Business Approach Comparison Sony PS4 and Microsoft Xbox

[AzBat]

That makes a lot of sense to me as I've described in the Xbox thread. A gameless Kinect CE device at a much lower price can reach a far wider market. Although that, of course, is not going to be an Xbox console.

If it costs half the price and appeals to a larger segment, it'll outsell the console. That's a pretty natural conclusion. They only way that couldn't be true is if interest in the entertainment features was very low and the reason to buy XB1 was the gaming aspect as well or exclusively. If the entertainment features have significant value, they'll be wanted by a large segment of the populace at a lower price which is what a standalone box will provide. That'd explain why reaching TV audiences is important for launch. Show Joe Consumer this fabulous next-gen CE interface. Have them wanting it but not willing to spend $500 on it. Sell $500 consoles to Joe Gamer. Release a CE device and suddenly Joe Consumer can have $500 worth of CE entertainment device for $200. That pent up desire you've established will be coupled with an apparent bargain and help explode demand.

I agree with this, but then the problem is Microsoft need some away to convince those same users to want to upgrade to the Xbox One later on at the higher price. If the only thing that differentiates the two is solely the gaming is it worth the extra $300? With PS4 at $400 I'm not so sure.

The other question is: does it include the new Kinect for Xbox One or does it include the Kinect for Xbox 360? If the former, then I might see it cost $200, but if the latter then it really needs to be at $100. There were multiple rumors too. One suggesting a redesigned Xbox 360 called Xbox Mini & the other Xbox TV, both at $100 I thought. So what's coming? Maybe the redesigned Xbox 360 E we got was getting confused with the game-less Xbox TV? Either way it might not be able to play Xbox 360 or Xbox One games, but it needs to be called "Xbox"-something, especially if it includes Kinect. It would be terribly confusing the customer to have to talk to the device as "Kinect" "do something" instead of "Xbox" "do something". They unified all their consumer media under the "Xbox" brand for a reason, so why change now?

BTW, we still haven't heard what's up with Halo TV series. Maybe they are timing that with the new device? And I believe Shannon Loftis is now in charge of that(see this video). She's now the General Manager of Xbox Entertainment Studios. She was the studio head of Good Science Studio responsible for Kinect Adventures & Kinect Fun Labs.

Tommy McClain

 

[Shifty Geezer]

Well, I've been suggesting MS should have gone with a split approach from the beginning. Perhaps alongside XBox Entertainment and XBox One, they'll launch XBox Phun. You can buy XBox Entertainment for $200 for your CE experience, and then attach a Phun whenever for $300 (rapid price drop too, probably). The two could have synchronicity above and beyond just running any old console through the HDMI, so the end result would be the XB1 experience provided piecemeal.

Or they just won't bother, and families that want to upgrade will just sell their XBE or give it to someone else.

 

[Michellstar]

A 2 core Mullins apu and 4GB of ram would fit nicely for this XBTV, and should run the Xbox system partition without trouble.

Really low power (sub 10w) and a tiny core hence cheap.

I envision this device to run W8 metro apps, W8 metro games (shared with W8Phone), and at first in the local network to play its big sister games the XO

And if Ms puts the infrastructure in place, it´ll run in the future XO games throught the net, ala gaikkai

 

[Arwin]

Basically what part is reserved for the App/OS layer/section of the Xbox One is a good indication of what they could get away with in terms of hardware perhaps?

 

[Michellstar]

Basically what part is reserved for the App/OS layer/section of the Xbox One is a good indication of what they could get away with in terms of hardware perhaps?

I guess

2 cores, 3 gb of ram, and 10% of the gpu (more or less 2 cus)

 

[Shifty Geezer]

Basically what part is reserved for the App/OS layer/section of the Xbox One is a good indication of what they could get away with in terms of hardware perhaps?

Absolutely. Which is where I felt the system complete overkill for just a media device and why MS would do well to separate the two. Michellstar's comments are Win8 apps and games are right on the money IMO. I can imagine a debate at XBHQ talking about running two products or one, and the management decided one at first as it was more conventional and they doubted the value of a discrete CE box.

 

[Zaphod]

If it costs half the price and appeals to a larger segment, it'll outsell the console. That's a pretty natural conclusion. They only way that couldn't be true is if interest in the entertainment features was very low and the reason to buy XB1 was the gaming aspect as well or exclusively.

That's where I disagree. The appeal of the gaming Xbox One may make or break on the media features compared to other gaming systems. Or it may appeal to those seeing gaming as a secondary feature to media but still desires it.

Take away the gaming, and what's to say a game-less Xbox wouldn't be another also-ran in the vast sea of media centric devices?

I.e., I might desire a gaming Xbox with media features over, say, an Apple TV; but I might also prefer the latter if the games are off the table.

I'm not saying game-less Xbox won't outsell the gaming one, I just don't see why that would be a given.

 

[SlimJim]

Having used a Microsoft surface RT1 extensively, I can say that a Tegra3 with a GB or 2 of some low-power RAM would probably be sufficient to run all lot of XB1 tasks (outside of gaming), I mean, it runs Windows8, really well I must add.

MS could produce an ultra low power Media Box that has all the XB1 multimedia capabilities, aside from BD-viewing and Kinect, for the price of a Vita TV probably.
Maybe that can be their TV trojan horse? And have it display gaming ads for the XB1. "upgrade now for 15 dollars a month and get free xbox live, and instant game collection + !!" I see it happening

 

[dobwal]

Well, I've been suggesting MS should have gone with a split approach from the beginning. Perhaps alongside XBox Entertainment and XBox One, they'll launch XBox Phun. You can buy XBox Entertainment for $200 for your CE experience, and then attach a Phun whenever for $300 (rapid price drop too, probably). The two could have synchronicity above and beyond just running any old console through the HDMI, so the end result would be the XB1 experience provided piecemeal.

Or they just won't bother, and families that want to upgrade will just sell their XBE or give it to someone else.

I doubt splitting functionality between two different products would of worked for MS.

First Apple/Roku probably the two biggest players in the small media box market aren't really burning up the sales chart.

Apple TV is just a few months younger than the PS3 and as of the end of May the LTD was 13 million with almost half selling in the 12 previous months. There is nothing thats says that MS can enter the market and garner the level of sales at a pace that rivals those two players. And MS is suppose attempt that endeavor with a product that cost twice as much as any other media box?

The Xbox One has the potential to match those numbers in less than 24 months, which represents a pace that would be way more attractive to media app developers. Nevermind that the ideal of supporting a device who predecessor has a userbase 80 million is probably a lot more enticing than a device with no proven history. The Xbox One has a much greater potential to drive increasing media functionality than the XboxTV. An XTV that is a hardware derivative of the Xbox One (with media functionality) has a much greater chance of success. At least you would have an overlapping market place between the two devices.

In my opinion the biggest problem is the lack of synergy that exists between MS products. Everything runs Window derivatives while existing in their own little markets with limited capacity to broaden the functionality of each other when existing in the same home. Producing a media box in such a fashion as you espouse does nothing but exacerbate MS's issue.

 

[Shifty Geezer]

Apple TV is just a few months younger than the PS3 and as of the end of May the LTD was 13 million with almost half selling in the 12 previous months. There is nothing thats says that MS can enter the market and garner the level of sales at a pace that rivals those two players.

Why the comparisons to Apple TV? That's a media streamer, doing nothing that people aren't doing on other devices generally. It doesn't integrate with your TV, doesn't provide a guide, doesn't provide video chat overlays, doesn't search for content by name, nor change channels by name. XB1's TV aspect is unique and fairly compelling for a significant part of the population IMO. Not $500 compelling, but certainly "would like to have" compelling.

The Xbox One has the potential to match those numbers in less than 24 months, which represents a pace that would be way more attractive to media app developers.

If the TV aspect isn't any different to other devices that aren't popular, then one can only assume these features aren't of any great interest to the XB1 audience. At which point they're being asked to pay $500 for a console that's providing lower quality games than the $100 rival. If XB1 is worth the asking price to anyone, it'll be chiefly because the extended media functionality is worth something as that's a significant USP. So I don't see how the media functionality can be considered worthless and unable to compete as a standalone product with other simple boxes when it's offering something unique (auto login, voice control, TV integration, video phone like the movies) and yet that functionality is something chief to XB1 being able to shift many millions of consoles at its present $500 pricetag.

 

[Cyan]

A 2 core Mullins apu and 4GB of ram would fit nicely for this XBTV, and should run the Xbox system partition without trouble.

Really low power (sub 10w) and a tiny core hence cheap.

I envision this device to run W8 metro apps, W8 metro games (shared with W8Phone), and at first in the local network to play its big sister games the XO

And if Ms puts the infrastructure in place, it´ll run in the future XO games throught the net, ala gaikkai

It kinda start to make sense this TV calibration, IR blasters and so on.

The dilemma is how to bring the best of both worlds for gamers, dedicating the entire console to their gaming needs when developers ask for it, and a TV centred device.

 

[wco81]

Would this TV-only product require XBL Gold to use, as the X1 does, for the TV features?

So $200 plus a $60 a year service fee?

Yeah that'll fly ...

 

[AzBat]

Would this TV-only product require XBL Gold to use, as the X1 does, for the TV features?

So $200 plus a $60 a year service fee?

Yeah that'll fly ...

Agreed. I'm sure they will require a subscription, but they will make it stomach-able by either providing their own content(Halo TV etc) or subsidizing the hardware like they did before with a $15/mo for 2 years.

Tommy McClain

 

[Phil]

So I've read a few reviews on the Xbox One, one of them being, which is a good read:
http://kotaku.com/the-xbox-one-the-kotaku-review-1467960010

It portrays the kind of problems and issue I've been predicting. IMO - Microsoft have attempted something extremely ambitious and it will likely fall on that too. And by saying that, I'm not necessarely talking about its game centric abilities, which I think will be good enough to compete and capture a significant marketshare for it not to be considered a failure, but it's ability to sell as a primary entertainment device of the future.

To me it sounds like many of the solutions are patchwork ideas: Trying to solve a simple yet probably unsolvable problem with complex ideas. It might work in a very constrained area in ideal circumstances, but once you move outside it's comfort zone, flaws will start to add up.

At this point, I really wonder how long Microsoft sticks to their plan of pushing the Xbox as this kind of device, or if they'll abandon it at some point and focus on a device that's good at playing games, good for switching between apps, but eventually abandoning the voice-control and HDMI in ideas. IMO - it can still be a great device for switching between apps - or watching TV if they have an app that runs directly on the Xbox itself, but this whole integrating into your livingroom with the devices you have and control them thingy - is something I think will be far too ambitious to get right and will only cause more negativity than sales.

In the grandscheme of things, I really do wonder though how much this direction they've taken will cost them in terms of marketshare. Perhaps juggling the games part and the multimedia device will be the sticking point - they are kind of forced to launch because the PS4 is out - yet at the same time, it seems the multimedia device is not quite 'ready' either. Launch late, you risk losing gamers, launch early, you're showing off a product that clearly needs more time in regards to its multimedia features...

 

[Arwin]

I have a slightly opposite view here: they have some really good ideas, and setup a pretty decent framework, but the implementation is currently too weak to bring out its value. Much will depend on them being able to deliver the software and services goods.

Sony has been far more successful on delivering the goods day one, but they are also (wisely?) less ambitious. This is a long game, and the game is not over. Out of the gates, the PS4 clearly seems ahead in most areas, but there's a lot of promise on the Microsoft end to deliver something really cool, and it may not need them more than a year to bring everything to fruition now that the hardware is out.

 

[Brad Grenz]

Would this TV-only product require XBL Gold to use, as the X1 does, for the TV features?

So $200 plus a $60 a year service fee?

Yeah that'll fly ...

The Gold requirement will remain an enormous block to mass adoption as long as it is in place.

 

[Phil]

To be honest, when I wrote my post, the PS4 was not at the front of my thoughts. As a game console, I suspect the Xbox will be successfull enough for it to be substantial, be profitable and keep the support of multiplatform developers, at least US and Europe - which is good enough in video games terms.

As a CE device though, I think the battle is a lot more complicated. With consumer electronics, people have certain expectations. Nearly every review pointed it out so far; For the geeks, this new ambitious Xbox is exciting and with the potential, many are willing to forgive some shortcomings or issues that make the experience less perfect. It may be a decent framework and the tech is sure promising - but I find myself in agreement with especially the Kotaku reviewer when he raises the question "is this really what the market wants?", pointing out that controlling your livingroom with your voice might not be everyones thing, even if the new experience is exciting and fresh at first, but tends to reveal flaws and has the potential to be very frustrating once you start using it on a regular basis.

In order to replace the 100% working remote though, it needs to work flawless. And the hurdles it is facing with it's HDMI in and IR blaster are just too big to ever solve it completely - because it's something that isn't quite in their control. What they can control however, are the apps that they offer through the Xbox One. If they can offer apps that will replace your TV sat box entirely so that the entire thing is running in its own restricted confined and controlled area, they have more control over the experience.

The big question however is; how much good will it be when they launch their product to millions of mostly gamers who find that the other part of the features are not quite consistent enough for every day use yet? Will they ever get the traction once they iron out most flaws - half a year down the road? Or will it be a long forgotten cause by then because no one will raise an eyebrow anymore? And what about the market, that these features are supposed to be expanding on? Will they even care at that point?

The sad thing is; Kinect, Voicecontrols and the HDMI-In out of the box are the trumps cards Microsoft is holding. But if these 3 elements don't find much traction, then they are at this point no better off than the opposition who can theoretically do the same on their platform.

IMO Microsofts biggest strength is their ability to have a substantial market with their OS, phones and tablets. They should be building what Android and Apple have built up rather successfully over the past few years - an adaptable OS and market that spans devices from phones to tablets and should expand to your livingroom as well. Buy a product on your phone and be able to use it on your tablet and your TV.

 

[Rockster]

There is an interesting discussion on the bonus round where it sounds like Microsoft is planning on subsidizing and bundling Xbox One with a combination of Xbox Live and/or cable/satellite TV subscriptions. Not sure if it would be this lesser (media only) version or the full console or possibly options for both that insiders are talking about, but the sense I'm getting is that these versions might solve some of the IR blasting, HDMI routing, TV DVR issues by incorporating the tuners and software directly for those providers. This just wasn't something that was going to be ready for launch; but if cheap enough to distribute in this fashion without a direct price-cut on retail models, may be something with the potential to affect install base numbers at least here in the US.

 

[blakjedi]

The Gold requirement will remain an enormous block to mass adoption as long as it is in place.

I agree in some respects. Price is a very tricky thing. I think if MS priced the XO at parity with a PS4 with PS4 camera their sales would see a generous boost. XBLG is roughly the sane price as PSN plus so there's no real heartache in that pricing scheme.

 

[Brad Grenz]

I agree in some respects. Price is a very tricky thing. I think if MS priced the XO at parity with a PS4 with PS4 camera their sales would see a generous boost. XBLG is roughly the sane price as PSN plus so there's no real heartache in that pricing scheme.

Except you can't do any of Xbox One's fabulous multimedia things without it, while Sony only paywalls multiplayer. If you're not really a hard core gamer, but are interested in Xbox One as a convergence device you aren't going to be keen that you have to pay $60 a year for the entire life of the device just to keep them from locking out Netflix, HBO Go and Fantasy Football. Xbox One can't "go mainstream" with Gold the way it is.