*spin-off* Importance of graphics in the purchase decision process

[Squilliam]

Well Xbox is the brand, that's the word that needs to be in there somewhere. So like apple's phones are the iPhone 3, iPhone 3gs, iPhone 4s, etc (iPhone is the brand, postfix is the model), Microsoft can keep the Xbox prefix there. Personally I think the reusable platform is the direction they will go next gen, it just makes sense given how many devices they have out there, how many more they will have, how many more markets there are to grow into (cars, etc), and how to me it behooves them to make it easy for coders to get their code working on every device and hence give coders a piece of every possible revenue stream in as simple a way as possible. I like that with xna already, I just put out a game for Windows Phone and I can easily recompile it to work on Xbox 360 and PC today, and presumably tablet tomorrow. That's just a really nice advantage. What I'm curious about is how they will handle the transition from the 360. I don't think they had this all planned out at the time of the 360...whereas I expect Xbox Next to have the platform strategy in mind from day one so future hardware upgrades will be easier. Maybe they will offer "360 greatest hits" as downloadables, to where publishers can rebuild games to make sure they are compatible with Xbox Next, and have them as digital download only. Who knows, but that's the step I'm curious to see how they handle.

If they are following the Apple model then they'll have to also follow their MO in only upgrading things which make a difference to the majority of end users. Kinect and the console redesign on the outside both made a huge difference for the end users.

They can certainly continue to upgrade the internals, however they'll likely only upgrade minimally as far as it would take to improve the user experiences for the majority of use cases. At minimum they'd likely need to increase the bandwidth and processing power available to Kinect, improve multitasking if they want to follow on with what Nintendo are doing and perhaps clean up the visuals and offer a default 3D option. Effectively they could do all that with just a Wii-esque upgrade.

The other advantage to going with a long term platform strategy is they don't have to put all their eggs in one basket. Nothing stops them from releasing two sku's, a low end 6670 model for $199 and a high end 7950 model for $399. Unlike the old console model you can get royally screwed if people don't buy your expensive model as Sony painfully learned. But this way if they don't buy the $399 model then no big deal, there is still a $199 model that plays everything. I think they need to keep this in mind as the hardcore gamers are no longer the ones driving growth.

Would it be a good option to simply offer a more up to date Xbox 360 this year and follow on next year or 2014 that with a true next generation successor? If they want to keep the 360 on the market they may as well give in an overhaul so it can last another 5-6 years on its own. They can then initially split the market between media people/occasional gamers/etc towards the cheaper, older box and let the early adopters have access to their new and improved version in the following year. This is similar to the PS2/PS3 split except they'd be making moves to keep the 'PS2' viable as it's own entity.

So in a nutshell:

4 cores vs 3 with extra cache
480SP 'turks' core or equivalent, both on 28nm
1024MB GDDR5 @ ~70-80GB/S
Better USB bandwidth.
16GB flash
Blu Ray support for triple layer discs (forward compatible)
HDMI 1.4a
Blu Tooth and signalling hardware for possible tablets.
RRP: $299-$499 depending on HDD/Kinect

Xbox 360: cut the price to $129/149 and then decide later what to do with the legacy console.

 

[TheChefO]

Would it be a good option to simply offer a more up to date Xbox 360 this year and follow on next year or 2014 that with a true next generation successor?...

So in a nutshell:

4 cores vs 3 with extra cache
480SP 'turks' core or equivalent, both on 28nm
1024MB GDDR5 @ ~70-80GB/S
Better USB bandwidth.
16GB flash
Blu Ray support for triple layer discs (forward compatible)
HDMI 1.4a
Blu Tooth and signalling hardware for possible tablets.
RRP: $299-$499 depending on HDD/Kinect

Xbox 360: cut the price to $129/149 and then decide later what to do with the legacy console.

Doing such a venture will just suck the excitement and differentiation out of the xb720.

I get the idea of catering to the casuals with a better kinect experience, but this should come after (or worst case scenario at the same time) the new xb720 comes out.

Introduce the new uber xbox with better this, that, and the other thing ... a year later after core gamers have ponied up the bucks for the big boy system, introduce kinect2.0 with a scaled back console and lower price.


It's not a bad idea, but doing it the reverse way doesn't inspire purchases/desire ... it only weakens the brand.

It's the same concept Nvidia and AMD use, intro the high end GPU that most won't buy, but the bragging rights of the top end performance carries through the same product line.

Same thing auto makers do with sports or uber luxury cars. They know most buyers won't buy the top end of their line, but they come to see them and end up buying somewhere down the product line.

xbox720
+
xb720-lite

It sucks they don't have a better connection on existing xb360's as they could just leverage the existing consoles with a better kinect and call it a day for casuals (I'm sure they're still blown away by xb360 visuals after the years with Wii, facebook, ipad), but the usb2.0 port kills any notion of HD kinect. I'm not sure what the technical reasons are for the lag, but likely due to lack of processing ability in kinect.

I just think the existing xb360 userbase is already here and well suited to meet the demands of the casual gamer. It's the upper tier (hardcore gamer) that needs the new console. I'm not sure casuals would be all that excited for yet another new console so soon after they just bought Kinect.

It also lets marketing managers send the appropriate message to the appropriate market by having xb360 focus on casuals/kids/moms and focusing xb720 on the 18-35 crowd.

With all the talk of IOS selling millions and phones taking over the world, there is still a substantial market of gamers that DO care about graphics and will fork over big bucks to have a top end gaming console and top end games to match.

The above has been MS' recipe for success two consoles in a row. Without it, they'd be facing a dwindling windows revenue stream, a phone market that based them by, a tablet market that they missed the boat on, and their only "success" in the livingroom being webtv.

To think MS would abandon that recipe is unfathomable.

But hey they are the company that was ruling the smartphone market and let that slip away, and pioneered tablets, but let that market slip away, and are currently letting server and home OS markets slip away so ... I suppose it wouldn't be a huge surprise to see them screw this up as well...

 

[joker454]

The definition of hardcore gamer is up for debate, but people are obviously shifting away from Wii and still buying HD consoles. There was also a significant spend in PC components with the introduction of a game which finally took advantage of hardware built after 2005.

So if Hardcore is no longer driving growth, this would mostly be due to the fact that there isn't much of a hardcore offering to drive. The "hardest core" consoles available are still showing growth, while Wii isn't able to muster yoy flat sales even with a $100 bundle.

If there were a hardcore console available which was showing weak sales, I'd agree with the notion, but with xb360/ps3 being as good as it gets these days for the hardcore gamer (while keeping in mind that pc game hardware did see a pickup at the 2nd half of 2011) and the sales of those consoles still going strong in the face of declining Wii sales, tells me the opposite is true.

Casuals are potentially leaving toward tablets, phones, facebook, but the core gamers are still looking for deep & rich experiences.

The way to capture this casual audience is with a cheap kinect+xb360 bundle and with tablet + phone "live" games.

Ferrari knows that family sedans sell a ton more than sports cars, but they don't go scrapping their lineup and replacing them all with sedans. Instead, they add a Ferrari FF. Just as Porsche added the Cayenne when the SUV became super popular, but didn't scrap their lineup either.

Diluting the product lineup at the sacrifice of what lures customers to a company in the first place is a recipe for brand failure.

When I look at growth, I look at everything. Meaning anyone who buys a device and spends money on software and/or servivces after the fact. Hence I'm not just looking at consoles and games, I'm looking at phones, tablets, and any other gizmo manufacturers conjure up to where said software and services can be consumed on. To that effect the growth of the traditional hardcore gamer has taken a backseat to a new type of consumer. For whatever reason on console forums whenever non hardcore gamer is mentioned people immediately assume they are a Wii gamer. That's not what I mean at all, just fyi, there is far more to this than just PS3/360 as hardcore and Wii as everyone else.

Additionally, I still don't understand why people assume the core have to be sacrifice by going with a platform based machine and/or catering more to non core. In fact the experience for the core could possibly be improved. The reason you see much of the same old games on the traditional "hardcore consoles" it first because for the first half of the generation you are spending all your time jsut re-writing all your code and trying to get things to work, and for the second half you are spending so much money on making the games that you don't want to take any risks so you release sequels. That's why all the games we're playing are by and large derivative of stuff we've basically played back in 2005-2007. People keep mentioning how the hardware side of the businesss won't take losses this time around, they seem to be ok with that. But they forget the software side of the picture. The software side it turns out is identical to the hardware side. The first few years of a new console represent loss and huge risk. For the 1% that put out succesfull new ips like Gears or Uncharted, theere are 99% that put out failures. The software model quite frankly sucks as it is right now just like the hardware side, and where no one is expecting a $600 console again, something also has to give on the software side so that publishers aren't betting $100 million dollars on 32 red.

To that effect going with a continous platform will both save money with the publishers by reducing development costs, which in turn means they will be more willing to try new gaming experiences. If they don't have to spend 3 years figuring out how to get some esoteric new hardware how to color a pixel then they can spend it on the game itself. This in my mind is a good thing! Finally remember that even if they do cater to the casuals with a new machine, the hardware in that machine will still be *far* beyond what the "hardcore" are playing with right now.

And regarding your Ferrari example? The hardcore driversat the time thought Porche was insane when they brought out the Cayenne suv. So what was the result? The Cayenne ended up as the best selling Porche ever. Following that, the hardcore drivers thought the Porche Panamera was ugly and they would never buy it. So what was the result? The Panamera already because the best selling Porche ever. Now, what happened to the hardcore Porche drivers, did they stop buying Porches? No, they didn't. Instead the result is that Porche keps selling cars to hardcore drivers, and now also sell them to soccer moms and/or drivers that also want some comfort/utility to go along with their Porche. The long term result is that they succesfully catered to both markets to where now even Lamborghini is considering making an suv. Some food for though to those that think catering to new markets automatically means abandoning your existing ones.

Again no one is suggesting they release an uber low powered Wii, just because they may cater to non hardcore gamers doesn't mean the hardware won't be pretty good. I think by and large that is the fallacy in most arguments. The minute you suggest catering to non hardcore as well people assume they will release an Atari 5200. They can release good hardware to keep the core happy, good hardware to non hardcore happy, and a good software platform to not bankrupt publishers, reducing their risk in the process and letting they try and give us new gaming experiences rather than just all sequels.

If they are following the Apple model then they'll have to also follow their MO in only upgrading things which make a difference to the majority of end users. Kinect and the console redesign on the outside both made a huge difference for the end users.

Kinect as standard is all but a must in my mind, and that may be what drives a two sku software platform type setup because of the added costs of Kinect. In other words they may need a weakker 6670 type model just to have something priced affordably with Kinect as standard, then the other sku can be the pricier baller model.

They can certainly continue to upgrade the internals, however they'll likely only upgrade minimally as far as it would take to improve the user experiences for the majority of use cases. At minimum they'd likely need to increase the bandwidth and processing power available to Kinect, improve multitasking if they want to follow on with what Nintendo are doing and perhaps clean up the visuals and offer a default 3D option. Effectively they could do all that with just a Wii-esque upgrade.

That's one of those things that the market will dictate, which is the beauty of a software platform. If a few years after a product is released you notice that people primary complaints are wanting better shadows and aa, and other people wanting more hdd space to store home videos of their kids, then your next product can deal with that.

Would it be a good option to simply offer a more up to date Xbox 360 this year and follow on next year or 2014 that with a true next generation successor? If they want to keep the 360 on the market they may as well give in an overhaul so it can last another 5-6 years on its own. They can then initially split the market between media people/occasional gamers/etc towards the cheaper, older box and let the early adopters have access to their new and improved version in the following year. This is similar to the PS2/PS3 split except they'd be making moves to keep the 'PS2' viable as it's own entity.

Personally I'm not a fan of releasing a 360+. They should get their platform strategy going and put out a machine that runs some flavor of Windows 8 and get that going. In theory they could try to get that os working on existing 360's...but that hardware is so old that it would set the baseline too low to start with, as it would imply that their new software platform is going with a 2005 hardware baseline. Plus the 360 doesn't have Kinect standard, I think that should be mandatory in their hardware spec.

 

[Squilliam]

Doing such a venture will just suck the excitement and differentiation out of the xb720.

I get the idea of catering to the casuals with a better kinect experience, but this should come after (or worst case scenario at the same time) the new xb720 comes out.

Introduce the new uber xbox with better this, that, and the other thing ... a year later after core gamers have ponied up the bucks for the big boy system, introduce kinect2.0 with a scaled back console and lower price.

xbox720
+
xb720-lite

When I look at growth, I look at everything. Meaning anyone who buys a device and spends money on software and/or servivces after the fact. Hence I'm not just looking at consoles and games, I'm looking at phones, tablets, and any other gizmo manufacturers conjure up to where said software and services can be consumed on. To that effect the growth of the traditional hardcore gamer has taken a backseat to a new type of consumer. For whatever reason on console forums whenever non hardcore gamer is mentioned people immediately assume they are a Wii gamer. That's not what I mean at all, just fyi, there is far more to this than just PS3/360 as hardcore and Wii as everyone else.

Maybe the question is how much of an upgrade benefits media/casual users whilst still being relevant to core gamers and the like? Perhaps something like:

Xbox 2 + Xbox 3 lite 2012-14(DX9.5 generation, forward compatible games with Blu Ray layer)

Xbox 3 lite + Xbox 3 full 2014+ (DX11+ generation, previous Blu Ray games upscaled/improved).

They could put a lite version of Windows 8 on the Xbox 3 lite and at the same time get on the tablet console bandwagon and improved visuals of the Wii U whilst not going any further than is needed to improve the user experience for their less performance demanding customers. The core gamers may complain but they'll buy it anyway because it'd still represent a reasonably significant upgrade for the experience over the legacy Xbox 360.

I think it'd be a good move because it'd open up new ways to combine their products and services and synergise with their tablet/phone/desktop OS markets whilst at the same time giving them flexibility to respond to market conditions. If the PS4 comes out with significant performance or feature improvements which the market wants then they can easily shift gears and offer a higher featured Xbox 3 full spec model to compete. They'd still have a lower priced, lower featured model to position at the $199 price point in order to capture the value console market and at that point they can consign the old Xbox 360 to the history books.

You could consider the Xbox 2 and Xbox 3 lite as one continuous software platform and the Xbox 3 lite/full as another. If all major games come out towards the end of 2012 with an extra layer of Blu Ray data that'd ensure forward compatibility and lock in customers with existing libraries because they'd have the option of simply buying the latest Xbox to unlock the extra features of existing games. All they'd have to do is EOL the current Xbox 360 design in 2012 and do a direct replacement with the new half-step platform at the same price point. Then in 2014/15 they can EOL the current Xbox 360 games and release solely on Blu Ray for the Xbox 3 lite/full consoles.

They could open up further monetizing potentional from their platform. They could make DVD/Blu Ray playback an optional extra @ $49 so turn it into a potential money maker rather than deadweight cost. The rest of the hardware shouldn't cost any significant extra quantity of money aside from the fixed development and retooling costs and thus they could likely offer it at the same price as the current Xbox 360. So long as they make money selling the hardware they'd encourage people to upgrade to the latest hardware like Apple does whilst slowly transitioning the laggards as they eventually buy in/replace older consoles. Apple makes a lot of money this way so why shouldn't they?

In terms of market positioning they'd have the lowest price current generation console @ $199 for the entry level buyer, an equivalent $249 media center to the PS3, Kinect based consoles starting from $299 to compete with the Wii U @ $299-399 est price with relatively similar performance and the option of tablet based games from $499 upwards ($300 tablet?) with the upside being that the Windows 8 tablet is useful as an independent product. Whilst the cost for tablets overall would be high, the initial sticker shock wouldn't be as bad because people can still pay $300 and go home with a viable console with a couple of games and get the tablet later if it appeals.

 

[TheChefO]

Now, what happened to the hardcore Porche drivers, did they stop buying Porches?

No, they bought the 911 just as they always did. That's why I brought up the example. Porsche didn't dilute their product to cater to a new audience while abandoning what got them there. Neither did Ferrari. Neither will Lamborghini if the do go down the SUV route.

Translating this back to the console realm, I'm perfectly fine with attempting to lure in a less demanding casual customer. They are already on that trajectory with Kinect and xb360. I just don't see the purpose in diluting xb720 to cater to this market when xb360+kinect already fills that niche and does so quite well.

It would be similar to having a Porsche 911 that after years on the market will turn itself into a bigger 4 door vehicle and drop in price. Thus, no need to introduce a Cayenne. Just work on the marketing for the old 911 to let the 4 door lovers know that the old model 911 fills that need quite well and at a reasonable price too.

Kinect as standard is all but a must in my mind, and that may be what drives a two sku software platform type setup because of the added costs of Kinect. In other words they may need a weakker 6670 type model just to have something priced affordably with Kinect as standard, then the other sku can be the pricier baller model.

That's diluting the new 911 to cater to a different market that wants a four door sedan.

That's one of those things that the market will dictate, which is the beauty of a software platform. If a few years after a product is released you notice that people primary complaints are wanting better shadows and aa, and other people wanting more hdd space to store home videos of their kids, then your next product can deal with that.

An extendable platform is an interesting idea, but it doesn't have to equate to a $100 BOM to work.

Personally I'm not a fan of releasing a 360+. They should get their platform strategy going and put out a machine that runs some flavor of Windows 8 and get that going. In theory they could try to get that os working on existing 360's...but that hardware is so old that it would set the baseline too low to start with, as it would imply that their new software platform is going with a 2005 hardware baseline. Plus the 360 doesn't have Kinect standard, I think that should be mandatory in their hardware spec.

They've sold a good number of kinects, but still not near the 50+ million which have xb360 which tells me that a good portion of the userbase doesn't want kinect. They may as well mandate that every game must have 3D enabled. Kinect enabled support is one thing, but forcing that hardware down everyone's throat will not have a positive reaction. Especially if kinect directly results in the chipset seeing significant cutbacks.

-------------------------------

I completely get what you were saying WRT software development and not wanting a complex and difficult to code for architecture which will drive up software dev costs, but this can be achieved by scaling the existing architecture and dropping in a new dx11 GPU. However that doesn't mean it needs to be a 6670 to be easy to code. In fact, a higher spec GPU should make it easier to hit performance benchmarks.