We've been seeing the decline in games that you could categorize between budget and AAA for years now (It's why space shooters are gone, traditional rally racer's are almost gone, and countless other genres and franchises that used to enjoy healthy fringe lifes in this industry are gone). But I'm still far away from believing it could go away.
If anything the longer generation we're now in, the time developers have had to become used to HD, and the growth in a few licensable engines that dominate much of the industry is going to help matters. It's pretty widely held that ballooning game development cost such as the adoption of HD were greatly responsible for this decline we saw this generation in particular when developers could no longer afford to go after smaller subsections of this industry when expected revenues and profits weren't rising in tune with cost. So the more that happens to help stabilize things is just going to help matters rather than hurt them if revenues have a chance to do a bit of catching up so you don't need a runaway hit just to make money from a project with a healthy sized budget.
But that's not what I said. An increasingly number of people are now jumping off the deep end and proclaiming that AAA game development is an endangered species and that gaming in the future is going to be dominated by Angry Birds style experiences...
And while I subscribe to it being inevitable that physical media is endangered, it's still going to require internet infrastructure to be in a certain state before it really becomes a possibility for the handheld and console world (Among a range of other things that have to gradually happen as well for it to be smoothly accepted). The fact that things like bandwidth caps are becoming more common and that many people are getting close to hitting them just by being an avid user of streamed standard definition video content from places like Netflix should suggests that the capacity for an all download future for videogaming is still quite some ways off.
Yet we still get the nuts that suggest everytime when we get even a hint of a rumor of a console revision that Sony, Nintendo, or Microsoft will be doing it without an optical drive for existing platforms. And the same with upcoming platforms including the Wii U.
The fact of the matter is the infrastructure to allow it just isn't in place yet and won't be for quite sometime. So that's our physical media guarantee for the next few years and at least through this upcoming console generation. I'm really quite sure it's not going to be this switch they just hit like some people seem to expect. There's no way we're going to go from physical game distribution being their primary distrbituion system one generation to being nonexistent the next.
Computers are an entirely different matter. Consumers themselves have been abandoning optical drives in the computer world for years, file sizes are often reasonable enough for many programs where it's not a real problem even with bandwidth caps to download many programs, etc. And the convenience of Steam and the many inconveniences publishers like Ubisoft always seem to be placing upon their physical PC game releases has driven many devotees of PC gaming gradually towards downloads.
And it hasn't been an overnight transition. It has been a long and gradual one with a long road ahead before 100% downloading and no optical drives becomes commonplace. And I expect the console world to do likewise. We saw the birth of digital distribution in the previous generation, we saw it grow into a practical and important secondary form of distribution with this current generation, and I expect we'll see it be on a equal footing with physical this upcoming generation (where it's confirmed on the Wii U and all but a guarantee on the Xbox 720 and Playstation 4).
Then, I'm even willing to wager that physical media will have at least one more run out of the gate in the console world afterwards as a secondary distribution method while they convert the large minority that hasn't yet fully embraced downloading (With optical drives perhaps even being optional add-ons or nonstandard across all SKU's).
I think there will still be a place for handheld gaming devices dedicated to playing games.
Of course I think the large section that traditionally went this route for portability will continue to shift towards devices they're already taking with them that can do a multitude of other tasks in addition to gaming. But many gamers playing handhelds never took them out of the house and appreciate the advantages for gaming that a dedicated system provides. Just witness the popularity of tv/out options in the past for some evidence of that segment of handheld gamer's being significant
Handhelds don't necessarily equate to portability. I suspect many a 3DS and Vita has never even left home and that segment isn't going to go away. I'm sure the days of 100-150 million handhelds is part of the past, but I see no reason why these two handhelds and future handhelds can't pull console like install bases.
As do I...
It won't be long if you're right before we hear about many publishers jumping ship, hardware manufacturing being discontinued, hardware and software disappearing from stores, etc.
Yet somehow I think I'll be able to walk into any retailer that carries videogames six months or a year from now and buy a new Vita and buy games from a selection of new releases.![]()