DEBATE The last generation of consoles?

Wild Tangent founder, chairman and CEO Alex St Johntold the Wedbush Morgan Securities annual Management Access Conferencethat game consoles will soon cease to exist as we currently know them.
"I think you're looking at the last generation of game consoles, and I think it's easy to defend that position," he said.
"Thething that's interesting is, a console is not a game enabling device -it's a game blocking device, unless you've paid for it. So, theprinciple value of a console is as DRM technology to solve the piracyproblem."

St John said that graphics are now a commodity.We no longer need a game console to have pretty graphics on the screen- everything has pretty graphics, and they are cheap, so consoles willno longer be able to differentiate themselves on that basis.
Gamesin the near future are primarily going to be differentiated bycommunity, St John said, recognising World of Warcraft and Pogo - whathe called "the World of Warcraft for old people" - as examples.
"Community-basedgaming is going to dominate the market and the economics. Andcommunity-based games don't need DRM, because communities can't bestolen, and therefore nobody needs to share any revenue with theconsole manufacturer.
"World of Warcraft is the most profitablegame in history. Pogo is, I imagine, wildly profitable, and not aconsole game. World of Warcraft will generate 1.2 billion dollars thisyear in online subscriptions, and nobody can pirate it."
St Johnsees the invention of community-based games as a major revolution whichhas displaced graphics as a defining feature. In a world wherecommunity defines gameplay, there is no need to share money withconsole manufacturers and no need for retailers to carry a box in thestore.
"I think the business model in ten years - and probablygoing to happen very quickly - there are going to be two left ingaming. It's going to be microtransaction based...And, again, becauseI'm a mathematician and an engineer, microcurrency-based economies arejust the most efficient way to maximize revenue. They work really well.
"Andsecond is advertising, because advertising is a great alternativepayment type for kids who don't have access to online currency and arehuge game players. So, if you don't have any way to take money fromkids, then the only way to get kids to play is by advertisers marketingto them.
"So I think those will be the two dominant economies. I think that you won't see a lot of consoles."
StJohn also said the other reason he thinks that the PC will becomedominant in the home in gaming is due to the large number of laptopsbeing sold to kids going back to school.
"...And kids who musthave a laptop in the next ten years to go to school do not pick theirlaptop because it is great at doing their math homework. That's not whythey're going to choose that laptop. His PSP's going to be confiscatedat school; no one's going to take his laptop away from him because theyneed that for their homework."
St John called laptops "fabulousgaming devices with Wii-like graphics, instantly tied to community, 100per cent online and a vast volume of free play for kids who don't havecredit cards."
"So, I think ten years from now, there is aconsolidation of platforms, mobile devices, predominantly PC, probablynothing like consoles as you know them any more, and advertising andmicrocurrency-based economies," he concluded.
"Alex, I think that was brilliant and I agree 100 per cent," fellow panelist Nolan Bushnell remarked.
"He's right," St John replied, to laughter from the crowd. "I agree with Nolan."