If you’re a serious gaming household, chances are you own either a PlayStation or Xbox. Since the Xbox’s debut in November 2001, the two consoles have matched sales and traded headlines and hype with each new generation. But the latest battle between the Xbox and PlayStation has been so bad that the very future of the Xbox may now be in question. Microsoft’s latest version of the Xbox platform, the Xbox One, has been largely considered, by both financial analysts and journalists, as one of the biggest failures in the history of gaming.
Let’s put opinions and hyperbole aside and let the data do the talking. A quick look at the sales numbers tells a very clear story. Since the Xbox’s debut in 2001, PlayStation and Xbox sales have been a dead heat. Equal rivals in every way… until now. Sony‘s latest console, the PlayStation 4, has outsold Microsoft‘s Xbox One, two-to-one. The PlayStation 4 has been such a huge hit with gamers, it’s not only convincing PlayStation owners to upgrade to the new console, but millions of Nintendo Wii and Xbox owners are making the switch to PlayStation.
What happened with the Xbox One? How did Microsoft make such a colossal error and put the future of the Xbox in jeopardy? Here are 5 reasons…
01) Disappointing Graphics
Since the 1987 release of NEC‘s TurboGrafx-16 gaming console, every single release of a gaming console has always been about the graphics and the games. Marketing for gaming consoles always hypes the graphics capabilities (16-bit, 32-bit, 64-bit, 2D, 3D, and HD) and the game library. Sony gave gamers exactly what they wanted with the PlayStation 4. Natively programmed PS4 games can be played in full 1080p HD resolution. But Microsoft’s decision to focus a major portion of the Xbox One’s processing power on Kinect forces most Xbox One games to scale down to 720p. Long story short, the PlayStation 4 has better graphics than Xbox One and gamers want better graphics.
02) Media Center Focus
Is the Xbox One a gaming console or an entertainment media center? At the Xbox One’s unveiling at the 2013 Electronic Entertainment Expo, all of Microsoft’s talking points were focused on music, movies, and Skype. Microsoft’s message was loud and was clear, gaming wasn’t a priority for the Xbox One.
Then came the ad campaign and marketing for Xbox One. How many times is “gaming” highlighted in this Xbox One commercial on YouTube below?
When launching the Xbox One, Microsoft went out of their way to snub gamers. Gamers weren’t a part of their messaging or marketing for the Xbox One at all. So should it come as a surprise that gamers didn’t embrace the Xbox One?
Microsoft has since shifted tactics and is now trying to connect with gamers. If you watched any of the 2014 World Cup games then you might have seen an Xbox One ad featuring the character Jesse Pinkman from the hit American TV show Breaking Bad. But this might be too little too late.
Gaming isn’t always about the console. Sometimes the controllers and accessories are just as important. The joystick (Magnavox Odyssey, 1967), steering wheel (Gran Trak 10, 1974), laser gun (Shooting Gallery, 1968; NES Zapper, 1984), trackball (Centipede, 1981), and DualShock Analog Joystick (PlayStation One, 1997) are just some of the items that have revolutionized the gaming experience.
Microsoft’s Kinect, is a motion and audio sensing input device for Xbox and Windows. It was first introduced in November 2010 in an attempt to broaden Xbox 360’s audience beyond its typical gamer base.
The concept behind Kinect is fantastic. Voice and gesture control is definitely the wave of the future. Gaming gestures made the Nintendo Wii a huge hit and every smartphone now has voice control like the iPhone’s Siri. However, how Kinect was integrated into the Xbox is where Microsoft failed. According to Alex Kipman, the Microsoft employee who incubated the project, Kinect was originally planned to have its own microprocessor capable of performing complex operations, like skeletal mapping. But the dedicated processor was removed before Kinect’s release in 2010. So how does Kinect function without a dedicated processor? It can’t. Kinect has to steal processing power from the processors in the Xbox. According to Alex Kipman, the Kinect system consumes about 10-15% of Xbox 360’s computing resources.
Microsoft has worked hard to reduce that processor consumption down to single-digits, but the computational load required for Kinect makes the addition of Kinect functionality to pre-existing games through software updates unlikely. Additionally, game developers have to reduce the number of processor resources in their games to make bandwidth for the Kinect. The end result is games with lesser graphics. Most games will look better on the PlayStation 4 than on the Xbox One.
04) Xbox One Was Too Expensive
So after knowing how important graphics are for gamers, do you think gamers would spend more money on a system with inferior graphics? Microsoft priced the Xbox One $100 more than the PlayStation 4. Why was the Xbox One more expensive than the PlayStation 4 when the two consoles traditionally matched each other on price? The Xbox Kinect sensor was bundled with the Xbox One. The extra hardware meant extra money for the system.
But don’t forget item #1 on this list. The Kinect is the reason why Xbox One games have inferior graphics. The extra processing power required to run Kinet is why the Xbox One only has 720p resolution games compared to PlayStation 4’s 1080p. So did gamers want to spend an extra $100 to pay for the reason that their graphics were inferior to the PlayStation 4 in the first place? No. So Microsoft introduced a $399 Xbox One without Kinect. As a result, Xbox One’s June 2014 sales doubled.
05) Xbox Live
One of the biggest advantages of being a PlayStation user, was their online service, PlayStation Online, was free. You could use your PlayStation to do things like watch Netflix, listen to streaming music and play games against gamers around the world. If you wanted more, you could pay for a monthly service called PlayStation Plus, that gave you free monthly game downloads and even automatically updated your console with new software updates.
Unfortunately, with the PlayStation 4, there’s now a charge to play online multiplayer games. But all other online services are still free. When the Xbox One was released, most of its Internet functionality was locked behind Microsoft’s premium online service, called Xbox Live Gold. If you wanted to get online, watch movies using Netflix or Hulu, or check your social media accounts, then you needed a $60 yearly subscription to Xbox Live Gold.
After getting slammed online by gamers and angry customers, Microsoft changed their policies and let all Xbox Live users get online whether they had subscribed to the Gold service or not. But at that point, many gamers had already made the switch to PlayStation.
Can the Xbox Be Saved?
Microsoft is working hard to correct their massive mistakes, but the Xbox One will definitely go down in history as one of the biggest failures of the gaming industry. The Xbox One is now competitively priced and Microsoft has fixed the pricing on both the console and Xbox Live Gold. Microsoft is also attempting to make gamers feel like a priority again. At E3, Microsoft focused their entire presentation on gamers and promoted upcoming games for the console. But these efforts combined with a low-budget commercial featuring Jesse Pinkman probably won’t overcome their inferior graphics problems. Sadly, everything Microsoft does now to help rescue the Xbox One may be too little too late.
I’m not sure what the future will hold for the Xbox, but Microsoft has deep pockets. Not many companies are big enough to absorb such a major misstep. And does Microsoft even care if the Xbox is financially successful? Even though the Xbox is a popular global brand, it’s not an important profit center for Microsoft. That becomes pretty clear when you look through the company’s annual financials sent to all Microsoft stockholders.
There are even multiple credible news sources, including Mark Rogowsky at Forbes, reporting that the Xbox gaming division has lost 3+ billion dollars over the last 10 years. If you think 3 billion sounds big, just think about everything else that goes into backing a global gaming console. In addition to lost revenue, Microsoft has spent countless billions of time, energy, infrastructure, support and marketing on the Xbox. At this point, the Xbox might be too big to fail.
Who knows what the future will hold for the Xbox, but if the Xbox does survive, you can bet their next console will come back strong against the PlayStation. Microsoft will just have to dig a little deeper into their pockets. And they might want to fire their entire development, marketing, and strategy teams.