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The Seemingly Insurmountable Challenges of the Ouya and Steam Box

by fullicide-SD   //   2:54 AM on 02.13.2013

Hi guys, it's been awhile and I just wanted to stop by and ask for your help. I've been extremely busy with not only working on the website but typing up a blog for debates in another community. However, the dtoid community, you guys (and girls :P), have honestly been the best at giving incredibly thoughtful critiques and responses which means a lot to me. I hate the idea of posting the same blog in multiple places unless it's something simple. I worked on this piece for three days though, and while it's not entirely reflective of my own personal opinion, it still means a lot to me because of all of the time I invested in putting it together, so for those of you who read it, you have my deep appreciation.

The blog follows below the line but there are a few other things I wanted to share with all of you. First, how are you guys?! Occam, Phil, Elsa, Strider, everyone, how are ya! I've felt very restricted with how much I've had to focus on lately, it feels nice to give my brain a rest tonight. For the next month and a half I'll only be floating around in comments until the site has it's grand opening. Need to make sure everything is done properly and in a timely manner. Once it launches there will honestly be more time to join you guys in discussion online. Sadly, til then, gotta make sure I have a paying job and soon!

I'll probably be able to throw together quick snipet blogs about lil things I wanna talk about here and there but nothing major like I prefer...ummm, other than that, Dead Space 3 was honestly really good. I think a lot of people were deterred from it because of the microtrans and less horror more thriller theme but as a big Dead Space fan, it's still great. Gotta play the Coop before I can write up a proper review. Finally finished the walking dead game and holy hell...that's all I'll say about that. I also have to get back to practicing StarCraft if I hope to improve...Hope to hear from you guys!!


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***NOTE: This is three blogs worth of content. If you feel like it’s too large a read, it’s divided into three sections that are each a blogs worth of reading.***

The premise of this blog was to debate which console will potentially thrive in the eighth generation of hardware, with a focus on the Ouya and Steam Box. I volunteered to write for the potential downfalls of both systems.

• The Overall Problem

No matter who plants their flag as a member of the eighth generation of home gaming consoles, they face an uphill battle, one that is already weighing heavily upon Nintendo, Sony, and Microsoft. Console sales are down across the board, and while it’s easy to blame the unusually long life cycles of the Playstation and Xbox, Nintendo isn’t so lucky. The Wii U had a release year that could be likened to more of a muted thud as opposed to a clap of thunder, which an anticipated product launch should have. Even though sales for all three consoles rose over the holidays, those numbers didn’t reach the same figures of years past. Since 2012 began, there seems to be an over spoken momentum going against any company who would like to war over your living room.

Much of the doubt came out of a rather compelling argument from DICE 2012, delivered by Ben Cousins. In his 26 minute presentation, Cousins gave several pieces of data backed evidences showing major declines in the console industry and major rises in other mediums such as free to play, social, and mobile gaming. The mobile side of things is not in Nintendo or Sony’s favor either; their divisions have taken a hit as well. Even with the release of the powerful and alluring 3DS and PSVita, customers aren’t buying into the products like they used to.


[Controlling interests of the industry are drastically reshaping...]

One powerful theory that has helped us determine the trend of when people purchase a product is the Diffusion of Innovations theory. It is a bell curve that shows when specifications of types of people buy a product and where products experience peak and declining sales. According to said scale, there are five distinct groups that a consumer of a product falls into: innovators, early adopter, early majority, late majority, and laggards. For this piece all we really need to focus on is the innovators, the early adopters and a new reference by many referred to as “the chasm”; the rest are just ninnies (they’re not actually ninnies, they just don’t serve a purpose for the theory…and I really had an urge to say ninnies).



The chasm is a new variation, proposed by a few, basically stating that there is a large gap of early adopters, plus innovators, that is required to boost the new tech into larger sales. Now, whether or not you want to buy into the reference of a “chasm”, what’s important to note is that there is a shift in the number of people who buy a new tech early in its life cycle. Obviously these references to products and tech directly correlate to anything like the PSVita, 3DS, WiiU and any consoles that have yet to come with this generation.

It’s unclear whether there has been a lack of innovators purchasing the new products or if more early adopters are required these days for a product to reach a peak where the majority of people start buying in. What is clear is that more people are hesitant in putting their money into new technologies, and all consoles are on the losing end of that cautious behavior.

No matter what your preferred price is, we all already have a lot of technologies at our finger tips, and more are being announced and released every year. We’re being told that the new announced techs are highly innovative, yet most aren’t. It’s no wonder this would give many pause before purchase, even swaying some from their early adoptive tendencies. Worse yet, while the challenge the big three faces seems to be growing larger, it undoubtedly makes it harder for Ouya, the Steam Box, or other new entrants, to find ground to stand on.


[These guys have a massive challenge ahead of them...]

[Fun Fact: Call someone a Laggard as a counter insult. They’ll probably think you’ll be referring to lag, but you’re just calling them a person who buys a product super late. Chances are they’ll just start firing insults out of frustration, and you can just laaaaaugh.]

• The Ouya’s Challenges

This will be the first console that will have a yearly hardware update, and it could be that one detail that breaks the console’s sales. Ouya owners won’t be required to purchase every new console as each will be able to play the same games. The purpose of the yearly life cycle is to continually update the hardware to allow access to better processing power and graphics if players desire it. Eventually though, all things are outdated. Some of the games that will be available for play will likely stop being available for lower end consoles, but how fast could such a trend take effect? 3 years, 5 years? Not every Android game works for every Android phone. After all, Alex Rubens of PC World said it best, “Android OS is known for being very picky about the specific type of hardware that the user has. An application might work perfectly on one phone, but not at all on another, simply because of the onboard video card.” There has been no evidence contrary to the point to suggest that these problems wouldn’t persist for the Ouya platform as it upgrades its hardware (or in general), and some games could require a system upgrade if you really want to play them.


[Their supposed "Cadillac of Controllers" looks pretty awkward.]

The prevalent issue of the Ouya’s hardware doesn’t just stop with constant upgrades. There has been much debate on whether the specs are worthwhile or [url=]http://www.lazygamer.net/general-news/why-the-ouya-will-fail-according-to-kevin-dent/if they’ll lead to the Ouya burying itself[/url].

No matter what side you land on, no matter if you interpret the internals as bad or good, there is a particular issue to them. There is a specific time when specs matter and ways a lack of power can be compensated for.

When the headliner consoles of the seventh generation launched roughly eight years ago, there was a big debate as to which console had superior hardware, Xbox 360 or Playstation 3? The PS3’s initial titles were fairly unimpressive by comparison to those that launched within the 360’s first couple of years, making the 360 an easier sell for those first few years of the generation. Eventually the PS3 was able to turn things around with developers becoming more able to tap its powerful hardware, and the two kinda stand on equal ground now (at least in sales). Yet, power late in the game, even though it has caught the company up from being behind, doesn’t really matter this late in the game. It mattered when one console threatened to knock another out of the competition, and that’s the launch window Ouya has placed itself in.

By comparison to the rumored specs of the next Xbox and Playstation, the Ouya is severely underpowered which would make it incredibly easy to show up at the beginning of a console cycle; the ideal time for any competitor to be shoved aside. While hardware specs have often not mattered in circumstances between the PS2, GameCube, and Xbox, and the aforementioned PS3 and 360, these examples have always occurred when every system’s internals were on par with one another. The situation the Ouya will create for itself will have few, if any, considerably new games. None of those games for the first version of the console will be able to compete with next gen games that we’ve already seen like Watch Dogs, or 1313.


[Yes dear, you can have Minecraft, but only if you're good!]

The reason the Wii was not only able to compete, but thrive in comparison to its little brother’s of the industry was due to its uniqueness. Even without beefy specs, Nintendo’s previous console was a tremendous success because it brought something COMPLETELY NEW to users. Ouya does not. It’s offering to bring in games that we’ve already seen on consoles, games already offered on phones, and Minecraft, which is on PC and 360. Making matters worse, some of these games aren’t guaranteed!

“Amassing enough demand to warrant porting Minecraft to Ouya will be an uphill battle to climb, too. The Kickstarter has surpassed 35,000 backers, a portion of which are developers. Even if that number continues to grow before the Kickstarter ends, that is not a particularly large install base for a console. This leads to a chicken or the egg-type scenario: a console needs games to sell itself to gamers, and a console needs a large audience for developers to be interested in making games for it. While we don't know the details on what other funding Ouya has, it turning to Kickstarter to help fund development of the console and some first-party game development doesn't suggest it has the capital needed to pay developers to bring games to its platform at launch. And if it can't do that, it may be dead on arrival.” (Chris Periera of 1up.com)

With the idea of uniqueness, some would fall back on the Android based consoles open structure. However, open structure which allows for modding and homebrew also allows for piracy, and it’s nothing new. It was one of the major theorized issues that plagued the PSP in its early years, and developers hate having their s#!^ stolen. The Ouya’s creators have made some broad claims that piracy won’t be a problem as “all paid content on the device would require authentication, there was an extra element of security integrated into the platform to help prevent piracy.” To many, that answer simply won’t be enough, and the issue of piracy has yet to be rebuked. Many enjoy Android games on their computers now and soon, they may enjoy any exclusives the system will have.

The Ouya relied on Kickstarter because it couldn’t front the money of its own accord. This is a one shot deal, and if (or when) it fails, it has failed permanently.

• The Steam Box’s Challenges

Much like the Ouya, the Steam Box also presents a first for high end tech consoles. VALVe’s Gabe Newell informed the Verge that the Steam Box will have three varying hardware specifications for their hardware:

“Newell also tipped Valve's hand on target pricing for Steam Boxes built by partners, saying that the company sees three tiers of hardware specifications: "Good, Better," and "Best." He says the goal for a "Good" platform is a free device, but that one would probably start around $99 and eventually come down. Newell says a midrange device should cost around $300, and that the top-tier is only limited by how much someone is willing to spend.”

This is a decision that is reminiscent of when Sony and Microsoft announced that there would be variations of the consoles. The differences for the PS3’s and 360’s were only in aesthetics and digital storage capacities of the consoles; everyone knows this. What may have been forgotten was the initial question that came to mind: “Will there be a difference in processing or graphics for each unit?!” The swift and comforting answer that followed soon after was that there would be no difference, but it didn’t end for those who worked in retail.


[Holy hell, options?! But we've taught the world to be indecisive!]

I spent a lot of my early twenty’s working in retail, and of course, part of that was working in the electronics section. One of the questions that customer’s constantly raised with concern was if there was substantial difference between the consoles? It was easy to just explain the differences, reassuring them and helping them with information or into their purchase. These were fairly obvious instances of consumers who could be considered causal gamers, parents, or those who were just getting into gaming. Whether you’d like to accept it or not, a statistic from The National Gamers Survey 2010, preserved through Gamasutra, states “33 percent, or 46 million, of casual gamers play titles on all three platforms.” Whether you hate the classifications of gamers or if you don’t mind them, it’s the casual market that helps push console sales even if they don’t help game sales.

That casual side of the market is pertinent to helping a console reach critical mass in sales, as that consumer group consists of some early adopters, early majority, and a lot of late majority buyers. Making it harder to choose which version of hardware to buy is a major deterrent, making it even more difficult for the Steam Box to reach that casual crowd.


[Most who enter a store and ask questions about different electronics generally don't know what they want, making it more complicated for them is generally poor strategy]

The lowest level, “free”, Steam Box will likely be underpowered in comparison to eighth gen hardware and potentially some seventh gen hardware. Unlike the Ouya though, the Steam Box isn’t offering anything considerably different. Ouya at least offers the ability to bring Android power to your Tv, even if it faces a plethora of issues. The Steam Box is bringing Steam to your Tv, which is nothing new if you know of the overabundant number of ways to connect a computer with a Tv. What does this really make of the varying types of Steam Boxes, especially since the system will likely offer no physical games?

“How is Valve going to sell the Steam Box? If it’s sold solely through online channels, that’s a tall order for most consumers. Purchasing a new computer online is harrowing enough, even having a rough idea what to expect. However, trying to convince customers to spend $1,000-$1,500 dollars on device without really getting a chance to use it (or even see it in person) seems a bridge too far for mass market consumption. The Steam Box as currently thought is going to be so unlike anything on the market it doesn’t seem likely that the mass appreciation for it will come without it being available in stores like GameStop, Wal-Mart, and Best Buy. Those retailers might not have a reason to carry the hardware if accessories (typically the highest-margin items available for a console) are nonexistent. It’s even less likely to happen if it winds up being a digital-distribution-only device (the odds of which are 99.9%), as retailers would basically be cutting themselves out of the market by selling the Steam Box.” (Mark Price, VGRevolution)

While received with certain dismay, the next Xbox will supposedly allow players to play games during game installs. With Steam, the user has to download the games before they can play them. There's no word on physical options, so if retailers will sell the Steam Box in store, it will be significantly less appealing sitting next to other consoles with libraries of games that can be played as soon as the system is connected to a Tv. Of course all of this only speaks to those who would consider purchasing the product in a store.

Steam, the software itself, has amassed quite a following of roughly 50 million users, and around 5 million concurrent active players. Those are big numbers, but when compared to only one generation of two consoles, it’s fairly unimpressive.

Account Name | Date Launched | Number of Downloads versus Consoles Sold:

Steam | September 12, 2003 | 50 Million
http://www.pcgamesn.com/article/steam-has-50-million-users-5-million-playing-concurrently

Xbox 360 | November 16, 2005 | 76 Million
http://en.wikipedia.org/wiki/Xbox_360#Sales_by_region

PlayStation 3 | November 11, 2006 | 77 Million
http://en.wikipedia.org/wiki/PlayStation_3#Sales_and_production_costs

Both systems have exceeded steams number of downloads in less time, both topping it’s downloads by more than half. Moreover, Steam is a free download, while you have to pay for almost all of the games Steam has to offer, consumers are required to purchase the Microsoft and Sony consoles for a substantial amount of money, and the prices of games aren’t cheap. All three current console’s games must be played on their dedicated systems, but Steam is already on PC, giving little need to purchase the physical console. It makes the idea of the product seem like a luxury item.

I respect Gabe Newell and all he has to offer in this industry, but it seems unwise to be underestimating the current leaders of the console industry for a company that, technically, isn’t participating yet.


[Worrying about Apple now is like worrying about everything that could happen to you in an RTS all at once. You lose your concentration, you forget what you should be focused on, and you often, just, lose.]

What about the controller that could potentially reshape the game?

“Valve wants to give gamers something different than the motion controls that Nintendo, Microsoft, and Sony have raced to create in recent years. Newell told us that he’s not particularly impressed with motion control, and that Valve wants to take advantage of advances in technology that can allow games to respond to your body in deeper ways, like adjusting the flow of a game based on your emotions.”

That’s all well and good, but it means absolutely nothing until it’s proven. We’ve heard the same story from patents for controllers, the Move, the Kinect, sensors that you could wear on your head, and many more. All excited the masses, and very few have had success, and that really depends on what you call success. Worse yet, what’s VALVe going to do, divide their customer base?

There will be customers who won’t have interest in purchasing the Steam Box, but would still like access to all of the great games the service has to offer. So does VALVe allow the controller to be compatible with computers, or will it be exclusive to the console, with any games that require the controller’s feedback tied to the hardware? Either way there is a loss. Do you force consumers to buy your console which could be a $300 and up purchase? How much will the top-tier console be? If it’s supposed to be comparable to high end PC’s, why would you force someone to make another investment like that? If there are no exclusives to the console, then you’re also shooting yourself in the foot! It’s hard not to see a win-lose situation in all of this.

If sales of the Steambox don’t flop, the console stands to make its way into the industry much like the original Xbox did. It was super powerful and with a few, very notable exclusives, the original Xbox was able to place Microsoft’s flag as a member of the industry. To do so however, Microsoft had to invest millions, taking a substantial loss just to get their stake in the business off the ground. Phil-Harrison, a truly powerful and intelligent member of all things in gaming said:

"Entering the hardware business is a really tough business," he said. "You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale.

They can be successful at small scale. But it's very rare for a new hardware entrant to get to scale, and I mean tens or hundreds of millions of units. There are a very small number of companies that can make that happen.

And it's not just having a great brand or a great software experience. It's about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It's a non-trivial problem to solve and it takes thousands of people to make reality."


Harrison went on to express his respect for VALVe as a company, wishing them the best of luck and no ill-will.

• Wrapping Things Up

Every console that will ever be really should watch its step. This is a truly volatile industry, and underestimating the competition, or being over ambitious often creates a successful formula for being bitten in the ass.

It’s worth noting that the content of this article does not fully reflect my opinion on any of the consoles or company’s situations. I tend to be more positive in analysis but I wanted to help out with this debate, so, for those purposes, these were the conclusions I was able to draw with information sources I weeded through. Honestly I’m normally not one for conjecture on these matters. If anyone desires, after the debates are over, I’ll gladly disclose my full beliefs on the current state of affairs for all industry leaders.

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Again, thanks for your thoughts and opinions, and tell me how you guys are doing, and if it's your first time commenting on my blog, lets chat, tell me about yourself...

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