This is an unlikely scenario but one that is kinda fun to think about. First, PC gaming might as well be called Windows Gaming. Sure there are Mac and Linux games out there, but the primary market is Windows users. Second, Microsoft created DirectX and it's competitors, specifically OpenGL, while not dead really have never done as well as DirectX. Third, Microsoft seems to be pushing Windows 8 in to the HTML5, web scripting world. It's unlikely that the power language support will be removed, but for the sake of this thought experiment, lets assume that Windows 8 doesn't play games as well as past versions.
In all three of those situations there are weaknesses, but lets assume the worst case scenarios.
Microsoft own Xbox. They own Windows. What if a business decision was made to make Windows more of a web based OS, focusing on what a majority of computers are doing these days, email, web, social networking. Microsoft could argue that removing the power to do gaming on the PC would drive more business to the Xbox market because those power gamers would want the better gaming experience. DirectX would still be developed, but just for the Xbox.
One argument is that the Xbox is basically a computer already so why limit the development environment to just Xbox? Because PCs are loosing relevance. Outside the business a PC is mostly used for web related items. Yes, there are power users and there will always be a niche for them, but the average home PC user has limited need. Outside of gaming, I use Chrome and iTunes primarily, occasionally opening up Word, Excel, or Photoshop. Since I don't usually do power image editing, I can say that I could probably do most of my work with HTML5 apps, that in theory would work great on Windows 8. The gaming is what keeps me using a big powerful PC. Microsoft hasn't yet convinced me to buy an Xbox 360 and migrate. So what if they pushed me?
Sure I could stay on Windows 7 for years, just as so many have stuck with Windows XP. But if Microsoft is no longer supporting gaming on Windows, the game publishers would quickly stop developing games for those older platforms. I'd guess within a year most marque gaming titles would be on consoles exclusively. So to play that cool new game I'd have no choice but to buy a console.
Those power users are what could keep things from going this way. Graphics card makers and premium PC makers would certainly have some incentive to keep the PC gaming market going. There are also going to be those users who don't want to give up the power they currently have. Would the market perhaps shift to Linux? Maybe, but we've seen time and time again projects that are in the Windows world not being able to migrate to Linux. I doubt it's technical. Business reasons have to be getting in the way. Those business reasons aren't going to just disappear. Is the power user/PC gamer market large enough to move to a new OS platform?
PC games are still the best looking and most powerful. There are still certain types of games that don't translate well to consoles. But the writing has been on the wall for a long time; PC gaming is dying. That could either mean that it's just like the doom-sayers who keep predicting the world will end and it never does. Or, the end could really just be right around the corner and we are simply in denial.
I for one will keep gaming on the PC until I can't any longer. The current console wiz-bang features still aren't compelling enough to make me fly into their arms. I've right on as the average gamer. So what can Microsoft do to make me move to the Xbox, except kill PC gaming.
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