We are at the cusp of a generational shift in the living room. The Nintendo Wii U, the sequel to the most popular game console in history, was just released. It was the first in a series of salvos aimed at transforming the TV, the next up is the indy darling console from Ouya, then the new Xbox, then perhaps Apple, and there are rumors of Valve entering the fray as well.

Is it even worth it? 

The tablet feels like the future, and it certainly is. With that in mind it’s easy to look at the set top box war as something akin to the war between HD-DVD and Blueray, a kind of annoying sideshow on the way to an all digital media future. Isn’t everyone just going to play games and watch movies on their iphone and ipad? 

I don’t buy it. 

It’s worth remembering that in games, this has happened before. 

Back in the day there were consoles, and they were awesome but getting a little long in the tooth. Then this new, mobile, portable, device came out that changed everything in mobile gaming. Yes, the graphics were worse than a console, but it was in your pocket convenience, and it was multiplayer. And it took off like a ROCKET. 

It was the Nintendo DS. Every kid got one, they were transformative in a way that the Gameboy never was. And once they played, they engaged socially in Mario Kart, Pokemon, and other games in places they never could with a console. The average number of minutes of kids playing games went WAY up, and with games like Nintendogs & Brain Age there were a whole group of non gamers (mostly older women) who bought it as well. 

But, a funny thing happened. This huge mobile explosion of play, of convenience and disruption that is textbook Innovators Dilemma, it DID NOT cause the console to die. You would think it would make the console suddenly “niche” and just for hardcore users. Somewhat like what the iPhone is doing to the compact camera market, but it didn’t. 

In fact, it just expanded the market for consoles. It made more people think of themselves as gamers — it paved the way for a new generation of consoles (like the Wii & Xbox) to become the fastest selling, highest penetration consoles ever.

It’s worth noting that during the last few years TV watching has not gone down. And while retail sales of consoles are down, overall time spent is up. While there may be some replacement play, the much more important trend is that the ”media pie” is getting bigger overall. It is more about expansion of the market than cannibalization. 

The tablet is a new world for media, including gaming. It’s amazing. It will likely kill the DS, for sure. 

And it will introduce a whole new generation of people to consider themselves gamers, or re-find their gaming past. 

And then some subset of those users will buy a console to enrich their experience. It won’t be “powered by their tablet” the same way the DS didn’t power the Wii. Because it’ll be inspired by, but not the same, experience. It’ll be something new, and fresh, and interesting - and it is just as likely to come from incumbents as a new upstart. 

My colleague David Haber wrote a great piece on marketplaces over at Techcrunch this week. And today we announced our investment in one such marketplace, the luxury goods leader 1stdibs, along with Index and Benchmark. 

Marketplaces are popular right now, but they are certainly not new. Ebay, the mother of all online marketplaces was founded in 1995, and spawned a cottage industry in the late 1990s. The one in particular I remember was the classic “only in the go-go 90s” marketplace, Nets Inc. 

Suffice to say, virtually every possible flavor of marketplace was tried in the late 90s and most failed. So why has this remained ripe territory? There is no denying the results, from Etsy to Skillshare to Kickstarter to Workmarket to Airbnb, there has been a steady stream of good companies.

I think it’s a fairly simple reminder that we are still in the early stages of software “eating everything.” There are many businesses in the late ’90s that were simply too early, but probably none would feel it so strongly as a marketplace. Without ample liquidity in both sides of a marketplace, that startup would crash and burn even faster than most. 

So as more types of consumers, and more types of business, come online there are increasingly more opportunities to help them find liquidity for the goods and services they can offer. And if that isn’t enough, mobile smart phone penetration means we are just now getting to real liquidity for mobile first marketplaces. 

My seven year old son will choose an iPhone/iPad every time over a TV, Wii, Xbox, or Nintendo DS given the chance. I know of some parents who are very nervous about this trend and are careful to limit their kids iPad use, while at the same time letting them watch hours of television. For the most part I would easily trade 15 minutes of passive media consumption for 15 minutes of interactive entertainment. That is, if the content was of similar value.

Unfortunately even with thousands of apps to choose from, it doesn’t feel like there is a company that has gotten that right mix of entertainment and education for kids. In a way, it feels the way television must have felt before Sesame Street.

Sesame Street was started on one simple idea, what if we could make education “go down more like ice cream than spinach.” It is both an education and an entertainment company. And it succeeded in providing beneficial pre-school education to millions, and also be something that kids actually wanted to watch. In 1979 fully 83% of U.S. pre-schoolers watched Sesame Street.

Today it is still a major force thanks to a revamp a few years ago, and is the inspirational model for two full cable channels of programming that parents can reliably turn to, PBS Kids and Sprout. But on mobile the model is different for me and my kids.

While I control what they download onto the device, they control what they end up spending their time on. I may download Stack the States, which has hovered in the top 10 Education apps for some time, but my son spends most of his time playing Mino Monsters right now regardless.

In more reductionist parlance: parents = installs, kids = dau, both = rev/dau. What’s missing is a company that creates wildly entertaining content, but in a way that educates. I’m curious if others have found apps that strike that balance for their kids. It feels essential, not just for what I personally want at home, but in order to compete in the mobile world where there are two masters of the mobile kids minute. 

You would think the story of how Spark came to be investing in Picturelife would be simple enough. After all the Founder, Charles Forman, was also the founder of OMGPOP, another Spark portfolio company. But actually Charles had been keeping a low profile with his new gig, so it initially came to our attention in the best way possible, as a user. 

I used to categorize, tag, and lovingly care for all my photos on Flickr. But the product stagnated over time and, thanks to the cameraphone, the volume of photos I take has gone up so much that that those old solutions didn’t seem to apply anymore. 

In Flickr’s place was Instagram and Facebook. They are wonderful experiences, but they are communication mediums for the 1% of photos worth sharing. What about the other 99%?  iCloud was great but I want more than the last 1,000 photos on my device, I want all of them, and shareable to the services I care about like Tumblr and Twitter without hurdles. Google, and Microsoft had solutions of course, but they seemed more obsessed with locking you into their platforms than creating new experiences.

Finally the team at Picturelife let us in on their project. I was hooked. Hooked on the product, on the vision for where it was headed, and hooked on the team. 

Charles, Jacob, and Nate talk with passion about the subtle difficulties of managing our ever-increasing collection of photos in ways that are universal and understandable. They talked about how Gmail made you never want to delete an email, and what a photo interface might need to be some day in order to achieve something similar. 

We’re glad to be partnering with Charles again, and to be supporting their mission to safely store the 360 billion photos taken each year, organize them beautifully, and make them accessible everywhere.