Why There Are No Game Console App Stores

At yesterday's Playstation 4 announcement, Sony kept hammering home how just unimaginably fantastic the PS4 is for developers. And they're right: the new x86 architecture is definitely a more familiar environment than the exotic Cell.

But the whole time I sat there thinking, "Developers, right, got it. So when are they going to announce the PS4 SDK and App Store for smaller guys?"

It never came. I watched all those folks come on stage and talk about how great the new Playstation is for them, and they even had Jonathan Blow show up to fill his almost obligatory place as indie ambassador, but they never did announce an App Store that normal programmers like me could take a shot at.

It wouldn't have been unexpected. When the Apple App Store was first announced in 2008, to me it seemed like a no-brainer for console makers to follow up with their own version. Five years later, Apple has hundreds of thousands of products in its store, and by far the most popular of which are...games. That's proof enough that consumers, non-traditional gamers especially, will download games from a marketplace in droves.

But it never happened on the consoles. Microsoft had an Indie Games store, but it was notoriously disregarded and under-promoted. Sony and Nintendo remained gardens with high, high walls. Why does this make sense for them?

The problem is money. Console hardware is generally sold at a loss or at cost; the producers make their profits from software. This includes fees and licensing from conventional boxed games, paid DLC and expansions, media and content sales, and (increasingly) advertising. Those are in a rough sort of descending order; boxed games are especially great for Microsoft et al because they're expensive and relatively hands-off.

But when you've got an App Stores, you've got a race to the bottom. Even if you artificially impose a price floor of something like $9.95, that's still $50 cheaper than the latest Halo. Given enough time, some developer will make a great looking and popular game at that low price point (or, more likely, for free) and lots of people will start to wonder, "Are Halo 5/KillZone/Zelda really worth $60?" And as soon as that idea is incepted into consumer's collective subconscious, all those big-ticket games start looking more like dinosaurs. The market becomes bimodal: either you're a massive AAA-budget game like Halo, or you're a low-cost indie game.

Console makers are already being faced with three new (and cheaper) developments in that direction: the OUYA, the Steam Box, and the lingering specter of Apple properly entering the space with an Apple TV SDK. These folks might not get giant Call of Duty-class exclusives, but they'll get more than enough independent games and apps to stay competitive on on their bottom line.

So what was the vibe I got from the PS4 announcement? More of the same. The market is evolving, and Microsoft, Sony, and Nintendo will eventually have to cannibalize themselves to keep up. And while Sony didn't announce anything radical yesterday, and Microsoft's plans are still unknown, both still have time to change the game.