outpace console games. Halo 4's dev and marketing costs are estimated to be well over $100MM. Its first weekend gross was $220MM. Halo 3's first weekend sales were roughly $170MM and Halo 3 ended up selling roughly $600MM total (10 million copies sold [1]). So based on that let's be generous and extrapolate Halo 4's total sales as $800MM. Keep in mind that I'm not even taking into account 1) eventual discounting on each unit and 2) retail markups and packaging costs. Angry Birds (first version) cost $135k to develop. It grossed 7.35MM (after Apple's "retail" cut) [3]. Angry Birds has a ROI of 54x. Halo 4 has a ROI of 8x (and I'm being liberal). It's also a mistake to think that smartphones are purely for casual games. Console-quality games are already moving to the iOS/Android platforms. So-called mid-core games are very profitable on mobile. There is a trend of games charging greater and greater amounts of money, as the Final Fantasy ports do. The market most certainly does not enforce a $0.99 price point. Games with higher production values routinely push past that price point. Bear in mind that the iPhone 5 is considerably more powerful than the Xbox, and is roughly 1/4th as powerful as the Xbox 360 on one metric (texture rendering). Given 1) exponential growth in mobile processing/graphics power, 2) the increasing delay between console launches which allows for catching up (8 years between the Xbox 360 and Xbox next-gen, assuming a 2013 release date), and 3) diminishing marginal returns in graphical quality when hardware quality is increased past a certain point, in 2-3 years smartphones will be capable of Xbox 360 games, and a few years after that will have caught up with next-gen consoles. This gap is narrowing even faster with tablets. The article mentions how the Wii U is comparable to an iPad 4. There are tons of startups out there building game controllers to overcome/augment the limitations of touch UIs. Mobile games are already being wirelessly hooked up to televisions/monitors. Big budget console games won't die. Not completely. There will always be a market for the absolute bleeding edge. But I think it's clear that mobile gaming will eat up huge segments of the console market. One "type" of console that I see as a potential commercial hit would be immersive AR platforms, like the Oculus Rift. But there's no reason that mobile can't eat that too after several years. Looking even farther into the future, I think there is great potential for other advancements in mobile such as actual physical buttons that are programmatically generated over the touchscreen [4]. [1] http://www.vgchartz.com/article/4787/halo-3-sells-10-million-copies-worldwide/ http://www.vgchartz.com/article/4787/halo-3-sells-10-million... [2] http://www.mobilewebgo.com/how-did-angry-birds-become-blockbuster-rovio-video-interview-and-transcript http://www.mobilewebgo.com/how-did-angry-birds-become-blockb... [3] http://www.symbian-freak.com/news/010/12/angry_birds_hits_42_million_free_and_paid_downloads.htm http://www.symbian-freak.com/news/010/12/angry_birds_hits_42... [4] http://techcrunch.com/2013/01/13/this-is-the-future/ http://techcrunch.com/2013/01/13/this-is-the-future/