Timing is Everything. Apple TV, gaming disruption, and why futurists aren’t billionaires.

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Ben Thompson’s recent piece on how Apple TV might disrupt the console gaming industry was called a “tour de force” by New York Times technology columnist Farhad Manjoo. Well said. Pause to read it now if you haven’t already. I want to build on a couple of important threads from that piece and project them into the future.

To level set, Thompson argues Microsoft Xbox and Sony Playstation are likely to get disrupted in console gaming by Apple TV. Microsoft and Sony have continued to follow customer demands to make better and better game consoles. So now they are locked into making expensive consoles for their high end customers. Meanwhile Apple just announced low level graphic support with their Metal API, coming out with iOS8 and Apple TV later this year. And more importantly Apple also announced game engine vendors will port their products to use Metal. This means games on iOS will be potentially 10x better than those on Android. That’s great for mobile, and for Apple TV which leverages the mobile ecosystem. But games on Apple TV won’t approach console games in performance. Not this year. The catch is the cost structure and ecosystem behind mobile has such scale that annual improvements will eat away at the console gap until it’s gone. This will happen before the next generation of consoles come out since they are on a 6 year hardware refresh cycle.

This is easier to understand in Pacman form:

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One of the best parts of Thompson’s piece is the discussion of timing. Microsoft is often unfairly mocked as being too slow, but in fact Microsoft typically has the right vision but is too early to market. They came to mobile with Windows CE/Pocket PC/Mobile before touch screen technology was quite there. And came to the living room with Xbox before the technology allowed app based TV with $99 boxes like Apple TV, Roku and Amazon TV. Horace Dediu put this in pithy form:

My bank account shows I’m a futurist. And it must be added the success of Thompson’s piece shows how good timing is needed not just for technology, but for writing about technology. Timing is everything. Though for the record my predictions from last year about Apple TV taking over gaming seem right on schedule.

In any case, sticking with my futurist ways, I want to think about what happens after Apple TV has disrupted game consoles. I’ll posit the massive mobile app ecosystem will simply take over the living room. The graphic above is not just about Pacman eating gaming (represented as inky Inky above). It’s about the mobile app ecosystem next coming for large screen home entertainment (pinky Pinky) and then for TV itself (blinky blinky). From my Sep 2013 post on the evils of TV complexity:

So long term, the market for TV streaming boxes will replicate the structure of the smartphone market. Apple TV premium, customized Android clones at mid/low end. Does this box need an app store? Yes, it’s essential. Roku, TiVo and others need to accept reality and go Android to leverage a scalable app store ecosystem. The app store opens up the complete app experience, which as Ben Thompson points out is far bigger than just watching TV. Games and photo sharing of course, but even regular TV viewing will be improved with apps. In particular we’ll gain social. This will let you share comments with anyone else in your contacts who’s watching the game, flashing snark on the big screen. ESPN will like owning their own social network. A pleasant side effect of this imagined future is it will keep MG Siegler’s sports tweets off twitter.

Let’s flesh this out. This year Apple TV gets an app store and game engine support. That means Android/Google will feel compelled to follow Apple’s lead and provide some kind of low level graphic API like Metal to Android. Yes, Android is fragmented and there’ll be lots of hardware problems. But Moore’s law is Android’s friend, not just Apple’s. So by the end of 2015 app stores and better game engine support become table stakes not just for mobile phones, but also for TV streaming pucks like Apple TV, Amazon TV, Roku, etc. This means Roku will be forced to move to Android to get an app store. Think Roku now as Blackberry in 2009. Soon the big mobile companies like Samsung and Lenovo will become successful in the living room by copying Apple TV’s new interface and approach. They’ll bring their mobile economies of scale to bear. So perhaps by 2016 a few games on TV puck boxes will break out as better than those on dedicated consoles. At that point even hard core gamers will see the writing on the wall. What will also happen is the “jobs to be done” for TV screens will shift. TV screens will become a way to share app viewing to an entire room. Music, movies, games, TV shows. All just apps. In fact, the app version of TV will be better than current TV, due to social commenting. This doesn’t mean the TV cable bundle will necessarily go away, as I’ve written about here. But it does mean we’ll see the living room experience move to an app centered model, mirroring mobile.

Apple TV disrupting game consoles is at least widely discussed. In contrast I can’t recall anyone making the broader claim that TV streaming pucks will directly replicate the smartphone ecosystem, with the same app model and market structure (Apple premium/Android everything else). Though I’m sure some people are thinking and writing about it. The internet is a big place. The point being this speculation may be wrong, or perhaps the timing is off. After all, if I knew the timing…..

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Footnotes/extra links:

  • An ironic proof of how disruption works comes from a recent Accidental Tech Podcast (recommended).  As a console gamer, John Siracusa pointed out the market for $60 console games is not going away. So he was suspicious of Thompson’s piece. Siracusa is a very smart guy (worth following), so of course his suspicion is precisely the point. Sony and Microsoft are locked into serving high end customer needs like his. So they can’t go down market with the new TV puck/app store approach. By the time Apple TV has parity to console games, it will be too late to enter the market.
  • Moisés Chiullan, Ben Thompson and Guy English did an excellent follow on podcast to Thompson’s piece. Partly in response to the discussion from the ATP podcoast above. Worth listening to.
  • Disruption is one of the most widely abused terms in technology. My disruptive soap gets me twice as clean. Disruptive soap. Sloppy way of saying improved product. Disruption in Clayton Christensen’s sense has a narrow technical meaning. Apple TV and gaming is the rare case where it applies. So while this recent wholesale critique of disruption is over done, I found it well worth reading and a solid corrective to disruption hype.


By Nathan Taylor

I blog at http://praxtime.com on tech trends and the near future. I'm on twitter as @ntaylor963.


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