Generations: A better way

It isn't your fault, but you have probably been using the idea of "generations" ineffectively. We all have for a long time. It's broken beginning probably went something like this:

40 year old business analyst, from here called Poor Guy, assigned to cover new video game market.

Poor Guy misinterprets Moore's Law and assumes technology will progress rather evenly through time and that power purely equates to computation.

Poor Guy mixes Moore's Law with Nash's Equilibrium and assumes console makers will always release new technology close to each other.

Poor Guy has a ridiculous idea that an entire industry of competitors is always going to release very similar, competing products at the same time and that an entire industry will move forward, equally, at the same time.

Poor Guy doesn't realize that this never happens in any industry, but borrows a term from product development and marketing and applies it to an entire industry. Poor Guy convinces a group of non-technical writers with no business analysis experience to also adopt the term.

An entire business culture begins using the term "generation" ineffectively which leads to massive confusion.

Generation is a term used in marketing and product development to associate a successive line of products that are targeting a very specific demographic. It is used in automotive, home entertainment electronics, computers, and just about every consumer technology industry. It is NEVER applied across an entire industry. It applied to a single product line. A new generation of a product both sets the consumers expectations by referencing an established product, but also communicates that this is a new version with new features to be excited about.

The reason it is never applied across an entire industry is because an industry encompasses many different demographics. In computing you may use Research, Business, and Personal demographic pools. In Automotive you might look at Luxury, Sport, Utility, and Economy demographic pools. In home entertainment you may divide products into Budget, High-End, and Enthusiast. 

For example stating "the 2012 Camaro, Corvette, Cruze, and Equinox are all 8th generation vehicles" isn't useful because they all serve different demographics and it isn't the 8th iteration of all of those models. It doesn't communicate useful information.

Instead if we use generations effectively and we say "2012 saw the release of a 5th generation Camaro, a 6th generation Corvette,  an updated 1st Generation Cruze, and a 2nd generation Equinox" we are communicating more useful information. Corvette and Camaro owners can expect sports cars, with the Camaro being the more affordable option, with new styling and new drivetrains. Equinox owners can expect a new compact SUV. Cruze owners know not to expect much. 

From this we can also see useful business markers. There are two sports models that are successful enough to receive several iterations, an economy model that is merely receiving an update, and a compact SUV model that did well enough to warrant a new generation. When looking for longevity it is easy to point to the Corvette, when looking for growth you can point to the Equinox, and when looking at a struggling market you can point to the Cruze.

Home Arcades, aka Video Game consoles, should be viewed in the same way. If we look at the product, not industry wide, we communicate a lot more.

The PS5 is the 5th generation PlayStation.

The Xbox Series S and X are the 1st generation of the Xbox Series (with X being the performance package).

The Nintendo Switch is the 1st generation Switch.

If we look at this we can expect that the PlayStation 5 is aimed at people that owned a PlayStation 4, 3, 2, and 1. Customers will get a video game console with high-end home entertainment technology. It is disc-based featuring a proprietary disc format. The controllers will be similar.

The Xbox Series S and X are a new model for Microsoft. The "chassis" supports two different performance specs to target two demographics, but ultimately will deliver similar experiences. Looking at the continued rebranding it is obvious that Xbox does not feel the need to leverage good will or brand recognition from previous consoles. This may be because of a lack of identity in the industry.

The Nintendo Switch is a new model from Nintendo. It is different from the Wii brand. Consumers should not expect a home console. It is different from the DS brand. Consumers should not expect a portable console. Nintendo's history shows that they have had more successful brand recognition with portable devices. There are also Nintendo Switch Lite and Nintendo Switch OLED models. The Lite is light on features and the OLED features an enhanced display. The Nintendo Switch has more in common with Nintendo's portable product and Nintendo is more likely to make one more generation of the product.

The Xbox Series S is a compact home console with a lower performance spec. It does not have any competitors in it's class.

The Nintendo Switch Lite is a portable console without any competitors in it's class.

The Nintendo Switch and Nintendo Switch OLED are portable/home hybrids that are competing with the Valve Steam Deck, also a 1st generation product from Valve.

The PlayStation 5, the lower trim all-digital edition PlayStation 5, and the Xbox Series X are full-size, high-end home consoles competing in the same class. Consumers have a base of expectations for the PlayStation 5. The Xbox Series X does not set any expectations outside of it's class performance. 

When used effectively, product generations tell us more about the product, the strategy, and the likely future of the product. If we look at how those products are trending, we can extrapolate data about the industry as a whole. We can see that there is a strong space for portable devices as there are two generation 1 products in that market. We can see that Xbox has started a new strategy and has found a way to offer a power upgrade without changing the "frame" of their product. We can see that PlayStation is more.or less using what has worked in the past as they hold the seat of continued success and industry power.

The whole purpose of words is to communicate ideas and information. Think about them and use them to best of your ability.