The Confusing Future of Microsoft's XBox/One/X/PC/??/360
What is Microsoft’s strategy?
That’s the question that I can’t quite answer after today’s presentation.
If you are touting a function which claims you don’t need to buy the next console for two years…..then why even make the next-generation console at all? If you are claiming that all these upcoming games announced in the presentation will be part of Microsoft’s Gamer Pass, when why even sell the games individually when the moment comes and the games are released?
Is there really an advantage boasting having the strongest machine and yet make games that can be played on inferior hardware? Why would I need an XBox in the first place if you are going to make these games available on PC and XBox One as well? Why make promises that’s impossible to keep and risk potential financial issues in the future?
Seriously, what’s the strategy?
A lot has changed since the XBox 360 became the most successful American console in the history of gaming. Microsoft was even temporarily on top of the gaming world before Nintendo Wii’s astronomical rise and their inability to make an effort in the final third of the seventh generation. Then came the disastrous launch of the XBox One which led to management reshuffling and a major alteration in how the console was being presented. Some will argue that XBox had a far superior second half, but its hard to make this statement when the company literally stopped revealing how much their console was selling towards the end of its run.
Nonetheless, momentum was there, they did make some good moves like the acquiring of many gaming developers, and the Game Pass, which is a good response to Sony’s Playstation Now and Nintendo’s why-the-hell-do-they-keep-screwing-this-up Virtual Console and Nintendo Switch Online. But with Microsoft leaning heavily towards this Netflix-esque service, the upcoming XBox is appearing more like a Stadia and less like a Playstation 5. This strategy could work….except its becoming its own biggest rival.
Flashback to last decade, when we saw the 3DS becoming one of the big crippling obstacles impeding the success of the WiiU (The name and horrific marketing was the biggest reason, but that’s another story). The Nintendo 3DS sold 8 times as much as the WiiU was because they had shockingly similar games from their first-party source (The Smash Bros. 3DS/WiiU incident being the most glaring instance); but the 3DS was cheaper, had a stronger lineup overall, and even had a superior Virtual Console.
The Nintendo Switch on the other hand felt like a sequel to BOTH the WiiU and the 3DS, with far stronger hardware and software and a grand amount of technological advancements and available games overall---minus its online service. The Switch as a result is selling like hotcakes because it is clearly an advanced version of previous ideas, it’s the best representation of what a Nintendo handheld can accomplish—while quadrupling down on their first-party games (Breath of the Wild and Mario Odyssey in the SAME year was Nintendo’s finest hour) and indie game accessibility. 60 million in just three years, insane numbers Microsoft has never been able to pull off.
The XBox Series X has none of this “advancement” sensation over the XBox One. Its already been determined that the upgrade from the eighth generation to the ninth in terms of graphics won’t be as obvious as previous gens across the board, which is why you are going to need a different technique to selling your future console at launch time. For Nintendo, they are riding this Switch momentum until its clear the software is beginning to dip in sales and the games are multiple generations behind the competitors. Sony’s conference earlier this summer had clear emphasis on a barrage of upcoming software that’s taking full advantage of the new graphical horizons. Microsoft, their strategy is increasing the available options on where to play your games with a subscription service.
This could work…with the right approach, which I’ll get to later. But marketing-wise, this has become a nightmare. Just ask Sega and their marketing team what happened to them when they had literally 5 pieces of hardware on the market at the same time—and then give them time to cry before they respond.
Basically, Microsoft is boasting a new piece of hardware that may not even be a necessary purchase for years because everything this holiday season will be available elsewhere…supposedly. As of tonight, suddenly the tide is shifting with some of the exclusive first-party games losing their moniker of being available on the XBox One. So after months of toting this giant web of connectivity, there’s a chance Microsoft is already backing from its word, which already was a questionable word in the first place since it was devaluing an upcoming brand new console. Zero chance you can launch the XBox Series X at cheaper than $400 despite its apparent unnecessariness.
So Microsoft has to find a way to convince everyone to buy the new hardware (now or eventually), keep pace with the price tag and (clearly far superior) new-gen lineup of the Playstation 5 as well as the eventual Switch Pro, while probably having to scale back their software’s capabilities since they need to be a) part of a multi-hardware online subscription service and b) be backwards-compatible with said older hardware. They now have to convince gamers to still spend $30, $40, $60 on games when Game Pass is going to cost just $120 per year (for now) and will include (supposedly) the same games being sold at full price. This entire thing is jumbled, as instead of forward progress, the console to console timeline is unilateral.
What would have made the most sense for this generation was for Microsoft to continue to offer select classic XBox, XBox 360, and XBox One games (not entangled on copyright restrictions or shenanigans) on the Game Pass for PC and the One, and make the same service extremely cheap on the Series X—perhaps even making it free for a year or so. Then, include a deeper retro lineup and exclusive indie games on said Game Pass for the Series X. That way at launch the new console already is pre-packaged with 100 or so games. With this “superior” hardware, they should have made it fully backwards-compatible to literally have thousands of playable games from the past at launch. This way you can give life to the last-gen XBox One and PC, while potentially attracting new and old fans to the Series X by offering a more expanded backwards-compatibility service and exclusive online games.
Instead, Microsoft promised NEW games to be included in the service, and promising you can play them on the XBox One. This negates value of your new hardware, and is going to force you to go back on your word----which as I previously stated looks like may have already happened with the upcoming Forza and Fable. Also, even worse, might force you jack the price of the Game Pass, giving Sony and Nintendo the ability to lower/maintain their prices of their online offerings. So instead of a cool couple million buying the Series X at launch, you risk seeing gamers and fans just keeping the Game Pass and (maybe) buying a game or two during the holiday season, skipping Series X altogether.
Worst case scenario, this is what might make the difference between $40-$50 million off of Game Pass and scattered software purchases and the near billion you could have earned from a successful holiday launch. Its just so strange that a company who historically saw their market share in computers get hit hard because Apple’s annoying exclusivity mannerisms would go the opposite direction and commit the mistake to be so open and free to promise NEW software on multiple other cheaper options. Its just hard to see the profit margins of offering a service full of $30-$60 games at $120 per year on multiple areas with their most expensive console right around the corner.
It appears that Microsoft is banking on their full Game Pass freedom to appeal to their hardcore crowd and hope that their loyalty will result in them collectively trading up to the new console without sacrificing any previous games. However, you can’t draw in new fans to the Series X when it would be cheaper for a Sony or Nintendo fanboy to just get the XBox One down the road and have the same access to games. Potential new fans in my eyes would be better off diving into the second-hand market, get the cheaper hardware, and be able to play the newest Halo on the One instead of the Series X.
The Google Stadia is proof that going pure digital isn’t going to work in the gaming industry unless you can wildly step up on your software output and your first-party quality---which Google has NONE of. The rest of the gaming industry remains mostly hesitant on going fully digital because the consumers still prefer their hardware options for guaranteed gaming regardless of how the internet is running, still prefer the ability to purchase older games through second-hand markets, and enjoy the collectability aspects of being a gamer.
Microsoft notoriously remains the weakest of the Big 3 in terms of first-party content, so its baffling to make the upcoming hardware even less of an exclusivity draw by balancing focus on the new with the old. If Halo is THE system-seller, why include the latest installment in your new machine AND your old one? It worked for Nintendo’s Zelda games on the Wii and Switch because the hardware was dramatically different (Gamecube to Wii, WiiU to Switch), and because Zelda sells everywhere.
I just don’t get it, and today’s presentation is proof that Microsoft has many holes to fill if they ever want to take the crown from Sony (or Nintendo if the Switch continues its torrid streak). I want a close race, similar to the mid-2000s when Playstation 3 and XBox 360 were neck-and-neck from beginning to end. But if today is any indication, we might not see it because Microsoft’s muddled and confusing strategy isn’t investing enough in its actual future.