Microsoft just sold nearly one million Xbox 360 consoles last week alone, but we’re nearing the end of the road for video game consoles according to one industry visionary. Richard Garriott, known for having created the fantasy role-playing franchise Ultima and the massively multiplayer online role-playing game (MMORPG) Tabula Rasa, says converged devices such as computers, smartphones and tablets will soon render dedicated game consoles obsolete. Read on for more.

“I think we might get one more generation, might, but I think fundamentally they’re doomed,” Garriott told IndustryGamers in an interview. “I think fundamentally the power that you can carry with you in a portable is really swamping what we’ve thought of as a console.”

Smartphones and tablets have plenty of ground to cover before they can even come close to approaching the capabilities of the current generation of consoles, and we may see next-generation consoles launch as soon as next year. BGR exclusively reported in June that Microsoft plans to unveil its next-generation Xbox console at E3 next year, and Sony may also unveil its PlayStation 4 in 2012 according to recent reports.

Several industry leaders disagree with Garriott’s assessment. In a recent interview with BGR that will be published in the coming weeks, Saber Interactive co-Founder and CEO Matthew Karch suggested smartphones and tablets may never catch up to consoles in terms of capabilities and user experience. Consoles already have such a tremendous technology lead and the physical limitations of mobile devices will be a huge barrier until broadband data speeds and reliability reach a point where the bulk of game processing can be handled remotely.

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Much has been made of the video game console business’ steady decline, and rightfully so; console sales have dropped considerably in recent months. Some attribute the sliding sales to a weakened economy while a minority believe trends are turning toward casual mobile gaming, but market research firm IDC says we shouldn’t be sounding any alarms just yet. In a new report, IDC suggests that console gaming will begin to reverse current downward trends in 2012, with a big-time resurgence to follow in the coming years. “Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” Lewis Ward, an IDC research manager, said in a statement. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4′ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.” Of course the market could rebound even sooner than that. BGR reported exclusively that Microsoft may be preparing to unveil a new Xbox model as soon as E3 2012, and Sony could be fast-tracking plans for a new PlayStation 4 console as well. The Xbox is now six years old, Sony’s PlayStation 3 is five years old and Nintendo’s Wii is almost five years old as well. As quickly as technology now evolves, it shouldn’t be any mystery that console sales are currently waning. IDC’s press release follows below.

IDC Finds the Demise of Game Consoles Is Greatly Exaggerated

18 Aug 2011

FRAMINGHAM, Mass., August 18, 2011 – Despite recent macroeconomic instability and particularly weak overall video game spending in North America this summer, the latest International Data Corporation (IDC) forecast of the worldwide video game and interactive entertainment console market points to a rebound beginning in 2012, largely driven by new platform releases and rising console penetration and spending in select developing economies.

“Total console hardware and disc-based software revenues are on track to slide a few percent in 2011 compared to 2010,” says Lewis Ward, research manager, Consumer Markets: Gaming, at IDC. “But prognostications that consoles have peaked as a product category are premature. I expect that the launch of the Wii U, a revamped interactive entertainment console from Microsoft in the 2014 timeframe, and the arrival of Sony’s ‘PS4′ circa 2015 – along with more than a few exclusive, innovative games – will help drive a new wave of console-centric spending in the next several years.”

IDC forecasts direct global console hardware and disc software sale revenue will increase at a compound annual growth rate (CAGR) of 3.6% from 2010 to 2015, reaching $39.7 billion in 2015 with developing economy growth rates about twice those in developed markets. Despite this rebound, the installed base of actively used game consoles won’t keep pace with the number of worldwide households. IDC expects there to be about 257 million active consoles worldwide by 2015, or 12.7% of anticipated households that year, down about 1% when compared to same console penetration figure for 2011. In this sense, it’s possible to conclude that console popularity will slip due to the rise of media tablet gaming, casual, free-to-play/social online PC games, etc.

This IDC study, Worldwide Game and Interactive Entertainment Console Hardware and Software 2011 -2015 Forecast (IDC #229438), assesses and forecasts the demand for, usage of, and revenue associated with video game console hardware and software on a worldwide basis through 2015. It provides a competitive assessment of the leading current-generation console platforms based on survey data, interviews, and other research sources and models next-generation platform releases based on historical precedent and other inputs. Worldwide game console totals are broken down into four regions: North America, Western Europe, Japan, and the rest of the world.

The forecast also shows the PS3 will have the largest active installed base of any game console worldwide by 2015. In this sense, the PS2′s “long tail” may ultimately repeat.

Sales of video game hardware and software declined 10% in June according to new data reported by industry watcher The NPD Group. Total content sales including home consoles, portable consoles and PC game sales totaled $1.03 billion last month, down 10% from June 2010. Hardware sales declined 9% from $401.7 million in June 2010 to $366.6 million last month, and software sales dropped 12% over the same period to $469.5 million. Video game accessory sales also declined from June of last year, dropping 11% from $177.7 million in 2010 to $158.9 million last month. Game publisher Take 2 Interactive was responsible for the two best-selling games in June, with L.A. Noire occupying the top spot and Duke Nukem Forever coming in at No. 2 despite low ratings from reviewers. Sony’s Infamous 2 was the third best-selling game for the month, while Disney’s Lego Pirates of the Caribbean: The Video Game and Nintendo’s Legend of Zelda: Ocarina of Time 3D rounded out the top-5. Overall hardware, software and accessory sales in the first half declined 2.4% compared to the first half of 2010. A list of The NPD Group’s top-10 software titles for the month of June follow below.

Gaming giant Nintendo recently announced that during Black Friday week, U.S. consumers purchased a combined 1.5 million DS and Wii gaming systems. Holiday shoppers scooped up nearly 900,000 DS units and over 600,000 Wii consoles during the popular shopping debacle period. “U.S. shoppers bought about 9,000 Nintendo hardware systems nonstop for every hour of every day during the week of Black Friday,” said Nintendo of America’s president. Sales of Wii consoles were up slightly while sales of the DS portable gaming system fell slightly from the same period last year. Regardless, the numbers are still very impressive.

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Announced earlier today after months of speculation, Hulu Plus has finally become official. For $9.99 per month, subscribers will be able to watch their favorite shows — including those from seasons past — on a multitude of internet-connected devices. Mobile devices are a go, with iOS devices including the iPhone 3GS, iPhone 4, iPad, and iPod touch (3rd generation) being the main attraction at this point in time. The best part as far as mobile is concerned is that streaming will work on both Wi-Fi and 3G networks. Several internet-connected HDTVs and Blu-ray players from Samsung already have support for the streaming service, and later on in the year, both Sony and Vizio will introduce support in some of their sets ad Blu-ray players. The PlayStation 3 will support the service “soon”, while the Xbox 360 will play nice come 2011. Hulu Plus will officially launch is July, but if you’re lucky you might just be able snag a preview invite.

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In the previous installment of Throwback Thursday, we flipped the calendar all the way back to 1977 and took a look at the Atari 2600. This week, we’re easing things up and bit and giving a shout out to the Sega Game Gear, circa 1991. From the get go, the Game Gear had its work cut out for it. Bulkier, slower and more than double the price of Nintendo’s Game Boy ($199 versus $90), the Game Gear never managed to steal Game Boy’s thunder as it was expected to do by Sega’s top brass. But thanks to a 3.2″ 160×144 32bit color display and a string of best sellers like Sonic the Hedgehog, Mortal Kombat, and Aladdin, Sega did at least manage to make money off of the system until it pulled the plug… err,  six batteries out of it in 1997.

BGR Throwback Thursday is a weekly series covering our (and your) favorite gadgets of yesterday and yesteryear.

In honor of E3 week, we thought we would dedicate this week’s Throwback Thursday to a gaming device from the past: the Atari 2600. The console that really brought in-home gaming to the masses and a gadget we have a real soft spot for, the 2600 was first launched in 1977. At the time it retailed for $199, which is roughly equivalent to $730 today. Despite the high cost, Atari managed to move over a 250,000 units in its first year. Although by today’s standards its 8-bit 1.19MHz processor and 128 bytes of RAM are absolutely ridiculous, the 2600 managed to keep generations entertained — thanks to insanely addictive titles such as Missile Command, Pitfall and Space Invaders (don’t get us started on that awful Pac-Man port). In spite of the fact that many of the people who revere it weren’t even alive when it was finally discontinued in 1992, the 2600 retains a huge cult following. What memories do you have of the Atari 2600?

BGR Throwback Thursday is a weekly series covering our (and your) favorite gadgets of yesterday and yesteryear.

Today at E3, Nintendo delivered upon its promise and announced the 3DS, the only device of its kind to deliver 3D imagery without requiring users to wear dorky special glasses. The portables secret weapon is its 3.5″ 3D display which users can adjust based upon their proximity to the screen for optimal 3D viewing; there will also be an option to disable 3D. Like the 2D DS, the bottom display is a resistive touchscreen and the front-facing camera remains unchanged. Another neat feature is the dual camera system on the backside of the main display which allows users to capture 3D images. There’s also a gyropscope, motion sensor, and Wi-Fi which apparently is able to download content in the background and sniff out a connection and log onto the web without your instructing it to do so. Pricing and a release date were not disclosed.

Well, it’s official. Today during its E3 keynote, Microsoft took the wraps off the latest and greatest version of the Xbox 360. Described as being “sleeker, smaller, whisper quiet,” the new 360 has a 250GB HDD, built-in Wi-Fi n, and a super sexy $299 price tag. It begins shipping today. Excited?

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According to Ray Maguire, head of Sony’s UK PlayStation division, the future will see the majority of first-person games for the PlayStation available in 3D; Macguire made the comment during a recent interview with ComputerandVideoGames.com. As for when all of PlayStation’s top-billed titles will be in 3D — something which Sony expects all major gaming studios to do with their most popular franchises — Maguire believes this will happen around 2014, by which time Sony expects as many as 40% of households will have a 3D TV. Today marked the first day of sales for Sony’s first 3D PS3 titles which include WipEout HD, SuperStarust HD, PAIN and a single level demo of MotorStorm: Pacific Rift.

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April saw the video game industry suffer through its worst month in nearly 10 years, as both hardware and software sales tumbled for a combined total of 26%. Consoles saw the biggest decrease with a 36% drop to $398.5 million, while software titles and accessories fell 22% and 9% to $249.3 and $118.4 million respectively. According to NPD research analyst Anita Frazier, some of the decline has to do with Easter falling in early April. If it were to have fallen in the middle of the month as it did last year, Frazier believes the month would have seen an additional $55 million in sales. So what system suffered the most last month? That unfortunate title belongs to the Nintendo Wii which sold 50% less units than it did in March. On the bright side, it did manage to hold on to its title as the top-selling non-portable console with 277,200 units sold. Coming in second was Xbox 360 with 185,400 units sold, followed closely by the PS3 at 180,800. As for portables, sales of the Nintendo DS — fast approaching the Playstation 2 as being the best-selling console in history — were down 37% to 440,800 while the PSP essentially lost its will to exist selling only 65,500 for a drop of 44%. As for the top selling games… well, you’re just going to have to hit up the jump to find out. You wouldn’t want the home page of BGR to start looking cluttered, would you?

1. Tom Clancy’s Splinter Cell Conviction – Xbox 360
2. Pokémon Soul Silver – DS
3. New Super Mario Bros. Wii – Wii
4. Pokemon Heart Gold – DS
5. God of War III – PS3
6. Wii Sports Resort with Wii Motion Plus – Wii
7. Battlefield: Bad Company 2 – Xbox 360
8. Wii Fit Plus – Wii
9. Just Dance – Wii
10. Super Street Fighter IV – PS3

[Image: Toothpaste for Dinner]

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Speaking to the Associated Press on Friday, Nintendo CEO Satoru Iwata revealed that his company’s upcoming Nintendo 3DS will in fact gamers the choice of playing titles in both 3D and 2D. Exactly how one would switch from 3D to 2D and vise versa is unclear, but Iwata mentioned one of the primary reasons for the ability to remove the extra dimension is for the health of children’s eyesight. Also revealed by Iwata was the fact Nintendo is going to introduce a new set of anti-piracy measures with the 3DS. Unfortunately with this one, Iwata would not comment further saying he did not want to give pirates any clues about how the measures will work. Said Iwata on the piracy of video games: “We fear a kind of thinking is become widespread that paying for software is meaningless. We have a strong sense of crisis about this problem.” The Nintendo 3DS is scheduled to make its debut at E3 this June and go on sale in Q1 2011.

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Sure it might turn out to be nothing more than an incredibly expensive fad, but whether you like it or not, 3D everything is going to continue to be shoved in your face for the foreseeable future. Case in point: The Nintendo 3DS (temporary name) which today was announced by Nintendo. Images, specs, pricing, a list of launch titles and just about anything else imaginable have been withheld, but we do know the 3DS is headed for a Q1 2011 release and that “games can be enjoyed with 3D effects without the need for any special glasses” and that the system “will include backwards compatibility so that software for Nintendo DS series, including the ones for Nintendo DSi, can also be enjoyed.” Nintendo has said it will give out further details this June at E3, but man, that’s a lot of time for Nintendo junkies to go sleepless.

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Dust off your old pair of Vans and get ready to party like it’s 1995, because Tony Hawk: RIDE has finally been released in North America. Available for the Nintendo Wii, Playstation 3 and Xbox 360, the game’s main attraction lies in its wireless skateboard controller that’s chockful of motion sensors and allows players to more or less feel that they themselves are on a real skateboard and part of the game. The game and skateboard are bundled together for $119.99, a far cry cheaper than your hospital bill will be after playing this game drunk at your office Christmas party.

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We all knew that Call of Duty: Modern Warfare 2 was destined to smash industry sales records, but the pace at which the game is reported to be selling is absolutely shocking. By Activision’s own internal estimate, the first 24 hours of availability in the US, Canada and UK saw 4.7 million copies sold and generated approximately $310 million of revenue. As for the rest of the world, a good estimate is proving itself rather hard to come by, but Joystiq believes we’re looking at another 2.7m copies on the first day. Yes indeed, it looks as if Activision CEO Bobby Kotick will indeed be getting that mega yacht for Christmas.

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