Since this generation began, Microsoft has been behind the 8 ball. The initial Xbox One messaging was poor, the forced Kinect unpopular, and the price point wrong. Microsoft, despite coming off of the success of the 360, had made a large miscalculation and Sony, doing what any smart company would do, took advantage of it. By launching the more powerful PS4 at $100 less, they jumped out to a lead that has continued to grow over the past three years. This turn of events, of course, has been discussed ad nauseam.
Microsoft recognized the mistakes relatively early and on March 31st 2014, made the best decision for the Xbox brand they had in several years – they put Phil Spencer in charge. For those of you unfamiliar, Phil is a lifetime Microsoft employee who has held several important Xbox related positions over his career. But most importantly, Phil is a gamer at heart. And as a gamer, he has driven a much more focused vision for the Xbox brand which has seen one of the most positive 180s I have seen in my lifetime within the industry. Let’s look at how this relates to Sony’s press conference yesterday.
At the Playstation Meeting yesterday, Sony laid out their vision for the PS4 platform for the foreseeable future. As Seasoned Gaming covered during the live event yesterday, this includes a redesigned PS4, the PS4 Pro, and PS VR. Much of the philosophy behind the market direction is shared between Microsoft and Sony. It’s clear the console market is moving to a hardware release schedule that is more in line with other industries due to the speed at which technology advances today. As such, console releases will be more frequent, but with less major change. While I personally applaud the decision, I think Sony has now made a series of missteps and Microsoft will certainly attempt to capitalize. To elaborate, the redesigned PS4 is essentially what we would all normally expect. It offers the same PS4 functionality but in a cheaper package that runs cooler and quieter. It also, according to Sony, will offer HDR support. However it will not offer 4K capability, neither streaming nor by disc. Although maybe considered minor, it also scrapped the optical port which will negatively impact a percentage of the community as well. Looking at the PS4 Pro, it is substantially more powerful than the standard PS4, however doesn’t seem to be the leap forward people were hoping for. It will not offer true/native 4K gaming, will run multiplayer games at the same frame rates as the standard PS4 (according to Sony yesterday), and in a truly bizarre decision, it won’t even offer 4K Blu-ray playback. While subjective and less important, it’s also worth noting that the design of each console is already catching a large amount of criticism across the web as well.
Microsoft then, seems to be in a very powerful position for the first time this generation. The Xbox One S by all accounts has been a resounding success. It’s sleek design, low price point, and supported features have been very popular and Microsoft is further driving it home with games bundles and sales offers. What suddenly makes it even more important after yesterday though, is the fact that the Xbox One S offers 4K streaming and Blu-Ray playback at the same price point as the PS4 Slim, which does not. This has already been a boon for the X1S and will likely only increase its popularity as a larger percentage of the population adopts 4K TVs over the next few years. On the entry level then, the X1S has accomplished exactly what it needed to do in comparison to the PS4 ; it matched the PS4 in price while still offering additional features.
With PS4 Pro and Xbox Scorpio, Microsoft very clearly put Sony in an awkward position at E3 and reflecting upon it now, it seems they planned it all along. Hardware design and production scheduling are completed much further in advance than most realize and it’s clear that Microsoft knew they could deflate Sony by announcing Scorpio this year, especially as they were the first major E3 conference. Before the show even began, the Neo and Scorpio specs were leaked and speculation had already run rampant across the web. After Microsoft’s conference it was rather clear that the Scorpio was indeed going to be a huge step forward and that left Sony in a strange position with the less impressive Neo. They ended up acknowledging Neo was real prior to their conference, but didn’t formally announce anything. In fact, up until yesterday, they had said nothing further at all. This only ended up leading to further speculation that the Neo had potentially been sent back to the drawing board after MS’s Scorpio announcement. But again, realizing the time it takes for hardware design and production scheduling, this wasn’t the case. Rather, after yesterday we now know that Sony was working on messaging and has thus countered by releasing in 2016 at a price point lower than was speculated. Naturally, being first and priced competitively puts Sony in a good place for late 2016 and into 2017. But with these mid-cycle releases, it will likely be another 3-4 years before we see another update and as such makes Scorpio even more important for Microsoft.
Comparing the Pro and Scorpio on paper exhibits the opportunity Microsoft now has in front of them. While the X1S is well positioned against the PS4 Slim, the Scorpio gives MS the opportunity to emphasize that they will offer the highest quality console gaming option for the next 3-4 years. In a strange way, the PS4 Pro seems like the half measure Phil Spencer very clearly stated Microsoft wanted to avoid. While the console is significantly more powerful than the standard PS4, to truly reap the full benefit of its features you will need a 4K/HDR TV. While this is true of Scorpio as well of course, for those who are investing in higher end equipment, the Scorpio should only further demonstrate its more advanced processing power. When you reflect on this generation to date, the comparison between how games run on the PS4 and X1 has been at the forefront. It has been a much larger factor in sales than was anticipated and the PS4 has maintained an advantage in that vein since the start. Microsoft now seemingly has the opportunity to reverse that trend entirely. Given the substantial power difference, Scorpio versions of games should run at a much higher fidelity than PS4 Pro versions and at times, likely even in native 4K versus upscaled 4K. It means those consumers who invest in upgrading their TVs, home theaters, etc…..and want to take advantage of those features to the fullest, are going to have a clear option for best doing so. And you can bet everything you own that Microsoft will make this known to the world.
One of the tropes often trotted out at this point would be “If people want the best quality they’ll just build a PC anyway”. There are two issues with this misnomer. First, the percentage of consumers who are leaving consoles behind to suddenly build their own PC for exclusive gaming isn’t as large as some like to believe. The console market is booming with systems selling at a rate faster in this generation than any generation before it. While some may indeed move to PC gaming exclusively, there is still a very large market for having a powerful, plug and play console. Second, Microsoft is attempting to further blur the line between PC and console gaming with Windows 10 and Play Anywhere. Digital copies of the major Xbox exclusive games are playable on your Xbox or PC and in bringing those communities closer together, Microsoft is brilliantly offering more choice for consumers while simultaneously casting a bigger net for sales. And in that area specifically, Sony has no counter.
There’s an aspect I haven’t mentioned yet that will come into play very soon, and that is VR. Playstation VR launches next month and will be the first console VR headset offered to consumers. It’s safe to say that all eyes will be on PS VR and how well it is adopted by the average consumer. Microsoft seems to be planning to combat PS VR with their own VR capabilities using Scorpio and third parties, but at this time that’s about all we know. As such, we will have to wait to see how it unfolds for both companies over the next 12-18 months. I’m sure that will be fun to watch as well though I personally don’t believe it will be a large enough market to drastically shift sales of one console or another.
In short, it feels like Microsoft has taken another step towards burying the Xbox One’s messy past and is moving forward with confidence and focus. The X1S is already a success, Windows 10 cross buy/play has been revered by most, and the Scorpio has the chance to be a game changer in the console market. It feels as though the Xbox One platform has been revived. I’m simply surprised it’s Sony helping to hold the defibrillator.
Thanks for you artical. A very good read.
Great article, MS was really ahead of things this year
Thank you – appreciate it.