Console’s brand new death
In its next era incumbents and newcomers break with traditional strategy
The SuperJoost Playlist is a weekly take on gaming, tech, and entertainment by business professor and author Joost van Dreunen.
True success is self-evident.
Just ask FIFA. Touted as the pinnacle of global football, the Club World Cup was played to half-empty NFL venues.
It makes it less a celebration of sport than a reminder of what happens when cultural relevance slips. This wasn’t just a marketing failure. It was a symptom of cultural detachment and institutional overreach.
Ticket prices are well beyond reach for average fans, with some openers starting at $223 and upper-deck seats topping $100. And foreign fans now face travel barriers, visa denials, or political hostility. What should be a populist ritual—cheap seats, loud chants, flags in the wind—has been repackaged as a premium product, made inaccessible, and, subsequently, stripped of its meaning.
The same was true at the 250th anniversary military parade, which landed with a thud. Meant to project strength, it instead revealed isolation. Spectacle without spectators suggests a state without consensus.
By contrast, digital communities, often dismissed as trivial or less “real”, continue to grow in size, energy, and influence. Titles like Baldur’s Gate 3, Helldivers 2, and Trench Crusade (more on this one soon!) thrive not because of massive marketing budgets, but because people showed up. They bring others with them. Success online is self-reinforcing. It’s social proof at scale.
In both physical and digital life, presence is power. And absence is a signal.
On to this week’s update.
BIG READ: Console’s brand new death
It’s a long-standing tradition to call for the death of the console during its transition to new hardware. Declining sales toward the end of a generational cycle, in anticipation of the next, seem to suggest to investors and observers that the category at large is in decline and on its way out. Historically, that observation is incorrect.
Even so, the current console cycle is clearly different from before. Nintendo’s new device, launched globally last week, kicks off the next era. But this time, incumbents have different ideas on the future of console gaming. As do a few newcomers.
To start, Nintendo’s emergent strategy centers on leveraging its IP across a range of entertainment channels. Following the 2023 success of The Super Mario Bros. Movie and the opening of several amusement parks, Nintendo has started blending mass-market reach with targeted high-value segments.
The Japanese firm is a household brand with clear values that cater to a broad audience. In the lead-up to the Switch 2’s release, for instance, it could count on abundant mainstream media attention with a host of outlets doing in-depth analyses on Nintendo’s history and the popularity of its brands.
An important part of the narrative Nintendo undoubtedly seeks to control is that the current launch will not be a repeat of previously disappointing releases. Following the massive success of the Wii, the Wii U greatly under-delivered. Analysts have compared the Switch 2 to the Wii U, another marginal hardware upgrade. Without a new Mario or Zelda, many doubted its ability to match the Switch’s breakout success.
It is probably why Nintendo posted a new industry record, announcing it sold 3.5 million units worldwide within its first four days, making it “the highest global sales level for any Nintendo hardware.” According to Circana, 1.1 million units were sold in the US alone. Despite previous anxieties around tariffs, a historically higher price point, and pre-order disruptions, the first batch found buyers without a problem.
Next, Microsoft is redefining console gaming based on its relative strengths by reshaping where and how people play. Where in the past its marketing narrative would rely on raw performance alone, it is now focused on establishing itself as a gaming ecosystem that is entirely device-agnostic and widely accessible. Its emphasis on handhelds and cloud-compatible silicon indicates a structural pivot toward distribution innovation, in which hardware becomes a vector for reach rather than a moat for exclusivity.
Earlier this week, for instance, it announced a multi-year partnership with AMD as part of its broader strategy to unbundle gaming from a single console and integrate it more deeply into a multi-device ecosystem. I’d have to imagine there’s a clear efficiency to co-engineering silicon across console, handheld, and cloud platforms, at least from a tech stack perspective. It also allows Microsoft to leverage its AI capabilities and, perhaps most importantly, backward compatibility.
This isn’t just a chip deal. Microsoft attempts to reassert platform control via integrated hardware, backward compatibility, and a cloud-first future. In that sense, Microsoft is inching closer to Apple’s model of vertically integrated, user-centric design, even if it’s doing so in a fragmented, open ecosystem.
Strategically, this collaboration tightens the platform loop around AMD while raising competitive pressure on Nvidia, which dominates Nintendo’s silicon stack but has fewer console footholds. (Nvidia has all but abandoned gaming, according to The Economist.) It also raises questions for Sony, which has historically shared AMD as a chip supplier. Should Microsoft’s ecosystem strategy succeed—anchored by Game Pass, handheld Windows integration, and exclusive silicon optimization—it could recalibrate the entire platform landscape in gaming.
Next, Sony’s strategy is to evolve PlayStation from a console-first business into a transmedia IP platform. While it continues to sell hardware at scale, its strategic emphasis is shifting toward high-margin digital services and franchise expansion. Titles like The Last of Us have crossed into television with critical success, and Sony has invested heavily in anime distribution (via Crunchyroll) and film adaptations of its game IP.
It positions PlayStation less as a closed hardware ecosystem and more as the foundation for a vertically integrated content engine. Rather than chasing distribution breadth like Microsoft, Sony is doubling down on cultural depth, using its exclusive IP to build multi-format engagement loops.
The changing definition of what constitutes console gaming and gaming in general has also opened up some potential opportunities for relative newcomers. Despite having been part of gaming for a while now, two firms stand out as potential beneficiaries.
First, Apple’s strategy in gaming is not to compete on content or consoles, but to integrate gaming into its broader ecosystem of services and devices. Apple Arcade has built a curated subscription offering that leverages its existing install base of over 2 billion active devices. The firm confirmed last week that macOS 26 Tahoe will be the last version of the operating system released for Intel-based Mac computers, after introducing its own proprietary chipset in 2020. I’ve previously argued that Apple may yet beef up its gaming strategy by considering more first-party content.
However, rather than chase hardcore gamers, Apple targets families and casual players through mobile-native experiences optimized for iPhone, iPad, and Apple TV. While Apple’s gaming revenue is primarily driven by App Store commissions, generating around $14 billion annually, it continues to frame gaming as an embedded layer within its consumer tech ecosystem, not as a standalone category. This ambient approach to gaming distribution gives Apple disproportionate leverage—minimal risk, massive upside, no blockbuster pressure.
Will it launch into first-party publishing? No. At least, not at the scale that it could or, arguably, should. After spending an average of $5 billion annually on TV production, Apple is cutting back its budget. Even so, that type of money would easily establish its own first-party portfolio that, unlike TV and film, does not have a spending ceiling.
Second, Meta’s gaming strategy is built around owning the next interface. Through its Quest VR platform, Meta is investing heavily in immersive hardware as a gateway to a broader spatial computing ecosystem. The company has shipped over 20 million Quest headsets to date, and it continues to subsidize hardware to accelerate adoption.
Despite this, engagement and retention remain challenges: internal reports suggest that a significant portion of Quest users churn within months. Meta’s recent pivot to “mixed reality” and enterprise applications reflects a recalibration, away from consumer gaming as the primary use case and toward broader use across productivity, fitness, and social interaction. Yet games like Beat Saber and Asgard’s Wrath 2 remain its best-known titles. Meta doesn’t aim to be a traditional platform in the Nintendo or PlayStation mold. Instead, it wants to own the operating system and app store for an emerging class of spatial apps, with gaming as the tip of the spear.
In that regard, the recently announced Deadpool VR managed to generate both excitement for its gameplay and visual promise and sparked backlash over its exclusivity to the Meta Quest 3/3S. While some praised Meta’s investment in bringing high-profile VR titles to market, it also locks out PCVR and PSVR2 users, making it comparable to similar exclusivity deals seen in the past, and suggesting a lack of broader industry support for open-access VR ecosystems.
Meta’s VR strategy emphasizes mass-market penetration and ecosystem control through aggressively priced hardware like the $299 Quest 3S, subsidized to accelerate adoption despite high churn. In contrast, Valve’s forthcoming standalone Deckard headset, rumored to launch in late 2025 at a $1,200 price point, targets the high-end PC gaming segment. It will run on SteamOS, offering compatibility with the full SteamVR library and even non-VR titles, signaling a premium, platform-centric approach rooted in content breadth and open standards.
The console category is at the start of its next iteration. And in response, both incumbents and newcomers are formulating unique strategies to establish themselves. Nintendo is doubling down on curated hardware and premium IP, reinforcing its legacy as the most intact version of the classic console model. Microsoft is unbundling the console entirely, betting on cloud, handhelds, and cross-platform integration to redefine Xbox as a service-first platform. Sony is transforming PlayStation into a transmedia engine, extending its franchises across film, TV, and digital services to deepen audience engagement. Newcomers like Apple treat gaming as ambient infrastructure, embedded within a broader device ecosystem, while Meta pursues the interface itself, using subsidized VR hardware to seed a future spatial computing platform. What unites them isn’t form factor but the strategic architecture behind their platforms.
The console industry is entering its tenth generation, which tells you that it has died nine deaths before. Hardware remains important, but it no longer defines the platform. Instead, how firms manage distribution, integrate IP, and structure engagement across devices will define their next era. The industry is shifting from hardware battles to architecture wars. The console, in 2025, is no longer a box. It’s a strategy.
NEWS
K-drama in M&A: Tencent denies Nexon bid
This week’s hottest Korean drama isn’t on Netflix but plays out in mergers and acquisitions. Tencent was rumored to be preparing a bid for Nexon, South Korea’s flagship game publisher, only to abruptly deny any such move. The Chinese tech giant claimed it hadn’t even spoken with the controlling family that owns 48% of the company.
The whiplash set off a wave of speculation and nationalist concern. For many in Korea, the prospect of Nexon, best known for MapleStory and Dungeon Fighter, falling under Chinese ownership triggered alarms about cultural sovereignty and market dominance. Tencent, already a major force in Korean gaming via partnerships and minority stakes, now faces a credibility gap: if it wasn’t bidding, why did the rumor swirl so credibly? Stay tuned. This episode isn’t over.
PLAY/PASS
Play. Probably after seeing the New York Times raking in new subscribers and boosting revenue with their wildly popular games, high-brow publication The Atlantic announced it now has games, too. At first glance, its catalog requires a degree in English literature, but then again, I’ve never once finished that pesky Sunday crossword in the NY Times either.
Pass. The FT ran an article on the kind of play that keeps execs “on top of their game” (sigh) and only managed to mention Elon Musk (deeper sigh).
UP NEXT
I’ve been chipping away at my backlog of unpainted miniatures. It’s given me a fresh perspective on this distinctly low-tech, tactile form of play.
Thank you for the detailed breakdown, as usual!