Deciding when to build a game console's successor and how to measure it

You are a PM for a gaming console. Explain what would lead you to build its next generation, and how you would measure whether the new console succeeds. ### Clarifying Questions - Is this console the market leader or a challenger, and how many years into its life is the current model? - Is the decision whether to build a successor at all, or when to launch one the market already expects? - Should the console be treated as hardware alone, or as the whole platform, including its games, store and online subscription? - Are alternatives in scope, such as an upgraded model of the current console or putting the budget into cloud game streaming instead? ### Part 1 — The case for a new generation Lay out the reasons that would justify building the next-generation console, and the evidence you would want before committing to it. ```hint Follow the platform's money Ask where a console business actually earns its money and what limits those earnings as the current hardware ages. The signals that answer that question are your reasons to build, or to wait. ``` #### What This Part Should Cover - The business model behind a console and how an aging generation erodes it. - Concrete triggers for a successor and the evidence that would confirm each one. - Alternatives to a full new generation and why you would or would not choose them. ### Part 2 — Measuring success Define how you would judge whether the new console is a success, from launch through its first years on the market. ```hint Think in phases At launch, sales are often capped by how many units can be made, and hardware is only part of the platform's revenue. Ask which measures reflect real demand and platform health at each stage of the console's life. ``` #### What This Part Should Cover - A north-star metric tied to the platform's goal, with supporting metrics and guardrails. - How the metrics shift from launch to the first year to the mature phase. - Benchmarks that make the numbers meaningful, such as the previous generation at the same point after launch. ### What a Strong Answer Covers - The console's role in the wider platform and the goal the next generation serves. - A clear link between the reasons for building and the metrics used to judge success. - Trade-offs such as backward compatibility, launch price versus hardware margin, and timing against rival launches. - Risks including weak game developer support, splitting players between generations, and supply shortages. ### Follow-up Questions - Launch stock sells out, but six months in, the share of owners who play every week is below where the previous generation was at the same point. What do you investigate? - Leadership asks whether to skip new hardware and put the money into cloud streaming instead. How would you decide? - Should the new console play the current generation's games? Walk through the trade-off.