Will SmartTVs Render Sony's PS4 & Xbox's 720 Obsolete?

Written by Tony Ibrahim     07/02/2012 | 01:40 | Category: INDUSTRY

The gaming console industry is characterised by a steep hill, with profit lying beyond the steepest of inclines. So why will Sony and Microsoft continue to invest in consoles when Smart TVs are evolving into unified multimedia machines?

Just ask Sony, whose PS3 has been on sale for five years, but only began generating green in 2011. During their run, Sony had to make their console less advanced (by removing backward compatibility) and then entered crisis mode when their PlayStation Network was hacked, which set the company back another £106 million ($156 million).  

When they were launched, a gaming console would transform your ordinary TV into a device that could surf the web; play videos, music and movies; and showcase your complete photo library. In essence, it transformed your ordinary TV into today's Smart TVs.

David Perry, the head of cloud gaming company Gaikai and seasoned gaming developer, spoke to ComputerAndVideoGames.com about the evolution of gaming, the rise of smartTVs and the changing nature of the gaming console. 

"For me, the definition of a console is a gaming device for the mass market," Perry began. "They plug in a cartridge, they flick a switch and a game appears on the screen."

Perry believes consoles have become far too complicated, focussing on a myriad of things rather than the fundamental gaming experience, betting some of their appeal on multimedia capabilities.

LG's OLED 55" Smart TV was flaunted at this year's CES Show
"I think they're going to stop calling them consoles and they'll start calling them something else - media something or entertainment something."

Although console companies have already invested in media capabilities, Perry believes evolutionary TVs will render these services redundant. This reform is already underway with the current SmartTV phenomenon.

"The digital TVs are also including all of that media stuff. I think the mistake that the console companies are making is not a mistake of their choice - it's the evolution they have to go through."

Perry doesn't see TVs being endowed with CPU and GPU's capable of rivalling Sony's next PS4 or Xbox's 720 consoles. Instead, he envisions a TV with a fast internet connection. This link to the World Wide Web will feed powerful cloud games to a TV, rendering tiresome consoles redundant.

Admittedly Perry has a vested interest in cloud gaming, but despite his personal stake it's hard to argue with his hypothesis. He talks of a convergence between different types of technologies, where media hubs will be capable of running games—the inverse of gaming consoles playing media—and he believes this convergence will ultimately force the TV to evolve.

"The thing is, the cloud gaming stuff is running off much more expensive hardware than what Sony will ever be able to put in its [PlayStation 3] box. It's a bit like the arcade days, when the arcade machines were $10,000 and you were paying for your time on them. 

"Once the other media hubs can have games - and I don't mean Checkers, but things like Call of Duty - the public will get confused. With that in mind, who is able to make a TV? Sony is already making them, so it will have to take all that stuff into its TVs."

Like the smartphone, which took the humble mp3 player and fused it with cameras, gaming, internet and phone capabilities, the TV will combine cloud gaming and entertainment technology into one webcentric and capable device. Imagine using Sony's PS3 remote in conjunction with a Sony TV, streaming a game from servers hidden in the cloud.

"So my prediction is that Microsoft will have to make a TV. What choice do they have? There have been lots of reports that Apple has bought out a large LCD panel-making company. It's pretty obvious that they're on the trail too."

Perry's TV utopia sounds far too futuristic to hinder current technologies. But his company Gaikai has already signed a deal with LG, where it will incorporate its technology into their TVs. When you consider IPTV's origins, evolution and promise, coupled with movie delivery services, you wonder: perhaps this point of conversion is closer than we think?