Tuesday, September 08, 2020

The Next Generation: Microsoft and the Unwanted Consequences of Platform Splitting

After a level of secrecy better suited for nuclear launch codes, hard information about next generation consoles has finally emerged. 

Here you go: Microsoft confirms $299 Xbox Series S console.

This is a console with no disc drive, and is targted at sub-4K gaming. And it sounds like a fantastic deal for people without a 4K tv.

Unfortunately, if you do have a 4K tv, there's a potential downside here, one that could prove to be huge. 

The best available information is that Xbox Series X, which is the 4K monster, is releasing at $499. That's not terrible for the remarkable horsepower in the Series X. 

Here's the problem: SKU distribution. 

If the Series X outsells the S, it's all good. Developers will target 4K, and the S will likely run everything at a lower resolution without issue. No problem.

If the S significantly outsells the X, though, it could be a problem. A big one. 

Let's say 75% of sales worldwide are the S. Given the price difference and the number of consumers with non-4K tv's, that doesn't seem unreasonable. In this scenario, what's the incentive to provide a smooth experience on the X? If the X version has chunky framerates or doesn't look great at 4K, who cares? 

It's risky when the premium version becomes the less important one.

This makes total sense, from Microsoft's perspective. They are all-in on the games as service model, so a model with no disk drive makes the consumer 100% dependent on Microsoft's ecosystem. Profits will be higher for them, and loyalty probably grows, too, depending on the robustness of Game Pass. That's why they can sell it so cheaply.

Really, the S is a Trojan Horse with "HERE IT COMES" splashed on its flank.

I'm still hoping the Series X is an unbelievable experience. There's no question, though, that this is concerning. 

Also, a prediction: Madden will still suck.

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