Published on May 21st, 2013 23:27
We talk to analysts about the new Xbox unveiling; David Cole fears Microsoft is "screwing up" its advantage but Pachter likes what he sees
Microsoft has finally lifted the curtain on its next-gen console, the Xbox One. The unveiling seems to be getting mixed reactions so far, and that appears to be true of analysts as well. GamesIndustry Internationalcaught up with several leading games analysts immediately following the conclusion of the live-streamed event. With Sony first to announce its next-gen system back in February, and Nintendo continuing to struggle with Wii U sales, how would Microsoft position the new Xbox? From the looks of it, Microsoft is approaching the console market very differently than Sony and that may endanger its hardcore support.
"Just the name Xbox One says a lot. Microsoft desperately wants to have their system be the centerpiece of living room entertainment. Sony also wants that but they seem to be going in a much more game centric direction. In terms of which strategy will win we would put our bets on targeting gamers," said DFC Intelligence's David Cole. "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."
"Overall there has to be some concern that Microsoft is biting off more than they can chew," Cole continued. "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...This will be a marketing game and right now Sony seems to be winning"
Monthly data from The NPD Group shows that Microsoft's Xbox brand has been a huge success in North America, as the Xbox 360 has been outselling competing consoles every month. If Microsoft isn't careful, however, it could lose this momentum that it's worked so hard to build up.
"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."
Wedbush Securities' Michael Pachter and EEDAR's Jesse Divnich were much more optimistic about what they saw from Microsoft today.
"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," Pachter said, adding that he envisions Xbox One retailing for about $400. He noted, however, subsidizing the hardware with cable providers is a likely scenario still, given the TV focus of the system.
While Cole believes that the lack of a core gaming focus could hurt Microsoft, Pachter sees it as a smart move to gain a larger market.
"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 noted.
"The gaming press was really excited by the games focus by Sony, but I think this has more mass appeal...I think the mainstream press will be excited by this"
"I think the mainstream press will be excited by this. It is a nice interface. That's the thing I've been talking about for a while - if it gets rid of your cable box, then it's interesting. If the only thing you have in your living room is an Xbox, that's pretty powerful. Technologically it's doable right now," he added.
While Sony talked up how the PS4 will be the most open console ever, paraded Jonathan Blow out on stage at its unveiling and has been courting indies ever since, Microsoft didn't mention independent developers even once. The company's standing among indies in recent years has already taken a hit, and this probably didn't help any. Pachter, however, isn't concerned by the lack