Speaking in an industry note, Sebastian said with Microsoft offering a system with significant upgrades in “hardware, software, and content features,” in a living room centerpiece, he feels it will likely appeal to a broad market despite some of the initial confusion surrounding used game sales and trades.
“While Sony emphasized core games with the PS4 unveiling, Microsoft is positioning the Xbox One as the ‘all in one’ living room entertainment centerpiece,” said the Robert W. Baird & Co analyst. “We view the broad capabilities of the Xbox One as likely to appeal to a broad market, although price remains an important unknown.
“In our view, Microsoft views the battle for the living room involving not just video game supremacy, but also countering the inevitable rise of iOS and Android platforms. Overall, we believe the Xbox One reveal demonstrates that Microsoft has a capable platform in the living room battle, even if there is a narrow window of opportunity to build share before other platforms gain a foothold.
“While encouraged by next gen platforms, we remain somewhat cautious on the sector ahead of additional price and content specs, although a successful launch of Xbox One would be positive for Activision, EA, Take-Two and GameStop.”
Sebastian call the hardware “impressive” and similar to PS4 with both systems featuring 8-core x86 CPUs, 8 GB of RAM and Blu-Ray. The difference between the two will be the respective online services, multi-media content and exclusive games.
He also weighed in on some of the confusion surrounding used game trades and the online requirements with Xbox One.
“Microsoft indicated that the new Xbox will not require always on connectivity to the Internet, as was rumored in, nor will the Xbox be backwards compatible,” he continued. “Despite initial press reports to the contrary, Microsoft indicated the Xbox One will support used game trades and resales, as we had expected.
“Given a mix of confusing articles and comments attributed by Xbox management on the issue, we expect formal clarification by Microsoft in the coming weeks.”
While pricing “will be key” to the console’s success, Sebastian believes Microsoft “intends to subsidize the Xbox One, potentially in cooperation with media companies such as Comcast.”
Xbox One is slated for release sometime this year, likely around the same time as PS4. You can get caught up on all the news from yesterday through our round up post.