The year is 2018 and it has been almost five years since the Xbox One and PlayStation 4 were released. With these consoles entering the final stages of their life cycles, the conversation has begun to shift to what a possible next generation of consoles might look like, especially in a more digitally focused market. While many think this could result in full digitization in a PS5 or future Xbox, some are less convinced.
In a recent episode concerning violent video games on his show The Pachter Factor, Wedbush Securities analyst Michael Pachter discussed the inevitable next generation of consoles. In the discussion, Pachter explains that despite more content being available online, the PlayStation 5 and next Xbox will likely include a disc drive. “You kind of have to give a concession to retailers,” Pachter explains, so that “they can at least hold out the hope the consumer will come back and buy discs.”
“So, if you have to buy a console at retail, you can’t say to a retailer ‘Hey, please promote and sell my console but we’re not going to have any games available, so once you sell the console to your customer we’re going to take over the customer and own the relationship, we’re gonna make them download everything and screw you, we’re never going to let you sell a game again.'”
Pachter does make a good point. In a world where more entertainment has become digitized and readily available online, it’s easy to see why one might assume a full transition to a digital platform would be possible. What needs to be remembered is that consoles need to be sold somewhere and retailers often don’t make much of a profit on Xbox and PlayStation consoles. In the games industry, all of the money is in software, so it seems unlikely retailers would be willing to market and sell consoles only to be cut out of the real money making aspect of the business.
Pachter also touches upon the importance of the used game market and how this might impact the use removal of a disc drive. A large number of consumers still engage with the used game market, large enough that at the beginning of the current cycle of consoles, used games were an important point of discussion. “I think used games have some value,” Pachter laments, “some healthy number of consumers value used games.”
“The second reason for a disc drive is, there’s a healthy percentage of consumers – and I’d say about fifty percent – who value the concept of used games, either as a seller, as a trader so they get value back, or as a purchaser because they’re cheap and they want to buy old games.”
While the idea of a fully digital console seems interesting, in the end, the concept would likely end up just limiting gamers and make consuming content more difficult. Whether the next generation has a disc drive or not gamers still have a long time to wait for it. Rumors and reports indicate that both PlayStation and Xbox are still several years away from releasing a new console so until then all fans can do is wait and see.