During Wedbush Morgan Securities annual Management Access Conference, Wild Tangent founder, chairman and CEO Alex St John expressed his opinion that the current generation of consoles might be the last one.
"I think you're looking at the last generation of game consoles, and I think it's easy to defend that position," he said. "The thing that's interesting is, a console is not a game enabling device - it's a game blocking device, unless you've paid for it. So, the principle value of a console is as DRM technology to solve the piracy problem."
That, and graphics, St John added before explaining that consoles have lost their graphical advantage and that pretty PC graphics is cheap right now.
So, what does the future hold for gaming? According to Alex St John:
"Community-based gaming is going to dominate the market and the economics. And community-based games don't need DRM, because communities can't be stolen, and therefore nobody needs to share any revenue with the console manufacturer."
"World of Warcraft is the most profitable game in history. Pogo is, I imagine, wildly profitable, and not a console game. World of Warcraft will generate 1.2 billion dollars this year in online subscriptions, and nobody can pirate it."
"I think the business model in ten years - and probably going to happen very quickly - there are going to be two left in gaming. It's going to be microtransaction based...And, again, because I'm a mathematician and an engineer, microcurrency-based economies are just the most efficient way to maximize revenue. They work really well."
"And second is advertising, because advertising is a great alternative payment type for kids who don't have access to online currency and are huge game players. So, if you don't have any way to take money from kids, then the only way to get kids to play is by advertisers marketing to them."
