Monday, July 25, 2011

Phil Harrison: The old video game business model “Is over”

The current business model of video game business which focuses on high powered chipsets and clock-speeds is outdated and will likely undergo a metamorphous in the next generation of consoles, ex-Sony boss Phil Harrison told Eurogamer.

"I think the era of the console where hardware companies spend $3-4 billion to build a chipset and then it's supported on a tax on the software - that's the business model of the last 25-30 years - that's over,” Harrison added. "The new business model is going to become a combination of retail and services, and it's going to be an interesting decision for the likes of Microsoft, Sony and Nintendo, is the next console race about chips and CPU, clock speed and graphics, or is it about business models and monetization and discovery, and I think it's probably going to be about the latter."

Harrison left Sony for Atari in 2008 after overseeing the launch of all three Playstations. He now works for the streaming-gaming service Gaikai, which has provided him with a different perspective of the video game industry business model. Although he says this doesn’t mean the Playstation and Xbox brand will be going away anytime soon, a more cost effective and an upfront profit model will eventually replace the old one. -TNGG

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