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Consoles, as we know them, are dead. But core games aren't.

OPINION: As sales slump and the next-gen looms, the way we play games is set to change forever, argues PSM3's Dan Dawkins

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"There's no middle ground", says Kern. "You're either an indie game or you're a massive AAA, IP-backed sequel with derivative gameplay, as it's the only safe bet you can make when you're spending hundreds of millions of dollars. All the games in the middle have been squeezed out and we've seen all these independent studios get closed down."
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Closed for good: Bizarre Creations

Over the last year, developer closures include Bizarre Creations, Black Rock, 3D Realms, Codemasters Guildford, Factor 5, Grin, Hudson, Kaos, Juice Games, Propaganda Games, RealTime Worlds, Shaba Games and EA Bright Light. Fewer developers mean fewer games and fewer, risk-averse, publishers - and fewer original £40 boxed games.

Risk and innovation now belongs on PSN or XBLA, with download-only games, like Journey, Flower, Fez and The Unfinished Swan. Yet critical hits like Journey only exist due to large subsidies from Sony, looking to create brand equity for PS3 as the home of 'original' games, even if they make a loss. Journey is PSN's fastest selling game of all time, but Sony won't release sales figures.

The riskiest stuff, redolent of the mad £1.99-2.99 Spectrum 48k cassette games of the 1980s (Rockstar Ate My Hamster, anyone?), now exist on iPad, iPhone, Android, Facebook and web browsers, not to mention full-blown PC free-to-play titles. "The model is transitioning away from these big boxed games where you're pouring hundreds of millions of dollars into a title, to these sorts of games that don't count on the distributor," notes Kern.

A key signifier of the shift in power - or rather, money - from AAA games, to social or free-to-play games is the movement of key staff. Ex-EA COO John Schappert recently left the publishing giant to join social games firm Zynga (of Facebook Farmville fame). "Traditional games have become more (hard)core," notes Schappert.

"They require an expensive console, use a controller which laymen are afraid of, and their interfaces are not always the easiest to use. People are buying fewer games and playing them longer. A lot of players are stretched for time - they don't have two hours, they have fifteen minutes and don't want to spend money."

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Top seller: PSN's Journey

EA are acutely aware of ageing audiences for console games - a recent ESA survey suggested the average US gamer was 37 years old. Older, savvy, gamers crave complexity, but for newcomers, getting to grips with John Madden NHL 12 is like learning an alien language. EA need to stop selling complex products to an ageing audience, and find a way to target younger fans.

That's the real battle - time. Or rather, value. Sega's Vanquish is arguably this generation's finest third person shooter, but costs £40 for six hours of solo-play, with limited replay value (at £7 ish an hour). Solo-player RPG Skyrim offers 200 hours of value at the same price (at £0.20 per hour). FIFA and Call of Duty are primarily online games, existing almost as a service -literally in the case of Call of Duty: Elite.

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