Strong PS4 Pro and Xbox One X Sales are Changing the Way We Think of the Late Generation Console Cycle

Strong PS4 Pro and Xbox One X Sales are Changing the Way We Think of the Late Generation Console Cycle

The sales model for video game hardware is changing.

Economics is a funny thing. Turns out you can use models to graph and chart all kinds of things including video game hardware sales. But the model might need a little tweaking as the hardware market is changing and the hardware cycles along with it.

NPD Group video game analyst Mat Piscatella said as much following the release of NPD's October 2018 sales figures. According to Piscatella's tweets the "Hardware cycles as we knew them are over." We asked for and elaboration on what that actually means.

"So, the decay curve for hardware sales used to look like a normalized curve. Very predictable changes from year to year. All you really needed was year 1 sales of a new console, and you could predict, using history, what the 5-7 year curve would look like, pretty closely," Piscatella says.

However, "due to the iteratives ([PS4 Pro and Xbox One X]) and bigger consumer response to prometon, we're seeing those normalized curves be no longer useful." Piscatella sites the strong sales of the Xbox One in its sixth year, or the PS4's continued record-breaking run as examples. Essentially, the half-step upgrades as well as new consumer factors are leading to hardware sales not predicted by historical models.

"Basically, you have a normalized curve covering the first 4 years or so, and then it's like a kid took a crayon and just started drawing whatever lines they liked," Piscatella remarks.

Original Xbox architect Seamus Blackley says this trend isn't that weird. In a response tweet Blackley compares the new console generation to the PC and that software superseded hardware. "The change will be if some new tech comes along that's a real differentiator. I don't see anything on that horizon yet," Blackley writes.

Basically, it sounds like we're entering some uncharted territory when it comes to hardware sales. Who knows how this will affect companies like Sony and Microsoft when it comes to planning the next generation of hardware considering these unpredictable models.

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Matt Kim

News Editor

Matt Kim is a former freelance writer who's covered video games and digital media. He likes video games as spectacle and is easily distracted by bright lights or clever bits of dialogue. He also once wrote about personal finance, but that's neither here nor there.

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