GDC 2014 (Game Developers Conference) is underway, so naturally the news is full of feel good stories about video games, especially the recently launched next-gen consoles from Microsoft (MSFT) and Sony (SNE).
Sony unveiled its Project Morpheus virtual reality headset for the PS4 and pointed out that, besides leading next-gen consoles in sales, the PS4 has so far exceeded Sony’s own targets. Meanwhile Electronic Arts’ (EA) new Titanfall — a Microsoft exclusive and one of the most highly anticipated video games for the new generation of consoles — has generated considerable excitement and reportedly boosted Xbox One sales.
Look a little deeper, though, and there is also a lot of not-so-good news.
Going into a crucial post-launch phase for these new video game consoles, both Sony and Microsoft have lost key division executives. Sony’s U.S. Playstation head is leaving after 20 years even as Sony cuts 25% of staff from its North American game studio and axes a new PS4 title under development.
Microsoft, meanwhile, suffered the indignity of having its Xbox chief — the guy who has led all three Xbox projects and launches — announce he was quitting just days before he was scheduled to talk about Xbox One’s leadership among next-gen consoles at GDC 2014.
Despite the fact that brand new consoles launched over the holiday season and gamers would typically be snapping up video games to play on them, sales of video games in the U.S. were down by 26% in January 2104 when compared to 2013’s numbers.
Flashy new next-gen consoles notwithstanding, this is beginning to look like an industry in crisis, not a problem specific to Nintendo’s (NTDOY) struggling Wii U. We’ve compiled a list of three threats facing video game consoles.