PC vs Console: What Makes them different?

What makes a console? What makes a PC? There is no special chip or hardware that distinguishes the two. Rather they are terms meant to highlight fact that both PC and consoles solve different problems of gaming. Each having a different answer to how we should distribute games and how to make the hardware for playing those games.

Making Hardware for Games

So how do make hardware for games? Well, generally consoles are specialized specifically for gaming needs. Focusing on higher processor speeds and graphics card for the cost. Like being able to choose a processor architecture based on performance rather than having to take in account non-gaming related software. Or creating controls that only focus on gaming tasks, and not having to worry about typing or other tasks. But its more than just good specs, or specs per dollar ratio. Console uses unified hardware to distribute the games. Basically, having one (or very few) hardware device(s) and having all games tailored to that device. This allows for the underlying game programming language to take in account fewer device configurations. Which means games require less testing and run commands faster. Leading to better performance and allows for mass production, leading to lower costs.

While PC devices focus on ambiguous hardware. Allowing for the ability to upgrade hardware. And allows code to run on more devices to hopefully reach a wider audience and allow developers to take advantage of more hardware when developing games. And take advantage of it earlier. Allowing new ideas on how to use hardware for different play models.

How to Distribute Games.

Distribution asks “Who is allowed to develop for that device?” and “What Obstacles are needed to overcome for your game to be published?” Consoles usually focus on a single distribution channel. Allowing for more control over what games get published. There is generally more risk in developing a game for this system. Licensing, and publishing fees eat into the profits, With higher startup costs to ensure you meet a minimum standard of graphical fidelity and Quality control. Creating this standard can discourage new developers or publishers, but it can also entice them. If your game gets published, its easier to find, and potentially has a larger audience than if you tried to a more open distribution channel. And your game may look better as part as curtailed library of games.

While PCs focus on an open distribution models. Allowing anyone to create a distribution model for there game and join a part of one. It could be as simple hosting your own website, or burning CD and selling your game from you home or at gaming events. To something like trying to sell your game to a professional publisher. There are still various obstacles to overcome in the PC market, but there is a variety of different choices you can make when deciding on which distribution channel you pick. You''re able to decide how much restriction on your game quality is acceptable and which system you the think will get you the most coverage and/or gives your game the best chance of succeeding. You may still be limited to what the distributing site wants, but you still have quite a few choices.

When Will the Line Between PC and Console blur until they're indistinguishable?

I'm not sure its really a “when”, more of an “if”. Consoles and PCs have been moving towards each other for quite some time. Console have been becoming more open with there distribution channels. Trying to appeal more to 3^rd party developers. While increases in technologies have made the performance advantages of consoles, less and less important. Forming a kind of hybrid, where Consoles are taking more roles traditionally associated with PC, and vice a versa. But before they become one, we have to answer which method is better.

For instance, its a little difficult talking about the advantages and disadvantages of open distribution, when I have a bias for open distribution. I would gladly go through hundreds crappy games, to find that one game that I would of not have found in a closed distribution channel. On the other hand, I'm sure there are people who would give up one higher quality game, for a higher average quality of games in a system; or not having to find a game under a certain threshold of quality. In order for consoles and PC to merge, we have to pick which way is the right way. But what if there is no right way to find games? If there a reason to appeal to both people types of people, in separate ways, maybe they should remain separate. Or can we find a way to combine the advantages of both without adding more problems or disadvantages?

Will the lines blur?

Consoles and PCs have problems that could be solved without radical changes. For instance, Consoles have opened up to Indie developers more, by allowing digital distribution and smaller fees for smaller studios. However, smaller Indie developers (like teams of less than 10) might be attracted to a profit sharing model with no upfront cost. Console maker could offer both models to attract both smaller and bigger teams. If they really are committed to the idea of attracting Indie developers, console makers could create a really solid IDE and release it for free or perhaps for a small increase in profit share. It is a big upfront cost for the console maker who does it, but attracting new games and IP might be worth the cost.

On the PC Side, We have seen a very fractured distribution system. However, steam has unified this process significantly. Maybe just having one large repository of games, like consoles do, doesn't exclude smaller distribution. Perhaps what we need is one unified interface, that allowed user to add and delete gaming repositories. Similar to what Linux does for its packaging system. Now, you have one applications that can install, search, and buy games. And if you thought the search results were to board, you could remove repositories as need be. Customizing the amount of curtailment you want.

While there has always been a variety of APIs for cheap or low cost on the PC side. I have noticed the idea of a programming language that can build native applications off of one code base, spring up. I'm fond of Haxe/NME due to its free and open nature. However, unity is a very similar system. Perhaps this will create a system where code base is irrelevant to the desired platform. Or, at least only relevant in terms of controls and display output. Of course, I thought the code once ideals of Java would be the language of the future, and that really never panned out. And there are certainly lots of competing ideals of how to program a game. HTML5 might be the next big thing in gaming. Maybe OpenGL will get good enough to solve performance and other issues to make cross OS programming as viable as native coding.

Also, The Steam box and ouya might question the benefits of closed hardware with their ability to allow hardware modifications. Perhaps having a default configuration will allow for the benefits of unified hardware while providing support to hardware moders. Or perhaps its openness will invite the same problems that PCs face. It depends on how large of a percentage of people will actually modify the default hardware configuration. And if these consoles will provide the benefits of upgrading without becoming overwhelming for developers to test.

Apple, Android, and more

How do android and apple tablets and phones fit in the mix? Are they PC or consoles? Well, They're both and neither. PC and Consoles Roles can be thought of more as a scale than absolute terms. Apple iOS leans more towards a console. It has a limited amount devices, not one unified device, like a traditional Console, but they are all very similar devices. The distribution is very limited, with only one method to distribute apps (that being the app store). Although, it is more open than traditional console system. As there is a publicly available description on how to distribute your apps, and allows anyone to join for a fee. It could be consider low cost compared to other, only $100/per year. (Plus the cost of a mac computer, of course). While the android has a more diverse set of devices, but still fairly limited compared to a traditional PC. And a much more open distribution system. It not only allows you to publish through your its Google play. A very similar system the app store, but with less obstacles (i.e. 20 one time registration fee). But you can distribute apps through existing methods. Such as allowing people to download files from a website or transferring files from your computer or an SD card to the device.

I bring this up because it's important to remember that that while both PCs and Consoles have there advantages, there no need for a system to commit fully to either one side or the other. You could choose a system that is in between both ambiguous hardware and one device. Between a limited distribution system, to a completely open one. Or even a moderate system for the ambiguity of hardware, but a completely closed distribution system, or completely open, etc. There are lots of ways to look at how you distribute games and how you make hardware for game. You shouldn't think of it as just PC, Console, and in just between.

Why does this matter?

Whenever the PC vs Console debate comes up, there is always people who argue, thats it an unimportant. That games should be enjoyed no matter what system there played from. But I feel like that argument misses the importance on how games are made. (And also the economic limits of most gamers). I think a better understanding of the system of distribution and hardware making, leads to better systems of games. And you achieve that understanding, by finding and discussing each systems flaws and advantages. In a civil manner of course, but how to argue is discussion for a different time.

The Secondary Market's impact on New Video games sales (and the benefit used video games provide publishers).

Abstract
In this article I wanted to examine the benefit that used video games provide publishers. And whether the benefits of used video games significantly help the sales of video games.  I look at various studies and determine what factors impact video game sales.

Introduction
When you allow a durable good to resold, this will impact the price the buyer is willing to pay, because “The more opportunities to resell, the higher the price first period consumers are willing to pay, since they can resell the good after they used it”.(Cayseele, 1993)  This allows publishers to make more money, because they can charge more for games, and it allows consumers to buy more video games.
Used video games sales do provide benefit to the publishers, but does that benefit translate into more revenue? Well, it complicated.  There are a variety of factors that determine if a publisher can increase its profit from used video games.  These factors are the amount of commitment to future production, superiority over secondary market, durability, consumer preferences, and concentration of the primary market.(Chen, 2011)  So let’s hit these factors individually shall we.

Commitment
There is the dynamic competition between the products price and the product's future self.  Prices will eventually drop and consumers may decide wait until the price drops before purchasing a product.  “Without secondary markets, Coase (1972) famously pointed out that time-consistent firms will be hurt by their inability to commit to high future prices … forcing earlier decreases in prices.”(Chen, 2011) However consumers can anticipate price drops in secondary markets which can cause pressure to lower prices in the primary market.(Chen, 2011)  It’s a complicated relationship, but it appears the secondary market helps more when you commit to higher prices for longer periods of time. “When firms cannot commit, opening the secondary market exacerbates the dynamic competition between firms and their 'future selves.'”(Chen, 2011)

Superiority
Good Games sell better than bad games.  Pretty simple if used products are inferior to new products “this, in turn, induces high-type consumers to return to the primary market”.(Chen, 2011)  However, one it’s a little more complicated if you consider limiting your features/quality in order to create planned life-cycles for the product.  Decrease the current quality of your product in order to release superior products in the future.  This works to a degree, but shorter lifespan will often lead to consumers paying less for new products. (Chen, 2011)

Durability
Durability is the length of period a product can be used before it breaks down.  How durable an item effects of many of those items can be resold and compete with the primary market.  “Although used goods create competition for new goods, a manufacturer would benefit from a well-functioning used-goods market increasing the willingness of consumer to buy new goods easy to resale.”(Prado, 2009)  Make the products too durable and there is too much competition in the secondary market.  Make them too nondurable and you're bound to decrease the price consumers are willing to pay. Also, how active the secondary market also plays a role into this balance. “...when the secondary market becomes more active, firms have a stronger incentive to make their cars less durable.”(Chen, 2011)  It's unclear how much durability affects video games.  While lower durability¥would decrease the supply in the secondary mark, 90% of new games are sold in the first three months. (Zatkin, 2001) So there may not be a way to impact durability enough to increase sales.

Consumer Preferences
Some people just like to buy new products; you can call these high-value consumers.  While others only cares if the product works, let's called them low-value consumers.  Your preference will probably determine which market you're more likely to buy from. And it seems there needs to be a certain amount of people who want to buy new products (high-value consumers), in order for the secondary market to be beneficial.  And the less high-value consumers convert to low-value consumers, the better the secondary market is for the publisher. “When the time-varying component of preference heterogeneity becomes relatively more important, the distinction between high- vs. low-type consumers becomes more blurred...so that firms are hurt more when the secondary market opens”(Chen, 2011).  It's a complicated relationship, if too many high-value consumers than high-value can't return to the primary market as often, too little high-value consumers, and the publishers are less profitable.   Publishers may have little influence over the consumers' preference, but it is something to take in account when assessing market structure.

Concentration of Primary Market
How much units a publisher is something to take in consideration.  “... (An) increase in aggregate output also implies an increase in the stock of used goods, which exacerbates the negative substitution effect of opening secondary markets.”(Chen, 2011) Of course, there are other options to increase the concentration of the primary market besides limiting your production.  You may also be able to increase the price of the new market by the increasing renting games and buying back stock.(Prado, 2009)  Decreasing the used market will help stabilize or increase the price in secondary market which will allow the primary market to maintain higher profits. “Following disturbance disequilibrium in one market, a short-term effect of arbitraging creates a temporary obstacle to price movement and a move on the other market on the same direction. Then, on a second period, the second-hand market’ disequilibrium slowly liberates constraints of an equilibrating price movement.”(Prado, 2009)

Conclusion
It's quite apparent that video game publishers receive revenue from used video games sales.  The relationship isn't very straight-forward, but the secondary market allows consumers to buy more new video and more often.  There are certainly a variety of factor to consider when trying to make the secondary market work for publishers. Also, an environment with no secondary market may be more profitable than an environment with secondary market (depending on factors mentioned above). Of course, the secondary market has more impacts on publishers besides profits. Such as increases the audience that plays your video game.  And impact on consumer wealth. “The growth of any second-hand market increases overall economic welfare...regardless of whether these markets stimulate demand for new goods.”(Thomas, 2003)

References
Cayseele, P. Van “Lemons, Peaches and Creampuffs”: the Economics of a Second-Hand Market  (1993) ideas.repec.org/p/ner/leuven/urnhdl123456789-119012.html 
Chen, Jiawei, Susanna Esteban, and Matthew Shum. "How Much Competition is a Secondary  Market?." (2011): www.hss.caltech.edu/~mshum/papers/nonlq.pdf
Prado, Sylvain Michael "A Family Hitch: Econometrics of the New and the Used Car Markets"  (2009):  economix.fr/pdf/dt/2010/WP_EcoX_2010-04.pdf.
Thomas,Valerie M. ”Demand and Dematerialization impacts of second-hand Markets” (2003):  eclips.gatech.edu/files/articles/eclips_demand_dematerialization.pdf
Zatkin, Geoffrey. "Insider Insight: Awesome Video Game Data" PAX 2011. EEDAR. 1400 Sixth  Avenue, Seatlle. 09/04/11. In Person.