Things are looking grim for the Xbox brand according to industry analyst firm DFC. Unfortunately, their analysis suggests they know almost nothing about gamers and are willing to re-write existing industry history to prove their flimsy points.
Come with me, and we’ll pick through the update the firm sent to investors following Microsoft’s E3 show. Remember, this is an outfit that purportedly helps investors figure out how to spend their money, which makes their off-base comments all the more dismaying.
“The most immediate problem is Microsoft killed the Xbox One Slim right out of the gate,” the report said. “If there were many Xbox 360, Wii U, and even PlayStation 4 consumers interested in an Xbox One this holiday season, they have now been told to wait until Scorpio arrives in 2017. Microsoft can only hope that the buzz Project Scorpio goes away soon but with the cat out of the bag, that is unlikely.”
While core gamers know about Scorpio, they aren’t exactly the audience for something like the Xbox One S.
Core gamers have, by this point, made their decision as to whether or not they’ll support the Xbox One, and the slim version wasn’t going to change any minds, though the Scorpio certainly could.
The Xbox One S is a sleeker, more attractive piece of hardware for the company to circle their wagons around and advertise to death. But the Scorpio? Your average consumer doesn’t know what a Scorpio is, other than “someone you don’t put in alone in a room with a Taurus.”
Microsoft isn’t going to be advertising the Scorpio, and when it does come out it’ll be significantly more expensive. Even if every GameStop employee tells everyone they know not to buy an Xbox One S, it’s still not the end of the world for the refresh.
But the Xbox One S isn’t the least of Microsoft’s problems, according to DFC, and this is where things really start to go off the rails.
“The pricing on the original Xbox One is great, and the Slim is wonderful, but all the important new games will be on PC, so why invest in a console? Just upgrade your PC. And if you do want a console, why buy now when Scorpio will be here later?” the post continued.
For most console gamers, telling them to “just upgrade your PC” isn’t much different from saying “just install a turbocharger in your car.” There’s definitely an audience for that, but it’s not the broader console-buying audience.
As for Xbox Play Anywhere, it’s a gamble – Microsoft is essentially giving up all their exclusives, or at least that’s what it looks like. For some gamers, absolutely, this does give less reason to purchase an Xbox One, but it’s not an end-to-end deal-killer.
I can’t imagine Microsoft is getting into this Xbox Play Anywhere initiative without having done research. They’re asking their developers to put up whole new branches of their productions to bring their creations out of the console world, where there’s one set (or two) of hardware to work with, and into the PC world where things are significantly more complicated. Just ask Batman: Arkham Knight developer Rocksteady about some of their adventures. That’s not something you step into lightly, even when you’re a bit desperate.
Sony’s playing with potential fire, too, though. The PlayStation VR headset is coming in October with its own $399 price tag, and the PlayStation 4 Neo is around the corner without a release date or pricetag. While they don’t have the danger of overlap that Microsoft is facing, they’re asking consumers for a lot of cash at once. While DFC notes that Sony faces a similar problem with the PlayStation 4 Neo, the lack of a PlayStation 4 hardware refresh akin to the Xbox One S significantly lessens the problem in DFC’s view, while Microsoft’s handling opens the door for greater success by Sony and Nintendo. I do think Sony’s tempting fate by releasing not just releasing the Neo so close to the PlayStation VR headset they have coming out in October, but also by being so vague about when the Neo will actually release.
Here’s where we get to the straight-up factual errors.
“When the PlayStation launched Sony was a more diverse company trying to use its game system to promote Blu-ray,” the firm wrote.
Not only is that inaccurate, it’s virtually the opposite of what happened. When the PlayStation released back in 1995, it was a CD-based game console; DVD was still two years out, let alone Blu-ray being over a decade out.
It was only because the PlayStation was wildly successful as a game console that Sony was then able to use the PlayStation 2 and 3 to sneak DVD and Blu-ray into consumer homes, accelerating the adoption of the former and the dominance of the latter over the the competing HD-DVD format.
Presumably the firm is talking about PlayStation 3, but even clarifying that suggests that they can’t differentiate between the different versions of the system.
When DFC starts to suggest, then, that it’s only a matter of time before Microsoft kills off or sells off the Xbox division, it’s hard not to let the eyes roll.
The Xbox division has been a profitable one for the company more often than not. This is also the company that let Windows Mobile scrape by for well over a decade before it became clear they were finally going to let it go to the retirement home to quietly die.
Microsoft can be agile when it comes to making up for mistakes – the number of consumer-focused changes the Xbox One has seen since Xbox boss Phil Spencer took over is nothing short of staggering – but they don’t start crying wolf at the slightest sign of bad times ahead, generally. Microsoft tends to be pretty patient.
Analysts are a bit like weather forecasters. They’re frequently wrong, because they’re trying to make assumptions about the future based entirely on the past.
Except this time, someone’s warning us of the storm of the century based more off some obviously uneducated opinions more than they are on actual information. And remember, these are people telling investors how to spend their millions.