Making new gaming consoles that are backwards compatible with software from previous generations isn’t easy. It’s also not always financially prudent for manufacturers. Prior to the 8th generation video game consoles, however, backwards compatibility was the standard, largely to appease consumer expectations. But after omitting this feature at the launch of 8th gen, console manufacturers are bringing backwards compatibility back with their 9th gen consoles, and the timing couldn’t be better for consumers.
Ever since stay-at-home lockdown orders began to take hold in March, video games have taken center stage. Perhaps better suited to withstand the impact of the pandemic than other media options, like the motion picture industry, the video game industry has thrived, posting record growth in terms of engagement and revenue. The category has also facilitated personal connections in ways that others can’t, even bringing more to the table besides games, such as concerts and serving as a platform for movie previews. With people suddenly looking for more ways to fill a surplus of indoor hours, while connecting with the outside world at the same time, the perfect storm of the pandemic has bolstered increased adoption and retention.
Ironically though, while the COVID-19 pandemic helped to boost the popularity of the video game category, it has also hindered the industry by disrupting development cycles for upcoming games and causing many delays, impacting supply chains for the new 9th gen consoles, making them even harder to acquire than usual, and depleting consumers’ available funds for leisure spending.
So as autumn begins and gamers anxiously await the year’s most anticipated fall releases (see full list below), software is playing a more important role than ever. The video game medium is riding a wave of popularity due to the pandemic, and the launch period for a new console generation is key. As the old adage says, you never get a second chance to make a first impression. Sony and Microsoft are eager to set as compelling of a launch line-up as possible to help convince gamers that theirs is the device to buy, be that through new titles, a new subscription-based ecosystem, or even backwards compatibility, which helps tide over cash-strapped consumers.
Sony has confirmed four titles so far for the launch of PS5, two of which were on Nielsen’s list of Most Anticipated Games for fall 2020 (Marvel’s Spider-Man: Miles Morales, and the new remake of Demon’s Souls). The delay of Halo: Infinite to 2021, due in part to COVID-19, takes some of the wind out of the Xbox’s 9th gen launch, leaving Crossfire X as the most anticipated new release to carry the launch of the Xbox Series X/S console in the holiday period of 2020.
But the transition to a new console generation, already a tricky proposition given the manufacturers’ need to balance promoting new devices without alienating current console audiences, becomes even more challenging in a pandemic. Many consumers are reeling from the economic impacts, while supply chains are stymied as well. And while decisions about transition plans were made before the pandemic took hold, they’ve become even more fortuitous for consumers in the context of the pandemic.
First, the devices touting a return to backwards compatibility provides some relief. Gamers hit by the economic downturn may not have the funds for a new console. Others may only have enough funds for the console itself and not a bevy of new games to go with it. Backwards compatibility provides gamers the opportunity to still play their current library of games on the new device for the time being, with some games perhaps even benefiting from up-scaled resolutions. Similarly, consumers can rest assured that if they cannot afford a new console right now, but still want to pick up some new games for their current device this holiday at least, the games they purchase for their 8th gen device now will be playable on the 9th gen platform once they’re able to buy it.
Video game makers are stepping in to facilitate this transition in other ways too. Microsoft is offering its ‘Smart Delivery’ plan for certain games, which allows consumers to buy the Xbox One version of a game now, and then also get a version for Xbox Series X/S once they upgrade their console later on. Though Sony does not have a branded name for its software upgrade plan, it is also offering free upgrades for purchasers of certain PS4 games to the PS5 version later on. Third-party software publishers have also been quick to recognize the predicament for consumers, and are offering free cross-generational upgrades for various titles they are releasing directly to gamers, helping ensure that they can carve out market share now even before their audience has the means to acquire a 9th gen device.
And lastly, Microsoft has brought back the Xbox All Access plan, providing cost-conscious consumers the opportunity to get an Xbox Series X/S, a subscription to a library of games with Game Pass, and the ability to stream those games on other devices for a monthly price of $24.99 (for Series S) or $34.99 (for Series X).
Importantly, the COVID-19 pandemic is far more than a global health crisis. In the six months that we’ve been living with the virus, it has affected every aspect of daily life. It’s also having a crippling effect on businesses, the economy, unemployment rates, consumer sentiment and people’s ability to make ends meet. For consumers, the pandemic has birthed two primary consumer types: insulated and constrained. And while insulated consumers have not been directly affected by COVID-19 (health or financially) the way constrained consumers have, they may opt to shift to more mindful spending habits simply to be cautious. However, although the video game industry is in tumultuous times with a great deal of uncertainty and unexpected issues, consumers’ fervor for the latest and greatest games is a steady constant. The new consoles, the cross-generational transitions from publishers, subscription programs and new streaming platforms are all various ways to achieve the same end goal; to serve up software. As Bill Gates once famously said, and other forms of media have proven, regardless of all the different platforms and consumption models available… “content is king.”