The release of Grand Theft Auto V yesterday brought to the forefront an apocalyptic scenario. The end-times theme isn’t part of the blockbuster video game’s setting, a fictionalized Los Angeles that’s havoc-filled but otherwise enduring. The apocalypse is part of the non-pixelated reality for gamers living through the final weeks in the eight-year reign of the Xbox 360 and PlayStation 3.
Later this year, next-generation technology from the two major gaming powers will hit the market and render obsolete the current console, which will be banished en masse to dusty closets and the cluttered shelves of GameStop (GME) outlets. Grand Theft Auto V will likewise become an outmoded relic: Neither the Xbox One nor the PlayStation 4 will be able to run games made for older consoles (at first, anyway).
Rockstar Games (TTWO) reportedly spent $115 million developing Grand Theft Auto V and $150 million on marketing—and the game is expected to make almost six times that much in sales over the course of the first year. So maybe a relatively short shelf life doesn’t matter much. Still, it seems strange to develop the most expensive video game ever for machines that will soon take a major step toward irrelevance.
In part, the decision to build for the old consoles is driven by the fact that game developers have gotten really good at it. Aaron Garbut, the art director at Rockstar North, told BuzzFeed that the studio is just hitting its stride when it comes to using the capabilities of the current consoles to do things like replicate convincing-looking daylight. Dan Houser, co-founder of Rockstar Games, told Famitsu magazine that the best games for a console always come out at the moment before it’s overtaken by newer machines:
The fact that hardware’s so mature right now is exactly why we’re able to go on to the next level. GTA 4 was our first attempt at a new platform and HD visuals, so the first part of development was seriously difficult. Now we know what the hardware’s capable of, so it’s become a lot easier to move things along and a lot more fun, too.
This seems especially plausible given that Grand Theft Auto V has a rating of 98 out of 100 on the game-rating site Metacritic. While the Xbox One and PlayStation 4 will be more powerful and include features unavailable on their predecessors, there will also be a learning curve that could go on for several years.
The market for gaming consoles is also relatively friendly to developers who don’t immediately move to the hot new thing. About 150 million current versions of the Xbox and PlayStations have been sold worldwide, and even the most optimistic sales forecasts for the upcoming consoles put them nowhere near those numbers for quite some time. Nor will Microsoft (MSFT) or Sony (SNE) stop selling their old gear. It could be as late as 2015 before annual sales of the Xbox One and PlayStation 4 surpass sales of their lower-priced predecessors, according to
Gartner (IT) analyst Brian Blau.
For the next several years, developers will continue to serve two sets of gamers. “I would expect that we would get one more year out of parallel development, where you will see parallel titles, but after a while the developers will start to see diminishing returns,” Blau says. “I think it’s going to take some time.”
It will take three to four years before the current consoles really become obsolete if the patterns of past cycles continue, and by then sales of the Xbox One and PlayStation 4 will likely be slowing down as consumers anticipate the next generation of consoles down the line. That will be just about the time when developers finally start cranking out games that take advantage of the aging technology.
