Is Microsoft committing to too much with Xbox One?

By Naren Hooson, Wednesday, 22 May 2013 02:00 GMT

With Microsoft’s Xbox One now unveiled, many are thinking they have taken on more than they can handle and are heading in a direction that could estrange the gamers. Several leading games analysts are now commenting, with varied opinions.

Starting with DFC Intelligence’s David Cole, he delves into Microsoft’s option to move further into entertainment at risk to alienating gamers, courtesy of Games Industry. “The concern with Microsoft is that they are going after a need that isn’t really there. Yes, it is convenient to have your game system play video but there are all kinds of devices that do that. If a consumer is putting that kind of money down they want the system that plays the best games.”

“With no backward compatibility the Xbox One is starting from scratch. Microsoft had a huge success with the Kinect and that could be their downfall. The Xbox brand resonated primarily with a core gaming group but they shouldn’t assume that means they will automatically stay around. Sony learned that lesson the hard way in the transition from the PlayStation 2 to the PlayStation 3.”

“In the US Microsoft has a major advantage but they could easily screw that up very quickly. We only need to look at Nintendo’s disastrous recent product launches for a lesson. This will be a marketing game and right now Sony seems to be winning,” Cole warned. “Pricing is likely to be a key issue and that has not been addressed at all. Hardware price, Xbox Live as a mandatory subscription, bundles with entertainment providers and other cost issues will be the real key. We expect a lot of great exclusive content from both Sony and Microsoft but how they package and market it will be what matters at the end of the day. It is still too early to make any major calls.”

On the other hand Wedbush Securities’ Michael Pachter remains optimistic and likes what Microsoft are offering. “I’m actually pretty happy with what I saw. I don’t think this is going to be a poor seller; I think the odds of this thing selling poorly are pretty low unless it’s a thousand bucks.” His prediction is that Xbox One will retail for around $400 and that subsidizing of the hardware from cable providers is likely to happen.

In contrast to Cole, Pachter sees the move into the wider realm of entertainment, and perhaps away from core gaming, as a positive. “It’s very much an entertainment focused box. They only gave us a glimpse of games. 15 exclusives and 8 new IPs, that’s pretty cool… But they kind of did exactly upside-down what Sony did. Sony was all games all the time and this was all entertainment, saying games would be at E3. The gaming press was really excited by the games focus by Sony, but I think this has more mass appeal and I think E3 is a games focused show so I think maybe that strategy is smarter.”

Pachter’s view does appear to be one of “bigger is better”, expressing little concern for the lack of indie focus, something that Sony has put a lot of emphasis on with PS4. “It’s great for the development community but really not that many people buy them, so I don’t know… I think Sony wants to win on game content and maybe they will but we don’t really know what Microsoft has got yet,” he commented.

EEDAR’s Jesse Divnich on the other hand believes the console will be the best of both worlds, delivering the next step in entertainment while staying loyal to the core gamers. “The Xbox One is an evolutionary step in the entertainment consumption experience. Microsoft has been battling for control of the living room since the launch of the original Xbox in 2001 and has since proven they’ve seen eye-to-eye with how their audience consumes entertainment content. The Xbox One stands to provide the total living room experience for the entire family, while at the same time not alienating the core gaming consumer or the core gaming experience. It’s an impressive leap forward and one that will resonate well with the North American audience.”

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