Next-gen consoles vs the Pakistani market

Published August 22, 2013
Visitors walk past an advertising placard of the Xbox One at the Microsoft Games exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013. — Reuters Photo
Visitors walk past an advertising placard of the Xbox One at the Microsoft Games exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013. — Reuters Photo

There was a barely audible gasp in the audience during the press conference at E3 when Microsoft outlined their plans for the new Xbox One.

A futuristic-looking ‘home entertainment’ console', which the technology giant claimed would surpass the average gamers expectations and meet the entire household’s entertainment needs. The Xbox One is equipped for everything from streaming live television, to playing DVDs, attending video calls and immersing oneself in the latest cutting edge video gaming technology.

The experience of playing wildly popular titles like Halo and Call of Duty would be enhanced with the all-new 4K supported gaming engine, enthralling gamers like never before.

However, the air of optimism quickly turned sour, when the audience was introduced to the draconian measures that Microsoft was adopting to increase their consumer base as well as bump up revenue streams.

The console would be available for an eye-watering baseline price of $499. It would need to be connected to the internet at least once every 24 hours in order for a ‘validation’ process to take place, and users would not be allowed to trade games with friends, since games simply would not work on more than one console.

These announcements by Microsoft definitely came as a shock to the gaming world. But with relative affluence in Western countries, and with higher purchasing power afforded to the ordinary consumer, one can argue that the popularity of these consoles in primary markets will remain relatively unaffected. There will simply be a straight war between Sony and Microsoft for the dominance of their respective consoles.

What’s more interesting however, is how the new consoles will be viewed in frontier markets like Pakistan, where users are more willing to elk out a hefty first-time amount to buy the console but are unwilling to pay roughly $60 for every game that they purchase. Piracy is rampant in frontier markets like these, with the console of choice being automatically the one for which pirated games are readily available.

The Xbox 360 remains the console of choice for most Pakistani gamers today. Its relative affordability (current market price is Rs 25,000) as well as a single pirated game retailing for only Rs.100 means that gamers can afford to enjoy this home entertainment luxury. Online gaming remains out of the question however, partly due to lack of broadband connectivity, but mainly because a pirated game will simply not work on-line.

Firdous Ali, proprietor of a popular video games shop in Defence, Karachi, spoke solemnly when asked for his views on how the next-generation consoles will be received in Pakistan.

He believes that the industry is already on the decline due to deteriorating economic conditions and the exorbitant price of the new consoles, coupled with their online connectivity requirements and lack of cheap pirated games, will deal the proverbial death-knell to the market.

“Tablet computers and smartphones are already eating into the market for video games; which consumer will be willing to pay in the region of Rs 70,000 for the Xbox One?” he opined.

Confirming this trend, Shahbaz Mahmood, the owner of a video games shop in the famed electronics market of Saddar, Karachi, said that his sales had declined from about 15 – 20 consoles per week to less than 5 now.

“While Sony remains a superior brand, its popularity in the Pakistani market had already declined once pirated games were not available anymore for the PlayStation 3. The Xbox 360 would still sell relatively well, but with the new next-generation consoles, all this is bound to change,” he said.

Countries like Pakistan, where piracy is rampant and copyright laws remain non-existent, are a thorny issue for companies like Microsoft who want to help the nascent markets but do not want to compromise their stand on piracy either.

The gaming industry in Pakistan is set to make a divisive shift in the coming months. Most hardcore gamers may very well delve into their pockets once again and refuse to deny themselves the experience of console gaming, but overall interest in consoles is very likely to subside.

Confirming market trends, most consumers in Pakistan are switching to PCs, which serve multiple functions, and where online connectivity issues are less of a problem. However, it would be a sad state of affairs if this decline was allowed to continue.

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