Understanding the Console War - Part 1

Competition is always interesting and exciting. The drama that builds is both entertaining and exacerbating. Shots are fired and people pick sides. The emotion is real and feelings will be hurt. This year we will be treated to an old fashioned head to head competition. If you are reasonable and realistic, you can partake in the ensuing flame war and come out largely unscathed. It is, after all, just a game.

Microsoft and Sony are both poised to introduce their new products into the market this November. Both have a lot riding on their respective devices. Both have fairly similar objectives, which is simply to come out on top and capture the highest amount of market share. The devices themselves are actually nothing more than Trojan Horses designed to be used as delivery devices for their service based products. First we will examine the Xbox One

The decision to implement DRM inside of Microsoft's Xbox One was a decision that was made a long time ago. The idea was to make physical entertainment more like its digital counterpart. When someone downloads a game on a iPhone or iPad, that content isn't transferable or exchangeable. By controlling what content could be traded, and how that material could be traded, they were tying to maximize the amount of money that could be made on a single physical product. Not only was this an attempt to unwanted resales, it was an attempt to push people towards digital entertainment, which is intrinsically nontransferable. The loss of ownership rights on physical property was obviously meet with harsh criticism for reasons that are beyond the scope of this post.

This was part of their original plan but was later scraped. Now the general plan for content delivery includes providing digital downloads and providing access to services such as Netflix, Hulu, Twitch Streaming and cloud storage. To maximize profits, these services will be available to individuals that sign up for their online access program known as Xbox Live Gold. This is a very profitable revenue stream for them because they don't actually have to provide any content; they merely have to allow you to access these services that are usually hosted by another company. In addition, the Xbox One will allow for pass-through of other HDMI output devices, including Cable and Satellite boxes. This gives them the opportunity to market additional services such as Fantasy Sports updates that can be superimposed over live broadcasts.

There are dozens of other services and options that the Xbox One can become a conduit for, but this too is beyond the scope of this post. To that end, they have included a high tech camera know as Kinect into every Xbox One. To understand why they have done this, look no further than the current generation iteration of the Kinect. Microsoft sold approximately 80 million Xbox 360 consoles. They only, however, sold 24 million Kinect devices. This means that as much as 60% (save replacement purchases) of Xbox owners didn't see a compelling reason to pay the $150 for the camera.

Microsoft believes that developers didn't feel the need to provide Kinect content because they knew that the only a fraction of the user base would benefit. Microsoft hopes to gain exclusive features from developers that will specifically utilize the camera. By taking the purchasing decision out of the hands of the consumers, they believe that they can deliver unique experiences that users will be thankful for in the long run. Also, Microsoft will be able to provide new mediums for advertisement that leverage the abilities of Kinect in innovative ways for those who are interested.

From a technical side, the Xbox One is roughly 5 to 6 times more powerful than the Xbox 360. It features a 8-core custom AMD CPU that shares die space with an 1.31TFlop GPU integrated into an APU design. It features 8GB of DDR3 memory and a 32MB chuck of high speed ESRam designed to boost the system bandwidth. This system was designed to deliver higher graphical fidelity, richer environments and larger resources for developers. In a later post, I will dive into the workings of the system and explain how the parts work in tandem; and explain the nature of the memory system, and how Microsoft hopes it can be utilized. I will do so as plainly as possible.

The Xbox One launches on November 22nd and will cost $499. In part 3 we will examine the importance of these two factors and predict how it will effect available market share.

The next chapter of this blog will be an brief examination of Sony's PS4; including its derived services, packaging decisions and a short look at its technical specifications.