NPD analyst: "Hardware cycles as we knew them are over"

[Atheerios]

I wanted to take a moment to discuss about NPD analyst and ERA member Mat Piscatella's opinions about hardware cycles. Basically from October results, one of his "quick hit takes" is that "hardware cycles as we knew them are over".

He then explained:





Edit:

So, probably should have used more concrete context. "Highly unpredictable" is really in reference to an expected range of error in a hardware forecast. Of course it isn't random, and of course hardware sales can be forecast. But the range of error is higher now. "Highly unpredictable" can signal randomness, which is certainly not the case here. Bad word choice on my part.

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And I think he's right. It's clear that both PS4 and Xbox One are still seeing tremendous success even when we are relatively late in their life cycles. 3DS is also seeing a similar situation in the US. This of course can be attributed to the Pro and X revisions, but I think there's also the other important factor mentioned by Mat: "bigger consumer response to promotion". But why is exactly this happening? What makes this generation's promotions more appealing to people than last gen's?

This also ties into Nintendo's ex-president statement about Switch having a 10 year life cycle. With revisions that boost the performance, there's really no need for a full successor in a long time if this trend continues.

But returning to Sony and Microsoft, it's evident they are working on next-gen consoles and will release as soon as 2020. Should those consoles be developed with longer life cycles in mind? Multiple revisions instead of a succesor in 6-7 years, so they have a 10 year cycle like Nintendo?

 

[Hawk269]

With sales being so strong for both PS4 and Xbox, which included PRO/X, I wonder if MS/Sony feel that they can put off next gen a little bit meaning 2021?

 

[CypherSignal]

Question probably more for Mat (or Zhuge, etc) but have there been much data released by NPD, Chart-track, Msft, SIE, or whoever showing breakdowns of PS4 Pro vs. PS4 sales, and Xbox One X vs. Xbox One (S) sales over time? I know there's data from the Japan sales side of things, but I've seen a frustrating scarcity of information of that regard in other territories

 

[Zetta]

Honestly if the games keep coming this gen can last longer I wouldn't mind.

 

[Deepthought_]

I have said before that the PS4 and Xbox one are far more advance than previous gaming systems .

This changes how they are viewed and used even if the main priority of the systems is gaming. Also the graphics to me are at a point where it's damn near photo realistic . The only drastic change I could see from next gen consoles is the frame rates improving

 

[Nintendo]

Good! Mid-gen hardware refresh should be the new standard. I hope Sony learned their lesson and go all the way with the upgrade next-time.

 

[jroc74]

Good! Mid-gen hardware refresh should be the new standard. I hope Sony learned their lesson and go all the way with the upgrade next-time.

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Agree with this.

Expect.... I don't think Sony had to learn a lesson. What they did didn't effect sales in a negative way.

I feel Sony should do what they feel makes more business sense for them with their mid gen refresh.

Really, anyone that wants the more powerful mid gen refresh today can get the One X. If they really care about most powerful.

If anything, hopefully MS learned a lesson....that power isn't everything.

Need more than just power, best place to play 3rd party games.

 

[Nanashrew]

very much likely the standard going forward, yeah.

New console launch > year or 2 later we get a revision (slim/XL model) > at around the 3 year mark a more powerful iteration (Pro model).

3 year mark for a Pro model makes the most sense because newer chips, etc., should be much cheaper by then to do

 

[skeezx]

i agree predictability is out the window but by and large the "hardware cycle" will still be intact, about half a decade then new gen hardware. it just plays out differently

 

[JusDoIt]

Maybe last gen was the outlier. PS4 is behaving more like the PS2 than the PS3. PS4 and PS2 enjoy better economic times than the PS3 did tho.

 

[Deleted member 6730]

Nah. For the most part this usually happens with hardware this late in the gen. Hardware is cheap and games are plentiful (and also cheap) it's a good time to impulse buy a console. The 2-3 year hardware cycle just doesn't work for consoles. No one is actually upgrading from the base PS4 to the Pro. If anything they're just hopping onto the Pro.

 

[Mass Effect]

Question probably more for Mat (or Zhuge, etc) but have there been much data released by NPD, Chart-track, Msft, SIE, or whoever showing breakdowns of PS4 Pro vs. PS4 sales, and Xbox One X vs. Xbox One (S) sales over time? I know there's data from the Japan sales side of things, but I've seen a frustrating scarcity of information of that regard in other territories

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Nope. We basically know nothing.

 

[SolidChamp]

Good! Mid-gen hardware refresh should be the new standard. I hope Sony learned their lesson and go all the way with the upgrade next-time.

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I think the reason we didn't see Sony go all out with the Pro specs is because it was extremely important to them that they keep that $399 price tag. The prospect of being able to offer a boost in performance at the same price point as the stellar OG launch price was their way of playing it safe.

They want to stay as far away from that $599 debacle as possible, and I can't say I blame them. It worked on me.

 

[Nintendo]

I think the reason we didn't see Sony go all out with the Pro specs is because it was extremely important to them that they keep that $399 price tag. The prospect of being able to offer a boost in performance at the same price point as the stellar OG launch price was their way of playing it safe.

They want to stay as far away from that $599 debacle as possible, and I can't say I blame them. It worked on me.

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Yeah but seeing the X1X success, people don't mind paying more money for more power.

 

[TheMadTitan]

I figured this would be the new standard before this gen even started. I figured the Switch's whole "portable to living room" approach would become some sort of new standard, too.

With sales being so strong for both PS4 and Xbox, which included PRO/X, I wonder if MS/Sony feel that they can put off next gen a little bit meaning 2021?

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They won't need to, they'll just discontinue the base Xbone and PS4 and the Pro/X will just become the baseline until the mid-next gen refresh where those two get discontinued.

 

[iksenpets]

This is why all the people citing standard cycle lengths as why new consoles are needed in 2019 are wrong. Things are changing. There are both more low cost markets to tap into as you move the price lower now, and there is less demand for anything new on the high end due to mid-cycle refreshes and the power available now just being adequate for most things. This is set to be the most profitable holiday yet, not one of decline, and no one is looking to end that quite yet.

 

[Spinluck]

Maybe last gen was the outlier. PS4 is behaving more like the PS2 than the PS3. PS4 and PS2 enjoy better economic times than the PS3 did tho.

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It was the outlier because the PS3 launch was dogshit, and Nintendo was dominating the home console hardware space for a little bit.

MS also ate up a good amount of the PS2 install base.

 

[Vareon]

With how good games can look and play nowadays, I'm happy if PS4 can stay for another 3-4 years. I'm playing The Witcher 3 for the first time now and I'm happy how good it looked and play, I hope I don't have to buy a new hardware just to play a better looking game.

 

[tiebreaker]

I'd think the popularity of gaming youtube and streamers really help with getting consoles more mainstream.

 

[Jessie]

I guess I'll be waiting for PS5 Pro lol

 

[Titik]

I honestly don't mind. Starting a new generation each time isn't going to be sustainable. I think all three okatofkrs having some success is going to encourage them to delay starting a new gen. Only losers really want to start a new one.

 

[Dennis8K]

I need Pachter to help me make sense of all this.

Someone get Pachter on the phone.

Pachter!

 

[Dougieflesh]

I think word of mouth has been really positive for both X1X and Pro. Showing off the enhanced games to people who are questioning whether to join the ecosystem or upgrade their existing console is really easy if you have the required specs (4khdr tv). I'm willing to upgrade my consoles from base to the Pro/Scarlet X version every 3 years if they keep making the games look and run better.

 

[Benji]

Indeed this is accurate.

The mid gen refreshes have completely changed the trend and X and Pro have become such a large part of current hardware sales its difficult to imagine any scenario where next gen also does not have a mid gen refresh.

The Pro and X revitalized the current market

 

[Tiago Rodrigues]

Hardware cycles as we knew them, make no sense anymore.
Now each cycle will continue what the previous one started.
I can't imagine a new console not being able to play what the previous one could. Not in 2018.
The mid-gen consoles help as well but not that much. Maybe for the Xbox One X...but not the PS4. Not even Sony bet that much on the Pro model

I'm not sure how much the ratio between the PS4 and Pro are...but i have a feeling that it doesn't interfere that much. Wasn't it something like for each pro, 8 or 10 slims are sold?

 

[justiceiro]

When he talks promotion, he means advertising or sales?

Well, I blame smart phone companies training the consumer to upgrade their hardware almost every year. Now the consoles model can make a hardware look outdated in just 2 years.

 

[Deleted member 5535]

That's for the best and I'm glad we're going to this option.

 

[clintar]

Where is the paint drawing of the analyst chart? Was that chubigans?

 

[Instro]

Hardware cycles as we knew them, make no sense anymore.
Now each cycle will continue what the previous one started.
I can't imagine a new console not being able to play what the previous one could. Not in 2018.
The mid-gen consoles help as well but not that much. Maybe for the Xbox One X...but not the PS4. Not even Sony bet that much on the Pro model

I'm not sure how much the ratio between the PS4 and Pro are...but i have a feeling that it doesn't interfere that much. Wasn't it something like for each pro, 8 or 10 slims are sold?

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Pros at one time made up 20-25% of sales, but that number has has risen over the last year from what I understand. I'm sure someone else could provide more insight though.

 

[fiendcode]

Kinect also did this for 360 to some degree.

 

[DriftingSpirit]

Or, in other words, Team late 2020 for PS5 looking stronger than ever. :P

 

[Betty]

Should those consoles be developed with longer life cycles in mind? Multiple revisions instead of a succesor in 6-7 years, so they have a 10 year cycle like Nintendo?

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Yes, gives devs more time to wring everything out of the console and makes the jump after that gen much more noticeable.

 

[TheGhost]

The way I see it, I'll be buying a Scarlett and a PS5 around the time they launch, stock permitting (will wait of course to make sure there are no red rings or yellow lights of death)

Then I will pick up the Pro and X versions of those consoles. So technically every four years I'll be getting a new console which I'm ok with.

The only difference being....I think the X will continue to be a machine that can handle Scarlett games at lower settings, much like my PC can only handle games at their lowest settings. Far from desired specs but doable. Where the Pro won't be up to that task and your hand will be forced to get a ps5 which I'm sure people here will have no qualms about anyway. I think the original Xbox One and S will be rendered useless however. But by that time the X will be much much cheaper.

 

[Interficium]

Wait till ResetEra finds out that generational hard resets as we knew them are also over.

 

[LiquidSolid]

I think the reason we didn't see Sony go all out with the Pro specs is because it was extremely important to them that they keep that $399 price tag. The prospect of being able to offer a boost in performance at the same price point as the stellar OG launch price was their way of playing it safe.

They want to stay as far away from that $599 debacle as possible, and I can't say I blame them. It worked on me.

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Agreed but I think the lesson to learn from the 1X's success is that the audience the mid-gen consoles are targeted at are willing to spend more money for better performance. So keep the $399 price tag for the PS5 launch but aim a bit higher with the PS5 Pro and launch it at $499.

Anyway, it's been apparent the mid-gen consoles have been a success for a while but it's crazy how much of an effect they've had. The OPs suggestion of having more than one mid-gen console a generation sounds awful though.

 

[Soprano]

Pro and X don't even make up half of sales.

As for console cycles, they'll still be there. MS is already letting us know about next gen. The only difference is it'll blend in more because of backwards compatibility.

 

[Jobbs]

Hardware tech kind of reached a sweet spot with the current console generation where really amazing experiences can be delivered that weren't possible before due to limitations (memory limitations being just one).

Brand new hardware will make things look nicer, sure, but I don't think they'll really allow new types of experiences to be had the way the current gen did. Because of this I think the current cycle could go for a few more years if it wanted to

 

[Marano]

Indeed this is accurate.

The mid gen refreshes have completely changed the trend and X and Pro have become such a large part of current hardware sales its difficult to imagine any scenario where next gen also does not have a mid gen refresh.

The Pro and X revitalized the current market

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It's my guess that the pro and x sell a lot to existing users that want a better experience, so it's not just an expansion of the current market, but also people already invested in these systems looking to upgrade (and I would think this is more dramatic on xbox side due to the bigger gap in power). Of course that doesn't neglect people who would normaly buy a console later in the cycle (the more price conscious customer) as they'd just get the cheaper base models.

 

[Troll]

Good! Mid-gen hardware refresh should be the new standard. I hope Sony learned their lesson and go all the way with the upgrade next-time.

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I don't see that happening. Sony won't make it any more powerful than absolutely necessary. They've outgrown the need to chase after the high end console dollar. The brand is so strong they can bank on a more modest upgrade and it won't matter.

 

[jroc74]

Something to keep in mind about the price of the Pro and One X...

They both cost the same as the launch price of the base consoles. I think that's one reason why MS went for specs that would justify $499. They just saw Sony do it with the Pro.

In all the hoopla of mid gen refreshes...did ppl forget the base consoles got official price cuts?

The mid gens don't cost more, the base consoles are cheaper.

 

[Duxxy3]

Mid-gen refreshes are why I've been concentrating so much on PC.

 

[nenned]

I read this tread title in the voice of Locutus.

Agree with the statement though. Probably continue to see + versions of MS and Sony consoles midway through the gen and maybe hardware refreshes every couple years from Nintendo.

 

[julian]

I'm not sure I understand the point of entirely new systems anymore. If everybody is expecting backward compatibility and there already exist multiple versions with differing features, what's the real difference between calling it a PS5 and a Pro+(or something less.....New Nintendo XL)?

The only real differentiating factor between generations might be the media used and it's clear everybody is running towards digital, so that's going to matter less and less. That is, unless they go the Switch route, or something equally different.

 

[>__]

I'm sure if you drew global shipments for each console PS4 and XB1 don't seem different to previous generations in the basic sense that theres a clear peak before descent. Knowing when the peak is and the gradient after it is the only key differentiator.

Don't agree with this unpredictability at all.

 

[Deleted member 29909]

Wait till ResetEra finds out that generational hard resets as we knew them are also over.

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Maybe once we have solid CPUs.

 

[TheTruthofKayle]

Mid-gen refreshes are why I've been concentrating so much on PC.

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PC hardware change even faster , sure you don't have to change gpu and cpu every 3 years ...but if you don't want you don't have to change console too....7 years is okay for a gen

 

[Duxxy3]

PC hardware change even faster , sure you don't have to change gpu and cpu every 3 years ...but if you don't want you don't have to change console too....7 years is okay for a gen

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I can upgrade at my own pace. I don't have to spend $500 all in one shot. I keep all the games that I've bought for the last 14 years (holy shit that's a long time).

I think my plan going forward will be to get the base Playstation unit every generation, for exclusives, and do everything else on PC. Seems to work fine right now (aside from those damn Gears of War games!!).

 

[zombiejames]

Now, due to the iteratives (Pro and X) and bigger consumer response to promotion, we're seeing those normalized curves be no longer useful. Xbox One sales being up so dramatically in its 6th calendar year, for example, or PS4 setting new records.

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Isn't the PS4 almost perfectly lining up with the PS2's sales pace? Were hardware cycles dead in 2004?

 

[DonMigs85]

Sony better not try to sell me TLOU2 Remastered

 

[LuckyLocke]

I can upgrade at my own pace. I don't have to spend $500 all in one shot. I keep all the games that I've bought for the last 14 years (holy shit that's a long time).

I think my plan going forward will be to get the base Playstation unit every generation, for exclusives, and do everything else on PC. Seems to work fine right now (aside from those damn Gears of War games!!).

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There's two major upgrades you can do on a PC; CPU (which means changing the motherboard and memory too) and GPU. Both these upgrades are in the 500$ ball park. I don't see how you can pace that down to cheaper upgrades...