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Xbox One, PlayStation 4 -- and Apple? -- in the Age of Convergence


Can the new gaming consoles win out over the biggest trend in consumer electronics?

I know you kids think you're too cool for school, streaming the new season of Arrested Development from Netflix (NASDAQ:NFLX) on your Apple (NASDAQ:AAPL) iPad.

But let me tell you what things were like in my day.

When I was a kid and wanted to watch a movie, my mother would drive me to the video store and she'd pay $3 so I could watch The Goonies on a VCR that probably cost more than her beat-up Oldsmobile station wagon.

And needless to say, our 19" tube TV did not have a Retina display.

How about music?

Man, you don't even want to know what used to go on, but I'm going to tell you anyway.

There was no iTunes; there was no Spotify.

If I didn't have money to buy a new cassette tape or CD, I'd use my boombox to record songs off the radio and make my own mix tapes, one song at a time.

And do I have to tell you about how much C or D batteries cost?

Listen to hip-hop legend Nas discuss the old days here:

And what about video games?

Everyone I knew had a Nintendo (OTCMKTS:NTDOY) NES, or later on, Sega Genesis or Super Nintendo, but some kids had a Game Boy too.

Want to make a home movie? You had to go buy a video camera.

Want to do whatever people on computers did back then? Buy a computer.

So what's the theme here?

Well, it's simple: In the good old days of physical media, the world of consumer electronics was dominated by single-function devices.

My family had a TV for watching TV, stereos for listening to music, a VCR for movies, a camera for photos, consoles for gaming, and so on.

The lines started blurring during the onset of the Internet boom in the late 1990s. All of a sudden, all of my friends and I were using our computers to listen to music while our Aiwa stereo systems (remember those?) collected dust. And some enterprising buddies were learning to use their computers to record and edit music, and play with digital scans of film photographs.

Then, in the early to mid-2000s, smartphones were starting to enter the convergence game, though they were still pretty lousy. I don't know if you remember those days, but they weren't pleasant. BlackBerry (NASDAQ:BBRY) was the only quality mobile email device in town, and as a whole, the product class was not multimedia or Web-friendly until 2007's groundbreaking iPhone.

Fast forward to 2013, and the changes have been staggering.

Through increasing computational horsepower and innovative app development, mobile device functionality has evolved in incredible and bizarre ways.

Forget about just watching videos -- you can now shoot, edit, and distribute them on an iPhone, no extra equipment, not even a computer, required.

With Spotify, I have instant access to virtually all music in existence, which I stream directly to a Bluetooth speaker -- no computer or stereo to get in the way.

My iPhone 4S is a much better camera than the $400 point-and-shoot camera I bought back in 2004.
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