NextBox CES no-show: perspective on rumours

Tuesday, 10 January 2012 11:55 GMT By Patrick Garratt

It’s easy to believe rumours as fact, only to have hopes smashed in that all-important press conference. Patrick Garratt reckons everyone needs to get some perspective over the prospect of next-gen reveals this year.

At the moment, both Xbox 360 and PS3 are in the back-half of their extended cycles, which is exactly where Sony and Microsoft want to keep them for as long as they possibly can. These are the gravy years. The console business’s golden rule? Don’t piss in the gravy.

If you’ve been a follower of games news for more than a generation, you’ve been here before. In fact, this is all old news if you’ve been around for more than a few years. There is nothing more scintillating to specialist journalists and core gamers than new hardware. It’s the beat of the online games news heart, the wind beneath our moulting wings. If you want to see the community – professional and hobbyist alike – truly get its knickers in a twist, watch what happens when a platform-holder births a new console. It’s a thing of terrible beauty.

Unfortunately, it’s easy to forget that the signal to noise ratio of rumour to fact in the case of console reveals is exceptionally high. As difficult as long-term memory comes, it’s especially important to keep your wits about you this year as we enter the generation “danger zone” of new reveals from Sony and Microsoft. We’re already starting to feel the effect in terms of credible rumours.

At the time of writing, the idea that Microsoft will announce its next generation Xbox this year is transitioning from occasional rumour into expected fact. To illustrate just how easily rumours can get sucked up by the internet, the games world watched last night as Microsoft, inevitably, didn’t say a single word about its next-gen plans at CES, despite a solid rumour from Xboxygen sources late last year that the machine would be mentioned in some form at the show.

This comes in the same week as MCV boldly predicted, based on details from “third-party publishing sources,” that “both the Xbox 360 successor and a follow up to the PS3 will be shown at E3 2012.”

These stories are the latest in a string of light rumours in 2011 about the next console generation, some of which even claimed the next Xbox would release in 2012. We’ve already said why the idea of Microsoft shipping another machine this year is simply silly, but it’s important at this point to be wary of the expectation of even an announcement in 2012. Logically, it’s still too soon.

Tail-heavy

The console business is tail-heavy. In theory, platform holders subsidise hardware in the early part of its cycle before hitting break-even and moving into profit as components cheapen. This back half of a console’s life-span couples with high software sales and, hopefully, everyone involved makes their money back plus a great deal more.

At the moment, both Xbox 360 and PS3 are in the back-half of their extended cycles, which is exactly where Sony and Microsoft want to keep them for as long as they possibly can. These are the gravy years. The console business’s golden rule? Don’t piss in the gravy.

To get an idea of what can happen when you announce a new console before its predecessor has started to properly decline, take a look at the switch-over between Xbox and Xbox 360. Xbox was always designed to make a loss. It was a base investment by Microsoft, a multi-billion dollar risk to gain a foothold in Sony’s market. Microsoft went into reveal mode at E3 2005, pushed out Xbox 360 while the Xbox business was still active and essentially killed the former. This was a process by design to get a jump on PS3, but it illustrates just how severely a step forward can impact an existing console business. The chances of Microsoft making a serious announcement of a new console – as in unveiling anything at its E3 press conference – unless it were readying a release in the following months are slim. Yes, figures are down overall, but 360 itself is still very strong. Given the current vigour of Xbox 360 software sales and the cheapness of the hardware, it seems unlikely Microsoft is ready to move on.

And then there’s Sony. The idea that Sony would announce PS4 at E3 this year is even more of a stretch. PS3 released a year after Xbox 360 in late 2006. It’s been on the Japanese market for five years. It’s not even five years old in Europe. PlayStation 3 was an enormous investment for Sony, and the inclusion of Blu-ray was instrumental in costing the company billions in losses. Sony pulled its “game” division into “networked products and services” to mask the true extent of PS3′s cost at the start of fiscal 2010, but whatever the truth about the figures at this point, the notion of PlayStation 4 being announced this year seems odd, to put it politely. There’s risk and there’s risk.

Remember this: nine times out of ten, the announcement you’re expecting isn’t going to happen. Unless there’s a great deal of noise, leaks on the major blogs, claims of hardware specs and case designs, unequivocal headlines claiming that such-and-such a console is going to be announced at such-and-such a show, the truth is that the rumour you’re so desperate to believe may simply amount to nothing.

More likely is that Microsoft would be readying to release at the end of 2013, which means we could to see a public launch at E3 next year. I’m basing this on logic. No one has told me whether or not Microsoft is going to announce anything, anywhere, at any time. I had conversations with developers last summer in which it was made clear that work was underway on third-party software tech and games for the next Microsoft box. This really was the first I’d heard of it, even off the record. Going on experience, that says to me we were about two years out at that point. Which points me at Christmas next year.

Remember this: nine times out of ten, the announcement you’re expecting isn’t going to happen. Unless there’s a great deal of noise, leaks on the major blogs, claims of hardware specs and case designs, unequivocal headlines claiming that such-and-such a console is going to be announced at such-and-such a show, the truth is that the rumour you’re so desperate to believe may simply amount to nothing. Cast your mind back to the announcements of Vita, PSPgo and PS3 Slim: the internet was covered with them for months before they were shown. This stuff leaks when it gets into the hands of third-parties. This is why Nintendo was forced to officially announce the Wii U reveal some three months before it happened at E3 last year: top brass knew it was going to leak and they had to stop it. We published the first images of “PSP 2″ in November 2010, three months before its reveal at a press conference in Japan, eight months before proper details at E3, over a year before it released in Japan, and 15 months before its western release. We were getting proper tech details as early as May 2010, eight months before Sony even showed the machine.

That’s almost two full years before western launch.

And before you start, I’m not saying “we’ve heard nothing so it isn’t true”. We’re not the font of all secret gaming knowledge, and, obviously, we get stuff wrong. I’m saying the new machines are almost certainly far too early for this type of coverage to begin in earnest. That said, Sony and Microsoft probably will talk about them in seriousness to the “lesser” third-parties behind closed doors this year. If that happens, you’ll hear about it soon enough. And the boxes may yet be “shown” at E3 2012, as MCV said this week. Maybe the story’s right. There’s no science to any of this. Sometimes you can apply all the logic you like to the games business and end up truly surprised. That’s one of the amazing things about it.

But I am saying I believe it’s highly unlikely you’ll be seeing Microsoft make a full reveal of its next-gen console at E3 this year. You may want to temper your excitement for a little while yet.

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