Are we really giving up on Xbox 360 and PS3?

E3 2014 was rammed with games for PS4 and Xbox One.

It was an exciting show for those millions of gamers that have invested in Microsoft’s and Sony’s latest hardware.

Yet for that even larger audience yet to upgrade, and are still happily playing with their 360 or PS3, it was a disappointing week.

Sony confirmed that its PS4 game LittleBigPlanet 3 will be coming to PS3, too. While Microsoft showed off the Xbox One version of Forza Horizon 2, which again is receiving an Xbox 360 SKU. That was about it.

We are committed to supporting Xbox 360,” says Microsoft’s studios boss Matt Booty.Forza Horizon 2 is coming to 360, as is a new Magic: The Gathering title. You’ll continue to see games and DLC on 360.”

The fact that Booty used Magic: The Gathering as the second example of an upcoming 360 title just about says it all. There are, of course, 360 and PS3 versions of Destiny, Call of Duty, FIFA, Assassin’s Creed, Battlefield and so on due this year. But we’ve seen nothing of them. In fact, we don’t even know who is developing Call of Duty on the older platforms, while EA has played down the 360 and PS3 FIFA SKUs.

The fact that Booty used Magic: The Gathering
as the second example of an upcoming 360 title
just about says it all. There are, of course, 360
and PS3 versions of Destiny, Call of Duty, FIFA,
Assassin’s Creed, Battlefield and so on due this
year. But we’ve seen nothing of them. In fact, we
don’t even know who is developing Call of Duty
on the older platforms, while EA has played down
the 360 and PS3 FIFA SKUs.

The one company that did buck the trend at E3 was 2K Games, which showed the only significant Xbox 360 and PS3-only game to launch this year: Borderlands: The Pre-Sequel.

There’s a huge Borderlands fanbase that still owns Xbox 360 and PS3. We made the decision to release The Pre-Sequel on current-gen and PC,” says Take-Two boss Strauss Zelnick.

History says people will continue to consume products for prior-gen if they are high quality.”

Zelnick has the stats on his side. The UK install base of Xbox 360 and PS3 is just shy of 15m, versus 1.5m Xbox Ones and PS4s. And despite the rise in next-gen, there has still been over 110,000 prior-gen games sold over the last six months. More 360 games have been sold this year (so far) than any other platform.

So is everyone else making a mistake by turning away from the last generation?

Yes and no. Publishers were all taken by surprise during last year’s console transition, with customers fast upgrading to the new machines

This impacted current-gen sales for the December period and led to fears of a current-gen collapse,” said one UK publishing boss.

That transition has slowed a bit, but the next-gen switch is clear.

Just look at the stats behind four of the biggest ‘cross-gen’ games (titles released on both the old and new consoles). Launch sales of Thief, Watch Dogs, Metal Gear Solid and Wolfenstein were, on average, 75 per cent on PS4/Xbox One, and 22 per cent on Xbox 360/PS3 (the rest on PC).

These figures are surprisingly consistent, and we expect Xbox One/PS4 to represent around 80 per cent of cross-gen game sales by the end of the year.

So that just goes to prove that the publishers are right to place an increased emphasis on the newer machines. Especially when you consider the pre-owned market for PS4 and Xbox One is still relatively small versus the previous consoles.

Yet there are still 20 to 25 per cent of gamers that want titles for their older machines.

According to GfK Chart-Track, the decline in sales of 360 and PS3 games so far this year is currently 30 per cent in units and 37 per cent in revenue year-on-year.

That sounds like a worrying figure, but that decline is not as severe as in previous transitions (see ‘Comparing the Transitions’ below). Also you have to factor in a decline in the number of PS3 and 360 games released at retail. 74 games have launched on those machines this year versus 97 at this point in 2013, a decline of 24 per cent (again, all Chart-Track retail numbers).

Indeed, current-gen has not dropped off a cliff as first feared. 360 and PS3 sales are gradually declining and publishing sources tell us they still expect to do ‘significant volumes’ on these consoles.

So what’s the conclusion here? Well the industry is actually doing the right thing, supporting Xbox 360 and PS3, but not going over-board in doing so. And most of the big games coming this Q4 have a PS3 and 360 version, even if they are not part of the PR or marketing plan.

Of course the conversation will change when Microsoft and Sony cut the price of their older machines. Mainstream and younger gamers are moved by price (hence why The LEGO Movie game sold more on 360/PS3 than Xbox One/PS4). And with both Xbox 360 and PS3 still priced at well over 100, there’s plenty more potential in these ageing platforms.

COMPARING THE TRANSITIONS

GfK Chart-Track director Dorian Bloch compares the latest console transition with the last one…

With every new generation comes a decline on the previous. And as we’ve not had two major formats arrive at the same time before, in some respects the historical decline over previous generations was not as pronounced as it is here.

Here’s the history: Xbox 360 launched December 2005 and PS3 arrived in March 2007, a 15 month gap between the two. When PS3 arrived UK consumers were nine months away from a first Christmas sales season, an important time of year for console sales (53 per cent of PS3 hardware sales in 2007 came in Q4).

Also, many Sony consumers will have carried on with PS2 even when Xbox 360 launched – let’s not forget that when it arrived at the end of 2005 there were 8.5m PS2s in the UK. The PS2 was by far the dominant console and sold another 860,000 units in 2006, around the same as Xbox 360 that year (admittedly PS2 was pretty good value at just over 100, compared to around 270 for Xbox 360). In terms of software unit sales PS2 had its third best year in 2006, thanks to such a large install base.

There is another crucial point – PS4 and Xbox One have both been incredibly successful combined sales after six months on these two compared to the first six months of 360 and PS3 equivalent is over 60 per cent ahead in terms of building a meaningful installed base.

And with current gen success comes a tra