Is the tech inside games consoles becoming redundant? The Wii, PlayStation3 and Xbox 360 are now around six years old, and despite having sold 223 million collectively (the Wii accounts for the lion's share at around 97 million) sales of both consoles and discs are down across the board.
Paradoxically, the video games industry is booming, and not even overly concerned with July's 23% drop in physical discs; its focus has shifted elsewhere.
Simple 'freemium' games like Words With Friends, Angry Birds and Monopoly are all the rage across smartphones and tablets, while Massively Mulitplayer Online (MMO) games like Celtic Heroes are starting to create closer relationships between players and developers than ever before.
"MMO developers have been very good at generating new games to keep people hooked, as well as a community feel that people enjoy," says Jaclyn Wilkins, gaming expert at Charles Russell LLP. "It's something that games played through consoles need to harness as well."
Tablets & the iPad 3
Mobile gaming is getting bigger, and the real challenge to consoles comes from tablets. Games that take advantage of the iPad's retina display – such as FIFA 12, Infinity Blade and Real Racing 2 HD – are rampant. However, there is a catch that puts mobile devices at a distinct disadvantage compared to the games consoles. "The devices we've got now won't cope with high quality graphics for hardcore gamers," says Wilkins. "They're just not as responsive."
How long that will last is debatable since the majority of hardware development is bound to be around tablets and phones – rather than games consoles – simply because it's a much bigger sector of the market right now.
"Tablets are definitely a growth area," says Wilkins. "The launch of the iPad 3 will be a leap from the previous version, and eventually tablets will be as powerful as consoles."
Apple TV already indulges on 'catch and throw' video and music from the iPhone and iPad, and that's the likely future of gaming, too, though it may require some new gadgets.
"Playing casual games on a touchscreen phone is fine, but when it comes to playing the more addictive and immersive titles, seamless gameplay is impossible," says Bo Nyman, CEO of Swedish firm Fructel.
With a familiar console controller design, his company's Gametel (opens in new tab) (£43.32) device pairs with Android phones via Bluetooth. Game play is easier, and the long-term idea is obviously to port the game from phone to TV. The choice of games is limited and it's not yet likely to pull dedicated gamers away from a PS3 or Xbox 360, but the logical conclusion of this idea is obvious; to circumvent the games console.
Even TVs are getting in on the act. Samsung unveiled its 75-inch 75ES9000 earlier this year, and it's headline feature? Angry Birds, embedded and easily controlled using Kinect-style gestures thanks to its pop-up camera. OK, so it's no Halo, but could it be the start of something exciting that pulls the rug from under dedicated games consoles?
"I don't see a huge leap forward in gaming since the Kinect from Microsoft, so it's not a surprise that games console sales are stagnating," says Reuben Verghese, Vice President for Asia at smart TV platform developer Accedo, explaining that at the moment there's no reason for people to rush out and buy an expensive new console.
The console as media hub
In a bid to stay relevant, the major conosles have all embraced catch-up TV apps, on demand films – such as Lovefilm and Netflix – and even subscription TV services (like Sky Player on the Xbox 360). For many, their games console is the most connected piece of AV equipment they have, though as penetration of app-loaded 'smart' TVs increase, games consoles' abilities in this area may become less compelling.