Defining a generation of consoles is not always easy, yet it seems that each new group of gaming systems has its own design choices that are similar enough to predict the shifts we expect to see in the next generation. Even though we are still at the maturity stage of the current generation of consoles, there is growing chatter among gaming press and developers about when and what to expect for the next generation of consoles. With Epic’s Rod Fergusson saying that the Xbox 360 is approaching its full technical potential and companies like Crytek saying their next-generation engine will be ready for 2012, the speculation continues to grow about just what will shape the upcoming group of consoles.

Before we can really understand about what to expect, it’s very important to ground some of the lofty goals and concepts that people may have about the industry based on the limitations it is currently facing. If we are heading towards a new set of hardware released within the next 2-4 years, what problems will be the largest ones to overcome in order to make the next logical steps. Each manufacturer is likely to adapt their own strategy, as Nintendo did so dramatically with their Wii console, but most of the trends that are moving forward rapidly now should be prevalent across all systems. It’s important to recognize the biggest challenges of the industry moving forward, what can be done about them, and how it is going to limit the consumers as well as the developers moving forward.

Retailers

With the rising popularity of digital distribution, the future of gaming seems to be online. With many developers continuing to push this idea, and with the constant stream of positive press and strong sales that online games are getting as time goes on, the online shift seems to be almost a reality. Even full retail games like Burnout Paradise have been announced for the PSN, available for the same price as retail, giving users an opportunity to have the same experience as you can pay for in stores via the PSN service. On the PC side, Steam continues to gain headway and is becoming an industry hub for the distribution of games, old and new, and an effective anti-piracy system, as well. It seems like bad news for those selling the retail discs of games now, with many expecting the next generations focus to side with online distribution.

However, the retail space will definitely have its place going forward. Not counting the purchase of hardware and accessories that digital distribution hasn’t quite found a replacement for, there are still those who prefer to have their physical copy of games. That alongside the constant push for limited edition goodies, it seems gamers are content to accept bonuses for a bit more cash, the trend for triple-A titles to include a special edition, limited edition, and elite-ultra-double-top-secret edition along with their primary SKU seems to be building rather than dying down. It’s also very easy to underestimate the amount of clout that retailers have in distribution of games among less frequent gamers, and the fact that as the industry grows so do the profits of companies like GameStop, GAME and even HMV (who have recently added games to their line-up of products with very positive results) means that there influence on what products get put onto shelves means that publishers continue to take notice.

Some insight into how the retail system works alongside digital distribution was noted in an interview with industry provocateurs Gabe and Tycho of Penny Arcade regarding the distribution of their game. “[When we told GameStop we were selling it online first] They got really upset. And they said, no, you can’t do that. We can’t have it in our store if it’s coming out digitally first.” Although the group isn’t a large publisher, the stance that the retailers feel they can take seems telling as to their influence on the market. “And so the deal that they tried to strike with Robert [Head of PA's business team] was okay, well, listen: If you cut us in on the profits from online distribution, and XBLA, and everything it comes out on, then we’ll think about carrying it in the store.”

Retailers also have the advantage in the coming generations due to the sheer size of the content that is coming out. With games like Metal Gear Solid 4: Guns of the Patriots utilizing the full space of a Blu-Ray disc, nearing 50 GB of content, the concept of pushing this amount of information online is not feasible in many areas, especially in countries limited by network availability.

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