Obviously, I don't disagree that top-end PCs and cutting edge consoles will always be more powerful than mobile devices. But just because there will always be something faster does not mean consumers won't flock to mobile from consoles. There's a reason the Xbox 360 is 7 years old. It's because the Xbox 360 was good enough for 7 years and there weren't many games that strained the Xbox 360's power (ditto for the PS3). By the time the next Xbox is released, the Xbox 360 will have had a 10 year cycle. At a certain point hardware no longer becomes the biggest limiting factor. Within a few years smartphones may have eaten everything that consoles occupy perhaps except for hyper-photorealistic more-than-1080p games. There will always be a market for consoles, but that market is shrinking at the same time that the mobile gaming market expands.
As for your second point, it's simply wrong to assume that all mobile games cost $1 and will continue to do so in the future. Part of the prevalence of $1 apps is because those apps are casual and very basic. There is no reason that higher-quality games can't charge more in the future. Final Fantasy Tactics (a PS/Game Boy Advanced/DS game) was released on the iPhone for $16. If and when smartphones rival consoles, there is nothing stopping Activision from charging $60.
And this isn't necessarily limited to smartphones. With much more powerful tablets, the trend towards mobile gaming replacing consoles will be even more accelerated than I described.
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Obviously, I don't disagree that top-end PCs and cutting edge consoles will always be more powerful than mobile devices. But just because there will always be something faster does not mean consumers won't flock to mobile from consoles. There's a reason the Xbox 360 is 7 years old. It's because the Xbox 360 was good enough for 7 years and there weren't many games that strained the Xbox 360's power (ditto for the PS3). By the time the next Xbox is released, the Xbox 360 will have had a 10 year cycle. At a certain point hardware no longer becomes the biggest limiting factor. Within a few years smartphones may have eaten everything that consoles occupy perhaps except for hyper-photorealistic more-than-1080p games. There will always be a market for consoles, but that market is shrinking at the same time that the mobile gaming market expands.
As for your second point, it's simply wrong to assume that all mobile games cost $1 and will continue to do so in the future. Part of the prevalence of $1 apps is because those apps are casual and very basic. There is no reason that higher-quality games can't charge more in the future. Final Fantasy Tactics (a PS/Game Boy Advanced/DS game) was released on the iPhone for $16. If and when smartphones rival consoles, there is nothing stopping Activision from charging $60.
And this isn't necessarily limited to smartphones. With much more powerful tablets, the trend towards mobile gaming replacing consoles will be even more accelerated than I described.