Microsoft & Xbox FTW (For the Win)

In my previous article, I described the steps that Microsoft is taking to bridge the gap between the Windows PC and Xbox app platforms through the Universal Windows Platform (UWP). But the problem with this approach is that it's still fully at the discretion of the game developer to go down this path. Without a major incentive to totally relearn all of their tooling and software development workflows, the game developers will stick to the status quo and write for PC or Xbox as separate and distinct platforms. I propose that Microsoft create a bridge to the UWP bridge that provides a benefit to the gamers who are faced with choosing between playing on a console or a PC.

Double Your Pleasure

1) Enable the Xbox console to function as a standard Windows 10 PC.
Every Xbox has the same basic architecture of a Windows PC: an x86 CPU, a discrete GPU with VRAM, 8GB of system RAM, storage, HDMI output, wired & wireless networking, and several USB 3.0 ports. Sounds like a PC to me. Imagine how much more likely would a parent or gamer would be willing to spend $300 on a console if it could also double as a respectable PC that lets them play "real" Minecraft, Counter Strike:GO, League of Legends, and other PC exclusive titles, along with doing homework, surfing the web, etc. Image how many PC gamers would choose to buy Scorpio instead of a traditional desktop, knowing they are getting the graphics power of an NVIDIA GTX 1070! This could be conditioned upon the user buying an external USB hard drive to hold the secondary Windows 10 OS and programs, and even limiting the ability for the user to change certain OS configuration settings (e.g. only support the Edge browser and Bing search), but it would still be a steal compared to buying or building your own PC.

Upside: This could significantly boost demand for the Xbox One console, now that its value proposition goes well beyond gaming to include general purposing PC computing.  The resulting boost to the installed base provides a funnel for more sales of games, which is the primary monetization engine for the Xbox. A secondary benefit is that Microsoft will gain the ability to monetize console users engaging the Windows experience, such as sales of PC apps from the Store, not to mention Microsoft's own apps & services like Bing, Office 365, and Skype.

Downside: The Xbox hardware is at best a break even business, likely a negative margin business $300.  Console sales are known to be highly elastic (that is, demand generally goes up as the price goes down), plus Microsoft has to price the Xbox One competitively against Sony's PS4. So the profit is made primarily from sales of games, where Microsoft receives a share of the revenue for every game sold (similar to the ink jet printer or razor blade business model). If a significant number of Xbox One buyers purchase the console and use it only as a PC and never buy content from the Store, that would reduce the main profit engine that is intended to offset the margin loss in the hardware. A second downside is that such a low cost PC offering may upset other Windows OEM partners, as Microsoft is now offering a Windows PC that is priced well below traditional market value. Windows thrives from having a heathy ecosystem of OEMs who make PCs at a variety of price points and form factors, so it's important not to lose the OEM partners.

2) Enable Windows 10 PCs to function as an XBox One.
The end game here is to allow a PC gamer to easily play Xbox One games where they are, and on their existing hardware. No need to leave their comfy DXRacer chair and their 27 inch monitor with 1ms response time, 144Hz refresh and GSync. No need to have yet another box that they have to buy and wait over a minute to boot up. Given that most modern Windows gaming PCs have hardware that is significantly more powerful that the current Xbox One or XBox One S, why not let gamers turn their Windows PCs into an XBox console? Microsoft has attempted to bring this virtual  experience to PCs by enabling Windows 10 PCs to stream games from a LAN-connected Xbox One. However, many PC gamers have no desire to buy a hardware device that they consider to be technically inferior to their gaming rigs, and the streaming experience is not the most robust, especially for users who stream via Wi-Fi.

I imagine that the biggest concerns with letting users build their own machines for running the XBox platform are: (i) security and ensuring that the platform cannot be hacked to enable piracy of games or exploits & cheating, and (2) the QA nightmare of ensuring it will work with the millions of possible hardware permutations that the open PC architecture presents. Both of these concerns could be reasonably mitigated by working with hardware makers and only allowing certain "pre-certified" components (namely the motherboard) to support an Xbox One partition that is adequately encrypted with hardware measures like the consoles do now. This option does not have to be a cheap one or widely available in a wide selection of components, as PC gamers are generally willing to pay a premium for high performance hardware with future proofing features. But I bet that some smart guys at Intel & Microsoft who could figure out how to design a retail motherboard that could securely install an XBox One partition that is at least as secure as what the current consoles have. Just to prove the demand, Microsoft could start by partnering with a well regarded gaming PC makers like Razer to offer gaming PCs with the required security hardware countermeasures that make them "XBox Ready," or make it a feature on a future Surface PC.

Upside: This move effectively expands the reach of the Xbox platform but without incurring the financial losses from hardware sales. And with a larger installed base of Xbox One, game developers are motivated to prioritize the Xbox over other platforms with their games, and richer content brings more users coming to the platform, which brings more content, and now we have a virtuous cycle. Sales of content from the Store feeds the profit machine, and Microsoft now gains an opening to financially benefit from PC gamers who traditionally buy their games from third party distribution platforms like Steam, where Microsoft does not receive any revenue.

Downside: There would no doubt be significant engineering work to enable this capability with Windows PCs. The worst case scenario would be having the XBox's security mechanisms compromised, resulting in piracy of game content and hacking that brings rampant cheating into online gameplay. There would potentially be a large amount of QA testing involved to ensure such a secondary platform partition would run reliably on numerous possible permutations of third party hardware. The latter could be mitigated by only enabling this in select pre-configured PC systems.

The Xbox Play Anywhere strategy is brilliant, and is the right end state for Microsoft to have a unified gaming platform that appeals PC gamers, console gamers, and game developers. But it could be a very long time (if ever) that we see game developers embrace it and make Play Anywhere games the de facto release choice. Changing the minds of software developers who currently view Play Anywhere as extra work with minimal gain is the critical path to Microsoft's success gaming. My hunch is that we will see much faster user adoption of this "dual platform" offering, and that it will catalyze the thawing of the wall that current divides console and PC gamers.