I apologize if this has already been said, though I believe it has not. The reason pc gaming is dying... (1)
...is not because of piracy (in any way), (2)
but because of simplicity. Firstly, you can buy any game for your xbox 360/ps3 and play immediately. No install, no wait, no EULA, no patches/drivers to find. (3)
Even MORE*** important is this: ***the high def television era has arrived. (4)
Computers have, for the most part, lost their edge over consoles. Five years ago the consoles could not compete with an average computer in terms of graphics/gameplay (mostly). Now a person needs a high end computer (3 grand from Dell or $1200 if you can build it yourself) to compete with the next gen graphics of a console. (5)
The greatest incentive for the majority of people, graphics, is won by the console. (6)
The price of a high end machine to run Call of Duty 4 at 60 fps on a pc is much more than the $400 one would pay for 360. (6)
For a PC game, users are much more vocal, and much more connected with the game developers/community than on a console. (7)
Now, on piracy: while it is easier to download software on a computer (bitTorrent), it can still be done on consoles. A quick mod and you can burn DVD's for play on your 360. (8)
[discussion of philosophical ideas concerning piracy] (9)
Here is a company who deserved my money. They achieved this by giving me something I actually want, not some run of the mill, garbage remake of a WW2 shooter. (10)
Those are the games that you should be enouraged to download, so these companies can stop diluting the gaming market with their terrible product, lowering the standard for all games across the board, and in essence, stealing our money. (11)
(1) PC gaming isn't dying. Not even close. It's influence is shrinking for now, at most. (ha, I made a poem) Years ago, before the Xbox came out, PC gaming was pretty near 80-90% of all videogame industry... stuff. What's happened is that the market (the people that play video games) has been expanded. It's no longer something computer nerds do in an attempt to recapture gold-from-the-past such as the Quest For Glory series or Shadow of the Horned Rat or something like that - the market has expanded to a MUCH wider audience. The percentage compared to the total video game 'stuff' of the PC is now a lot lower since Microsoft's ad campaign with the Xbox practically struck gold. But the same number of people that used to play video games on PC most certainly still do, and there are even a lot more than there used to be - spillover from the enormous expansion of video game enthusiasts (ironically).
What's happened is that, unfortunately, marketers have decided that the strength of their market lies in their fanboyish 'loyalty' to a very specific subset of game platforms (i.e. Xbox marketers say PS3/Wii sucks and so on). They could have really struck gold by befriending the PC gaming community instead of turning their uninformed hordes against us. Now they have engendered a lot of hate and distrust from the PC gaming community. So a big topic in the video game industry media is how 'oh yeah PC games are dead as doorknob, Wii/Xbox/PS3 is the future' etc. etc.
In reality, even incomplete sales figures show PC on top or at least very close (depending on which statistics you look at) when compared with the consoles INDIVIDUALLY. As a whole, combined console sales dwarf PC games, but that's meaningless. You think all the games sold on Steam or on SDC are counted in these statistics? The reality is most of them aren't. Most of these statistics come from retail sales in stores like EB Games, which might as well be called EB Xbox360/PS3 Games these days. It'd be sort of like asking Playstation Magazine about Wii sales statistics. The numbers are going to work in their favor. Self-fulfilling prophecy and all that...
What's REALLY surprising is how WELL PC gaming is doing when you consider that publishers and developers have gotten lax and tend to churn out crap that might do well for the fresh console market but will utterly disappoint the more demanding PC market. It's depressing to think that I used to buy games regularly in the 90's, but now I have to mill around and LOOK for good games to buy. Fortunately there are beacons of hope like Stardock, Valve, and Blizzard that don't play the industry-is-going-through-another-phase-pc-gaming-is-dead game.
(2) I'd have to agree here. 10 years ago, if people didn't buy your game, it sucked. Now if people don't buy your game, it was so good that everyone pirated it. That's their story at least. Yeah Unreal Tournament III was a marvelous wonderful pile of bloom, why wouldn't people love it? (note: sarcasm detectors on, please)
(3) This is definitely one of several reasons that a person might prefer a console gaming environment over a PC gaming environment, but the biggest reason that dwarfs all other reasons is pure advertising. Also, things like this and marketing fool everyone into believing that you can only go console or PC and not both as you obviously have (even I have one of the current consoles in my dwelling).
(4) Funny thing about that. If I had the choice between buying one of those TV's and upgrading/buying another computer, guess what I'd do? Certainly a lot of people like their HDTV's and that's a factor in getting a console, but if you're gonna cite the cost of PC power vs. console power, then you need to include this in your figures.
You are right in a way. The 1920x1080 is a very large resolution which most people don't have available on their PC's (probably only very few have larger than 1280x960 or so), but unfortunately the TVs seem to have arbitrary sizes such that the wonderful richness of the resolution is lost in really ugly stretching - this is not a big deal, but it is something I personally notice that bothers me. The games look great in a store with a 'TV' the size of a 1920x1080 monitor, but beyond that the image quality suffers.
(5) See (4). This might have been true a few years ago when the consoles first came out, but now I can buy a whole machine for less than 800 USD that will absolutely destroy any console in terms of performance. Most people won't have to do this. They have future-proofed their past purchases and only have to upgrade their video card and/or processor. 400 USD buys a nice Core2Duo and a 9600GT.
(6) I'm gonna have to disagree here. The actual greatest incentive is game quality. It's funny though because publishers like EA believe their own lies these days. The graphics issue is just another advertising my-peen-is-bigger-than-your-peen plug (same as it is on the PC). I remember when graphics used to be a selling point. These days it's all they're selling.
(7) This is one of the major advantages a PC has over a console (the other is the interface). Until consoles become totally EQUIVALENT to PCs, they won't have this.
(8) This is the issue I was talking about earlier. Game publishers jump on the console bandwagon because they've fooled themselves into believing that piracy is killing their PC market. The mistake is that, IF piracy was such a big deal on the PC, it will eventually be just as big a deal on the consoles. There's only ONE step of difference between a PC and a console to pirate a game - burning the physical disk.
(9) As a former musician, I've always held the belief that, if people will not buy my music, I'd rather them download and listen to it than not listen to it. This is the essence of the difference between stealing cars and infringing copyright. Still, if you like something, support the people that make it available to you. Not only is it right, but it makes the world a better place.
(10) Bang-on. These guys make excellent quality games, and they have had a lot of success. It took them a long time to get here, but they have grown from being very small and fragile to having loads of money - I can't wait for the turn-based fantasy game and the Sins expansion.
(11) I would think it would be best to encourage people not to even TOUCH or think of games of low quality. Don't even give them the piracy angle. Just refuse to have anything to do with crap games. This has the advantage of being legal

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It'd be interesting to hear more people with console+PC.