Video game console
A video game console is an electronic device that outputs a video signal or image to display a video game that can be played with a game controller. These may be home consoles which are generally placed in a permanent location connected to a television or other display device and controlled with a separate game controller, or handheld consoles that include their own display unit and controller functions built into the unit and can be played anywhere. Hybrid consoles combine elements of both home and handheld consoles.
Video game consoles are a specialized form of a home computer geared towards video game playing, designed with affordability and accessibility to the general public in mind, but lacking in raw computing power and customization. Simplicity is achieved in part through the use of game cartridges or other simplified ways of distribution, easing the effort of launching a game. However, this leads to ubiquitous proprietary formats that creates competition for market share. More recent consoles have shown further confluence with home computers, making it easy for developers to release games on multiple platforms. Further, modern consoles can serve as replacements for media players with capabilities to playback films and music from optical media or streaming media services.
Video game consoles are usually sold on a 5-7 year cycle called a generation, with consoles made with similar technical capabilities or made around the same time period grouped into the generations. The industry has developed a razorblade model for selling consoles at low profit or at a loss while making revenue on the licensing fees for each game sold, with planned obsolescence to draw consumers into the next console generation. While numerous manufacturers have come and gone in the history of the console market, there have always been two or three dominant leaders in the market, with the current market led by Sony (with their PlayStation brand), Microsoft (with their Xbox brand), and Nintendo (currently producing the Switch console and its lightweight derivative).
The first video game consoles emerged in the early 1970s. Ralph H. Baer devised the concept of playing simple spot-based games on a television screen in 1966, which later became the basis of the Magnavox Odyssey in 1972. Inspired by the table tennis game on the Odyssey, Nolan Bushnell, Ted Dabney, and Allan Alcorn at Atari, Inc. developed the first successful arcade game, Pong, and looked to develop that into a home version, which was released in 1975. The first consoles were dedicated to only a set group of games built into the hardware. Programmable consoles using swappable ROM cartridges were introduced with the Fairchild Channel F in 1976 though popularized with the Atari 2600 released in 1977.
Handheld consoles emerged from technology improvements in handheld electronic games as these shifted from mechanical to electronic/digital logic, and away from light-emitting diode (LED) indicators to liquid-crystal displays (LCD) that resembled video screens more closely, with the Microvision in 1979 and Game & Watch in 1980 being early examples, and fully realized by the Game Boy in 1989.
Since the 1970s, both home and handheld consoles became more advanced following global changes in technology, including improved electronic and computer chip manufacturing to increase computational power at lower costs and size, the introduction of 3D graphics and hardware-based graphic processors for real-time rendering, digital communications such as the Internet, wireless networking and Bluetooth, and larger and denser media formats as well as digital distribution. Following the same type of Moore's law progression, home consoles were grouped into generations, each lasting approximately five years, with consoles within each sharing similar technology specifications and features such as processor word size. While there is no standard definition or breakdown of home consoles by generation, the definition of these generations used by Wikipedia including representative consoles is shown below.
There are primarily three types of video game consoles: Home consoles, handhelds, and hybrid consoles.
Most consoles are considered programmable consoles and have means for the player to switch between different games: this most often can be through a physical game cartridge or game card or through optical media, or with the onset of digital distribution, via internal or external digital storage device with software downloaded via the Internet through a dedicated storefront supported by the manufacturer of the console. Some consoles are considered dedicated consoles, in which games available for the console are "baked" onto the hardware, either by being programmed via the circuitry or set in the read-only flash memory of the console, and cannot be added to or changed directly by the user. The user can typically switch between games on dedicated consoles using hardware switches on the console, or through in-game menus. Dedicated consoles were common in the first generation of home consoles, such as the Magnavox Odyssey and the home console version of Pong, and more recently have been used for retro-consoles such as the NES Classic Edition and Sega Genesis Mini.
Early console hardware was designed as customized printed circuit boards (PCB)s, selecting existing integrated circuit chips that performed known functions, or programmable chips like erasable programmable read-only memory (EPROM) chips that could perform certain functions. Persistent computer memory was expensive, so dedicated consoles were generally limited to the use of processor registers for storage of the state of a game, thus limiting the complexities of such titles. Pong in both its arcade and home format had a handful of logic and calculation chips that used the current input of the players' paddles and resisters storing the ball's position to update the game's state and sent to the display device. Even with more advanced integrated circuits (IC)s of the time, designers were limited to what could be done through the electrical process rather than through programming as normally associated with video game development.
Improvements in console hardware followed with improvements in microprocessor technology and semiconductor device fabrication. Manufacturing processes have been able to reduce the feature size on chips (typically measured in nanometers), allowing more transistors and other components to fit on a chip, and at the same time increasing the circuit speeds and the potential frequency the chip can run at, as well as reducing thermal dissipation. Chips were able to be made on larger dies, further increasing the number of features and effective processing power. Random-access memory became more practical with the higher density of transistors per chip, but to address the correct blocks of memory, processors needed to be updated to use larger word sizes and allot for larger bandwidth in chip communications. All these improvements did increase the cost of manufacturing but at a rate far less than the gains in overall processing power, which helped to make home computers and consoles inexpensive for the consumer, all related to Moore's law of technological improvements.
For the consoles of the 1980s to 1990s, these improvements were evident in the marketing in the late 1980s to 1990s during the "bit wars", where console manufacturers had focused on their console's processor's word size as a selling point. Consoles since the 2000s are more similar to personal computers, building in memory, storage features, and networking capabilities to avoid the limitations of the past. The confluence with personal computers eased software development for both computer and console games, allowing developers to target both platforms. However, consoles differ from computers as most of the hardware components are preselected and customized between the console manufacturer and hardware component provider to assure a consistent performance target for developers. Whereas personal computer motherboards are designed with the needs for allowing consumers to add their desired selection of hardware components, the fixed set of hardware for consoles enables console manufacturers to optimize the size and design of the motherboard and hardware, often integrating key hardware components into the motherboard circuitry itself. Often, multiple components such as the central processing unit and graphics processing unit can be combined into a single chip, otherwise known as a system on a chip (SoC), which is a further reduction in size and cost. In addition, consoles tend to focus on components that give the unit high game performance such as the CPU and GPU, and as a tradeoff to keep their prices in expected ranges, use less memory and storage space compared to typical personal computers.
In comparison to the early years of the industry, where most consoles were made directly by the company selling the console, many consoles of today are generally constructed through a value chain that includes component suppliers, such as AMD and NVidia for CPU and GPU functions, and contract manufacturers including electronics manufacturing services, factories which assemble those components into the final consoles such as Foxconn and Flextronics. Completed consoles are then usually tested, distributed, and repaired by the company itself. Microsoft and Nintendo both use this approach to their consoles, while Sony maintains all production in-house with exception of their component suppliers.
Some of the commons elements that can be found within console hardware include:
All game consoles require player input through a game controller to provide a method to move the player character in a specific direction and a variation of buttons to perform other in-game actions such as jumping or interacting with the game world. Though controllers have become more featured over the years, they still provide less control over a game compared to personal computers or mobile gaming. The type of controller available to a game can fundamentally change the style of how a console game will or can be played. However, this has also inspired changes in game design to create games that accommodate for the comparatively limited controls available on consoles.
Controllers have come in a variety of styles over the history of consoles. Some common types include:
Numerous other controller types exist, including those that support motion controls, touchscreen support on handhelds and some consoles, and specialized controllers for specific types of games, such as racing wheels for racing games, light guns for shooting games, and musical instrument controllers for rhythm games. Some newer consoles also include optional support for mouse and keyboard devices.
A controller may be attached through a wired connection onto the console itself, or in some unique cases like the Famicom hardwired to the console, or with a wireless connection. Controllers require power, either provided by the console via the wired connection, or from batteries or a rechargeable battery pack for wireless connections. Controllers are nominally built into a handheld unit, though some newer ones allow for separate wireless controllers to also be used.
While the first game consoles were dedicated game systems, with the games programmed into the console's hardware, the Fairchild Channel F introduced the ability to store games in a form separate from the console's internal circuitry, thus allowing the consumer to purchase new games to play on the system. Since the Channel F, nearly all game consoles have featured the ability to purchase and swap games through some form, through those forms have changes with improvements in technology.
While magnetic storage, such as tape drives and floppy disks, had been popular for software distribution with early personal computers in the 1980s and 1990s, this format did not see much use in console system. There were some attempts, such as the Bally Astrocade and APF-M1000 using tape drives, as well as the Disk System for the Nintendo Famicom, and the Nintendo 64DD for the Nintendo 64, but these had limited applications, as magnetic media was more fragile and volatile than game cartridges.
In addition to built-in internal storage, newer consoles often give the consumer the ability to use external storage media to save game date, downloaded games, or other media files from the console. Early iterations of external storage were achieved through the use of flash-based memory cards, first used by the Neo Geo but popularized with the PlayStation. Nintendo continues to support this approach with extending the storage capabilities of the 3DS and Switch, standardizing on the current SD card format. As consoles began incorporating the use of USB ports, support for USB external hard drives was also added, such as with the Xbox 360.
With Internet-enabled consoles, console manufacturers offer both free and paid-subscription services that provide value-added services atop the basic functions of the console. Free services generally offer user identity services and access to a digital storefront, while paid services allow players to play online games, interact with other uses through social networking, use cloud saves for supported games, and gain access to free titles on a rotating basis. Examples of such services include the Xbox network, PlayStation Network, and Nintendo Switch Online.
Certain consoles saw various add-ons or accessories that were designed to attach to the existing console to extend its functionality. The best example of this was through the various CD-ROM add-ons for consoles of the fourth generation such as the TurboGrafx CD, Atari Jaguar CD, and the Sega CD. Other examples of add-ons include the 32X for the Sega Genesis intended to allow owners of the aging console to play newer games but has several technical faults, and the Game Boy Player for the GameCube to allow it to play Game Boy games.
Consumers can often purchase a range of accessories for consoles outside of the above categories. These can include:
Console or game development kits are specialized hardware units that typically include the same components as the console and additional chips and components to allow the unit to be connected to a computer or other monitoring device for debugging purposes. A console manufacturer will make the console's dev kit available to registered developers months ahead of the console's planned launch to give developers time to prepare their games for the new system. These initial kits will usually be offered under special confidentiality clauses to protect trade secrets of the console's design, and will be sold at a high cost to the developer as part of keeping this confidentiality. Newer consoles that share features in common with personal computers may no longer use specialized dev kits, though developers are still expected to register and purchase access to software development kits from the manufacturer. For example, any consumer Xbox One can be used for game development after paying a fee to Microsoft to register one intent to do so.
Since the release of the Nintendo Famicom / Nintendo Entertainment System, most video game console manufacturers employ a strict licensing scheme that limit what games can be developed for it. Developers and their publishers must pay a fee, typically based on royalty per unit sold, back to the manufacturer. The cost varies by manufacturer but was estimated to be about US$3−10 per unit in 2012. With additional fees, such as branding rights, this has generally worked out to be an industry-wide 30% royalty rate paid to the console manufacturer for every game sold. This is in addition to the cost of acquiring the dev kit to develop for the system.
The licensing fee may be collected in a few different ways. In the case of Nintendo, the company generally has controlled the production of game cartridges with its lockout chips and optical media for its systems, and thus charges the developer or publisher for each copy it makes as an upfront fee. This also allows Nintendo to review the game's content prior to release and veto games it does not believe appropriate to include on its system. This had led to over 700 unlicensed games for the NES, and numerous others on other Nintendo cartridge-based systems that had found ways to bypass the hardware lockout chips and sell without paying any royalties to Nintendo, such as by Atari in its subsidiary company Tengen. This licensing approach was similarly used by most other cartridge-based console manufacturers using lockout chip technology.
With optical media, where the console manufacturer may not have direct control on the production of the media, the developer or publisher typically must establish a licensing agreement to gain access to the console's proprietary storage format for the media as well as to use the console and manufacturer's logos and branding for the game's packaging, paid back through royalties on sales. In the transition to digital distribution, where now the console manufacturer runs digital storefronts for games, licenses fees apply to registering a game for distribution on the storefront - again gaining access to the console's branding and logo - with the manufacturer taking its cut of each sale as its royalty. In both cases, this still gives console manufacturers the ability to review and reject games it believes unsuitable for the system and deny licensing rights.
With the rise of indie game development, the major console manufacturers have all developed entry level routes for these smaller developers to be able to publish onto consoles at far lower costs and reduced royalty rates. Programs like Microsoft's ID@Xbox give developers most of the needed tools for free after validating the small development size and needs of the team.
Similar licensing concepts apply for third-party accessory manufacturers.
Consoles like most consumer electronic devices have limited lifespans. There is great interest in preservation of older console hardware for archival and historical purposes, but games from older consoles, as well as arcade and personal computers, remain of interest. Computer programmers and hackers have developed emulators that can be run on personal computers or other consoles that simulate the hardware of older consoles that allow games from that console to be run. The development of software emulators of console hardware is established to be legal, but there are unanswered legal questions surrounding copyrights, including acquiring a console's firmware and copies of a game's ROM image, which laws such as the United States' Digital Millennium Copyright Act make illegal save for certain archival purposes. Even though emulation itself is legal, Nintendo is recognized to be highly protective of any attempts to emulate its systems and has taken early legal actions to shut down such projects.
To help support older games and console transitions, manufacturers started to support backward compatibility on consoles in the same family. Sony was the first to do this on a home console with the PlayStation 2 which was able to play original PlayStation content, and subsequently became a sought-after feature across many consoles that followed. Backward compatibility functionality has included direct support for previous console games on the newer consoles such as within the Xbox console family, the distribution of emulated games such as Nintendo's Virtual Console, or using cloud gaming services for these older games as with the PlayStation Now service.
Consoles may be shipped in a variety of configurations, but typically will include one base configuration that include the console, one controller, and sometimes a pack-in game. Manufacturers may offer alternate stock keeping unit (SKUs) options that include additional controllers and accessories or different pack-in games. Special console editions may feature unique cases or faceplates with art dedicated to a specific video game or series and are bundled with that game as a special incentive for its fans. Pack-in games are typically first-party games, often featuring the console's primary mascot characters.
The more recent console generations have also seen multiple versions of the same base console system either offered at launch or presented as a mid-generation refresh. In some cases, these simply replace some parts of the hardware with cheaper or more efficient parts, or otherwise streamline the console's design for production going forward; the PlayStation 3 underwent several such hardware refreshes during its lifetime due to technological improvements such as significant reduction of the process node size for the CPU and GPU. In these cases, the hardware revision model will be marked on packaging so that consumers can verify which version they are acquiring.
In other cases, the hardware changes create multiple lines within the same console family. The base console unit in all revisions share fundamental hardware, but options like internal storage space and RAM size may be different. Those systems with more storage and RAM would be marked as a higher performance variant available at a higher cost, while the original unit would remain as a budget option. For example, within the Xbox One family, Microsoft released the mid-generation Xbox One X as a higher performance console, the Xbox One S as the lower-cost base console, and a special Xbox One S All-Digital Edition revision that removed the optical drive on the basis that users could download all games digitally, offered at even a lower cost than the Xbox One S. In these cases, developers can often optimize games to work better on the higher-performance console with patches to the retail version of the game. In the case of the Nintendo 3DS, the New Nintendo 3DS, featured upgraded memory and processors, with new games that could only be run on the upgraded units and cannot be run on an older base unit. There have also been a number of "slimmed-down" console options with significantly reduced hardware components that significantly reduced the price they could sell the console to the consumer, but either leaving certain features off the console, such as the Wii Mini that lacked any online components compared to the Wii, or that required the consumer to purchase additional accessories and wiring if they did not already own it, such as the New-Style NES that was not bundled with the required RF hardware to connect to a television.
Consoles when originally launched in the 1970s and 1980s were about US$200−300, and with the introduction of the ROM cartridge, each game averaged about US$30−40. Over time the launch price of base consoles units has generally risen to about US$400−500, with the average game costing US$60. Exceptionally, the period of transition from ROM cartridges to optical media in the early 1990s saw several consoles with high price points exceeding US$400 and going as high as US$700. Resultingly, sales of these first optical media consoles were generally poor.
When adjusted for inflation, the price of consoles has generally followed a downward trend, from US$800−1,000 from the early generations down to US$500−600 for current consoles. This is typical for any computer technology, with the improvements in computing performance and capabilities outpacing the additional costs to achieve those gains. Further, within the United States, the price of consoles has generally remained consistent, being within 0.8% to 1% of the median household income, based on the United States Census data for the console's launch year.
Since the Nintendo Entertainment System, console pricing has stabilized on the razorblade model, where the consoles are sold at little to no profit for the manufacturer, but they gain revenue from each game sold due to console licensing fees and other value-added services around the console (such as Xbox Live). Console manufacturers have even been known to take losses on the sale of consoles at the start of a console's launch with expectation to recover with revenue sharing and later price recovery on the console as they switch to less expensive components and manufacturing processes without changing the retail price. Consoles have been generally designed to have a five-year product lifetime, though manufacturers have considered their entries in the more recent generations to have longer lifetimes of seven to potentially ten years.
The competition within the video game console market as subset of the video game industry is an area of interest to economics with its relatively modern history, its rapid growth to rival that of the film industry, and frequent changes compared to other sectors.
Effects of unregulated competition on the market were twice seen early in the industry. The industry had its first crash in 1977 following the release of the Magnavox Odyssey, Atari's home versions of Pong and the Coleco Telstar, which led other third-party manufacturers, using inexpensive General Instruments processor chips, to make their own home consoles which flooded the market by 1977.: 81–89 The video game crash of 1983 was fueled by multiple factors including competition from lower-cost personal computers, but unregulated competition was also a factor, as numerous third-party game developers, attempting to follow on the success of Activision in developing third-party games for the Atari 2600 and Intellivision, flooded the market with poor quality games, and made it difficult for even quality games to sell. Nintendo implemented a lockout chip, the Checking Integrated Circuit, on releasing the Nintendo Entertainment System in Western territories, as a means to control which games were published for the console. As part of their licensing agreements, Nintendo further prevented developers from releasing the same game on a different console for a period of two years. This served as one of the first means of securing console exclusivity for games that existed beyond technical limitation of console development.
The Nintendo Entertainment System also brought the concept of a video game mascot as the representation of a console system as a means to sell and promote the unit, and for the NES was Mario. The use of mascots in businesses had been a tradition in Japan, and this had already proven successful in arcade games like Pac-Man. Mario was used to serve as an identity for the NES as a humor-filled, playful console. Mario caught on quickly when the NES released in the West, and when the next generation of consoles arrived, other manufacturers pushed their own mascots to the forefront of their marketing, most notably Sega with the use of Sonic the Hedgehog. The Nintendo and Sega rivalry that involved their mascot's flagship games served as part of the fourth console generation's "console wars". Since then, manufacturers have typically positioned their mascot and other first-party games as key titles in console bundles used to drive sales of consoles at launch or at key sales periods such as near Christmas.
Another type of competitive edge used by console manufacturers around the same time was the notion of "bits" or the size of the word used by the main CPU. The TurboGrafx-16 was the first console to push on its bit-size, advertising itself as a "16-bit" console, though this only referred to part of its architecture while its CPU was still an 8-bit unit. Despite this, manufacturers found consumers became fixated on the notion of bits as a console selling point, and over the fourth, fifth and sixth generation, these "bit wars" played heavily into console advertising. The use of bits waned as CPU architectures no longer needed to increase their word size and instead had other means to improve performance such as through multicore CPUs.
Generally, increased console numbers gives rise to more consumer options and better competition, but the exclusivity of titles made the choice of console for consumers an "all-or-nothing" decision for most. Further, with the number of available consoles growing with the fifth and sixth generations, game developers became pressured to which systems to focus on, and ultimately narrowed their target choice of platforms to those that were the best-selling. This cased a contraction in the market, with major players like Sega leaving the hardware business after the Dreamcast but continuing in the software area. Effectively, each console generation was shown to have two or three dominant players.
Competition in the console market in the 2010s and 2020s is considered an oligarchy between three main manufacturers: Nintendo, Sony, and Microsoft. The three use a combination of first-party games exclusive to their console and negotiate exclusive agreements with third-party developers to have their games be exclusive for at least an initial period of time to drive consumers to their console. They also worked with CPU and GPU manufacturers to tune and customize hardware for computers to make it more amenable and effective for video games, leading to lower-cost hardware needed for video game consoles. Finally, console manufacturers also work with retailers to help with promotion of consoles, games, and accessories. While there is little difference in pricing on the console hardware from the manufacturer's suggested retail price for the retailer to profit from, these details with the manufacturers can secure better profits on sales of game and accessory bundles for premier product placement. These all form network effects, with each manufacturer seeking to maximize the size of their network of partners to increase their overall position in the competition.
Of the three, Microsoft and Sony, both with their own hardware manufacturing capabilities, remain at a leading edge approach, attempting to gain a first-mover advantage over the other with adaption of new console technology. Nintendo is more reliant on its suppliers and thus instead of trying to compete feature for feature with Microsoft and Sony, had instead taken a "blue ocean" strategy since the Nintendo DS and Wii.