Thoughts on the PS4, Xbox One and Wii U

So now the eighth console generation is complete. Here are some thoughts on yesterday’s Microsoft presentation, as well as the PlayStation4 reveal some time ago and the three-way-race in general. But let us start with the Xbox One.

What’s in a name? Money, success, reputation…

Firstly, the name is a big mistake. Quite obviously, Microsoft named the predecessor Xbox360 rather than Xbox2 so people would not think it inferior to a PlayStation3. Now, they are pitting an Xbox One against a PlayStation4. I realise they want to hint at the desired unifying function of the device – as the one device you need – and hope that similarly to ´the 360´, people will call it ´the One´, but some will have associations of inferiority compared to the PS4. What is more, the original Xbox is sometimes referred to as the Xbox 1.

However, Microsoft is in good company. A lot of consoles are badly named these days. The ill-fated multimedia version of the PlayStation2 was called PSX, even though that name had been associated with the console’s predecessor. More recently, both 3DS and Wii U also suggest that these consoles are mere variants of their predecessors rather than a new console generation and I am convinced that the names alone account for a great deal of lagging sales. In the next generation, the only aptly named console is the PlayStation4, which sends out a clear message about what to expect. But do not get me started about the Vita. If anything, Vita sounds like a diet supplement for pensioners. So even Sony can mess up console names big time.

Who were those people?

What irritated me was the selection of speakers. Who is Yusuf Mehdi? He has been part of the Xbox division for less than two years. Phil Spencer and Marc Whitten are not exactly executive celebrities, either. Almost all of the people on stage were unknown to me, with the exception of Don Mattrick. Why is that? Since launching Xbox360, Peter Moore, Shane Kim, Peter Molyneux, J. Allard and Robbie Bach all left Microsoft. This painful and significant managerial exodus was very evident yesterday and I am skeptical whether the new people in charge have the vision and experience people like Moore, Allard and Bach had. They certainly lack their charisma.

As much as I think that both Sony’s PS4 presentation and Nintendo’s various video conferences left a lot to be desired, it is always reassuring to have familiar and experienced executives like Andrew House and Kaz Hirai or Reggie Fils-Aime and Satoru Iwata up on stage. Microsoft has to ask itself what signal it is sending to current Xbox fans when they introduce former CBS president Nancy Tellem as their newest executive. She is almost 60 years old and, probably, has not been an avid gamer. That is not being presumptuous considering her generation.

Games, please. That will do for me, thank you.

What even are the Microsoft Entertainment Studios Tellem is heading? What would we as gamers want them to produce? I appreciate Microsoft closing deals with established producers of television and movie content. But I do not want them to produce such content themselves. Let us consider the short ´Quantum Break´ trailer. The live action sequences were poorly written and acted. If this is the best Microsoft (or Remedy) can do, they should stop right now and get back to making videogames.

The ´Halo´ spin-off series will not be any better, I presume. Spielberg will most likely only be executive producer of the project. And remember that Peter Jackson already tried to turn ´Halo´ into an exciting new interactive genre somewhere between game and movie. He failed miserably and I am unsure whether Spielberg (or rather the person who actually gets to direct this) will do a better job. Remember Spielberg’s first and failed effort to break into the gaming industry with ´Project LMNO´? There is still a possibility of this new attempt going down the tubes as well (pun intended).

And where were the games? They really only showed the new ´Forza Motorsports´, ´Quantum Break´, ´Call of Duty: Ghosts´ and a sleuth of EA Sports titles which were not presented one by one but as part of a montage. Instead, there was a strong emphasis on television content and other media, as well as on switching between them fairly seamlessly.

Kinect stays rubbish

When I say fairly seamlessly, I am talking about a slight and noticeable delay, though. Watching Yusuf Mehdi change from game to television to browser and back by short voice commands really made me wonder who would be applauding such a feature frenetically (some people did but they were miraculously not in view of the camera’s wide shot). Anyone who called the Wii’s motion controls gimmicky can knock themselves out with voice commands and gestures replacing pushing a button on some kind of controller you would have to be holding or have lying next to you anyway.

Microsoft tried forcing the original Kinect down people’s throats already and it turned out to be a dud. While the company gladly communicated impressive shipment figures for the hardware, they never released any figures for Kinect software sales which would have shown a tie ratio between the two. This, I am sure, would prove that a large number of people bought the hardware for uses other than gaming and, in fact, other than connecting it to an Xbox. Just about every research scientist and hacker in the West must have bought what still is amazing hardware at a reasonable price. But name some great Kinect games and you will be hard pressed to find even a single one. Back in my old newsroom, we came across so many fantastic homebrew Kinect applications on PC and always wondered when Microsoft would turn these ideas into Xbox software. It never happened. There are some okay kids games amidst the rubbish mini-game and invariable sport compilations. But I have yet to see Kinect software on par with solid PlayStation2 titles like the ´EyeToy´ series or ´SpyToy´. Not that they were landmark videogames. You understand my point.

Having realised this, Microsoft is now marketing Kinect as a user interface only. There was no mention of Kinect being used for games, I recall. Again, Microsoft is emphasising non-game features and greatly downgrading the hardware capabilities of the Xbox One in favour of including Kinect in every SKU. Speaking of hardware power, all the developers that had started developing games in the new 4k resolution can shelf those assets until the next generation, should any of the current hardware manufacturers make it to another generation. It is almost certain that one of the three will drop out of the race this generation and I would put all my money on that happening. But more about that later.

While Mehdi alluded to 4k gaming as a possibility on Xbox One, I am highly skeptical about this assertion. So is the author of the Forbes article who summarises: "In theory, the Xbox One could support 2K or perhaps even 4K gaming – if there’s content for it at those resolutions."

Microsoft’s focus: North America?

It was also clear that Microsoft was speaking to the US market only. An NFL partnership is an impressive feat and shows that Microsoft has the biggest muscle to close such deals on its home turf, but they excite next to no one in Europe or Japan. My worry is that, with the Xbox One, Microsoft will simply abandon the Japanese market altogether and see Europe only as a secondary battlefield. Alluding to their leadership position multiple times, Microsoft made it clear that the focus of yersterday’s presentation was North America alone. Because in terms of worldwide sales, Microsoft is a far cry from leadership.

So will the PlayStation win?

Well, at the PlayStation4 briefing we got to see some games, at least. The demos shown were impressive and an improvement over the PS3 standard. But the leap in visual fidelity will still be the most subtle ever. Ordinary buyers may not even see the difference between this console generation and the next. Also, bear in mind that a title like ´Killzone: Shadow Fall´ may not look quite as good as the demo shown. We have been there before.

It is also clear to me that Sony rushed the event. They appeared nowhere near releasing hardware. They did not show the console most likely because there is no console to show, I guess. The retail hardware must not have been final yet. A number of developers like Square Enix and Quantic Dream showed only demos. Was this a console that will launch this year? Hardly. Also, noticably, Electronic Arts was absent from the event. This was especially strange in the wake of reports that EA was planning to support the new Xbox and PlayStation rather than the WiiU. These reports have since been confirmed. In the light of this, EA being a no-show is even weirder.

Perhaps most importantly of all, no good use has been shown for the touchpad on the new DualShock, the only real innovation of the PS4 (discounting the Share button). If I did not miss anything, they only announced the feature without showing any uses for it. That, of course, is weak. I have been to a semi-secret event abroad where I had the opportunity to go hands-on with the PS4 dev kit. And while its controller is of course work-in-progress, it felt rather cheap. The new touchpad seems less a touchpad and more a large button. Moreover, the button appears to be digital and not analogue and is not very comfortable to reach.

Then there is the fact that PS3 controllers will be incompatible with the PS4, there will be no backwards compatibility other than, perhaps, streaming solutions in the future and even PSN purchases may not be transferable to the new console.

Predictions

This is going to potentially kill both PlayStation4 and Xbox One: the issue of backwards compatibility and their restriction of used games. I appreciate Microsoft shying away from an always-on connection. But curtailing used game sales by requiring an activation code is almost just as bad. Why invest in the hardware if you know that your increasing software portfolio will be tied to that specific console? Anyone who spends time on videogame forums knows that gamers plan their purchases like this: buy a new console or game, play it for some time and then sell it on. If you want to own more than one console, there is no other way for people with average incomes. Disrupting that cycle is foolish and might turn out to be economic suicide. The same goes for backwards compatibility of software and periphery. I myself have an impressive collection of 360 titles and accessories. If I cannot use any of that anyway, I might as well buy a Wii U or PS4 instead.

Likewise, this is Nintendo’s biggest hope. Around a hundred million Wii consoles have been sold to date with far more accessories and games alongside them. Compatibility is a great incentive for these owners to update, while PS3 and Xbox360 will have to start with a clean slate, anyway, so they can change to another manufacturer without any disadvantage. You can tell Nintendo is betting on this effect by them not including a sensor bar and Wii remotes in some bundles.

I predict that the Wii U will continue its slump for most of 2013. But Xbox One and PlayStation4 will both not meet their promised launch windows later this year and will be delayed until spring 2014. This will allow Nintendo to widen their lead to about 10 million Wii U consoles sold by the time the two competitors make it to market. And these too will meet a lukewarm reception, particularly because at a fairly small increase in visual fidelity over their respective predecessors, they will carry a price tag nearer to the $500 mark. The two consoles will certainly not be able to overtake even the abysmal Wii U figures to date. In fact, I don’t see any of the three consoles making it anywhere close to selling a hundred million units in lifetime sales.

Ironically, the company best suited to deal with the huge obstacles facing the next generation of consoles is Nintendo. Even if Electronic Arts and other publishers withdraw their support, they can always fall back upon their strong first-party licenses. They own the two top-selling franchises in the world and with the inclusion of near-field communication in the GamePad, they will surely land a hit as big as Skylanders once their new Pokémon game comes out. In fact, Nintendo was heavily involved in the development of ´Skylanders´ and they will reap the benefits of supporting Activision soon enough. Likewise, they are enjoying healthy support from Ubisoft after agreeing to let ´Rayman Legends´ go multi-platform, as did the original ´Skylanders´.

Also, even market analysts are greatly underestimating how much money Nintendo earned in the first few years of the Wii on the market. The console was never subsidised and remained at its launch price for around three years, which must be a first in the industry and made Nintendo billions. Factor in that the 3DS has finally picked up sales-wise and stands at more than 30 million units sold worldwide and you realise that, ironically enough, Nintendo is probably still the most financially able of the three console manufacturers. Sony and Microsoft are both expected to not be able to subsidise their new consoles at all.

The long-term future appears bleak for all three of them, though. By 2016, either Sony or Microsoft will withdraw from console hardware for lack of money. And regarding the remaining two, I see the industry returning to the economic rationale that governed hardware like the Atari 2600. You sell the hardware at a decent profit, but scrap license fees for developers. This, if anything, will be a lesson traditional hardware manufacturers may learn from Ouya, GameStick, Project Shield and other such consoles – which are doomed for other reasons. This will be the topic of my next post, though.