Alex St John, the former head of DirectX at Microsoft and now CEO of Wild Tangent has recently stated that gaming consoles will be dead by 2020 and that micro transactions are where it’s at.

“I think you’re looking at the last generation of game consoles, and I think it’s easy to defend that position,” he said while speaking at the Wedbush Morgan Securities annual Management Access Conference.

St John has always had an eye on the future, and a finger on what’s the next ‘hot topic’.  He believes that games will eventually shake themselves out into two distinct communities: One that enjoys a certain type and format of a game, with others enjoying another.  Could he possibly be alluding to ‘First Person Shooters’ vs. ‘MMO fantasy’ games?

From this split St John takes it a step further.  “I think the business model in ten years … It’s going to be microtransaction based. Microcurrency-based economies are just the most efficient way to maximize revenue. They work really well.”

In game advertising is a second shakeout from this split.  “It’s a great alternative payment type for kids who don’t have access to online currency and are huge game players. So, if you don’t have any way to take money from kids, then the only way to get kids to play is by advertisers marketing to them.”

St John sites and targets data based on the current upswing in global laptop sales.  “Kids especially need laptops due to the evolving type of homework and in-classroom work being assigned at schools. Gaming devices are usually confiscated at school, but “no one’s going to take [the kid's] laptop away from him because they need that for their homework.”  This lends itself perfectly to a community driven, gaming society specifically targeting micro transaction and advertising models.

“Laptops are fabulous gaming devices with Wii-like graphics, instantly tied to community, 100 per cent online and a vast volume of free play for kids who don’t have credit cards.”