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Game over for consoles?

BIG DROP: Sales of home consoles like those from Nintendo (pictured) have declined, from 18,500 units in the first half of last year to 9,000 in the same period this year.


    Nov 12, 2014

    Game over for consoles?

    THESE days, it is common to find train commuters with their eyes glued to their mobile devices, playing games. But ask them if they have a dedicated gaming console and you'll likely draw a blank.

    "I do not spend money on gaming consoles or devices any more, after I got a smartphone," said polytechnic student Koh Hui Qi, 19. "With a phone, I can do more than than just play games, although the mobile games may not be as good as console ones."

    Consumers like her have dented game console sales here, with numbers halving.

    In the first half of this year, about 7,000 handheld console units - including the Nintendo 3DS and PlayStation Vita - were sold, according to market-research firm GfK. This is about half of the estimated 15,000 units sold during the first half of last year.

    Sales of home consoles - such as PlayStation and Xbox models - also declined, from 18,500 units in the first half of last year to 9,000 in the same period this year.

    Some game stores which have been hit hard have closed. Retailers like E3 Distribution have been affected less. Its spokesman said "console gaming still dominates the gaming industry by revenue and we observe a year-on-year decline on a small percentage" for game-console sales.

    Business has been stable for some shops like Qisahn, in part because the store attracted customers from competitors that closed down.

    Soon Qishan, owner of Qisahn, said: "Another reason why we escaped relatively unscathed is that we have also been riding the e-commerce wave. Shops that went under were primarily those which had minimal to no exposure online."

    Qisahn has a website and is on Facebook, Twitter and Instagram. Mr Soon also delivers his goods to Malaysian customers, which has helped to diversify his business and offset slowdowns in Singapore.

    For consumers like Miss Koh, who think a phone can do more than a dedicated gaming device, console costs are an issue. A home gaming console, such as the PlayStation 4 and Xbox One, retails for about $600. An upper-mid-range smartphone goes for that price without a contract. It is even cheaper with a telco deal.

    Besides mobile gaming, which is estimated to be growing 30 per cent annually here based on E3 Distribution's research, gamers are distracted by massively multiplayer online games. The retailer's spokesman said such games are estimated to be growing at about 10 per cent annually here.

    According to Gerard Tan, account director for digital world at GfK Asia, consumers could also be ditching handheld consoles as phones and slates with larger and higher-resolution screens hit the market.

    "For instance, the latest portable console has a display resolution of 960x544 pixels, whereas half of the current smartphone and phablet models have a higher resolution of 1280x720 pixels," he said. "This eliminates the competitive edge previously held by portable consoles."

    While the latest home consoles are dangling new online gaming features such as streaming games, the technology is new, said Mr Soon. "Server and technical difficulties aside, it requires consumers to have a very fast Internet connection."

    To tackle the fall in gaming-console sales, traditional game shops are stocking more lifestyle accessories, said E3 Distribution's spokesman.

    Qisahn, for one, has diversified into selling non-game-related products such as apparel, toys, accessories, membership privileges, as well as Apple gift cards. Still, non-video-game-related sales make up only about 5 to 10 per cent of its business.

    Despite the move away from game consoles by many consumers, there are still diehard fans like polytechnic student Sunny Cheong, 19.

    "You get a lot more in terms of game variety with console games. To me, mobile games are more of a time killer than a source of entertainment," he said.