Xbox One: Almost 3 years later

Up through the summer of 2016, the PS4 has been handily outselling the Xbox One at a ratio of almost 2-to-1. I believe this was due in large part to a disastrous E3 2013 launch that revealed 1) the console's higher starting price point, and 2) a marketing focus to be a mass market media device for non-gamers.  While Sony's E3 launch was laser focused on gaming, Microsoft's event spent a significant portion of the time demonstrating things like its ability to watch broadcast TV and the Kinect's ability to support hand gestures and voice commands. The moment they announced that it would be priced at $499 ($100 more than the PS4), the audience reacted with an uncomfortable pause, and a subdued applause that reflected palpable disappointment. To make matter worse, there was also a requirement to be connected online to even solo campaign games, and no ability to trade-in or share game discs. Just 9 days after E3, the Xbox boss issued a public statement to announce that the latter two policies would be reversed. 12 days after that, it was announced that the same Xbox boss was leaving Microsoft to become Zynga's CEO. That's a rough a way to start off a new product launch.

Things continued to be rough for the Xbox One over time:

• Feb 2013: Sony announces Destiny will have Playstation exclusive content.
• Aug 2014: Benchmarks show PS4 hardware slightly more powerful than Xbox One.
• Nov 2014: Halo Master Chief Collection launches, but turns out to be unplayable due to severe online multiplayer matching bugs. It was not until the April 2015 patch that the game had a robust multiplayer matchmaking experience.
• June 2015: Call of Duty Black Ops 3 announced as a "Playstation first" title, a privilege that Xbox had held for the last several Call of Duty titles.
• June 2016: Call of Duty Infinite Warfare announced as again being a "Playstation first" title.

But there is a silver lining:

• Mar 2014: Phil Spencer officially promoted as new Xbox chief. By all accounts, he has done everything right and has regained the trust of Xbox players.
• June 2015: Microsoft announces backwards compatibility of Xbox 360 games at no cost, along with a sizable list of supported games.
• Oct 2015: Halo 5 releases with a fairly flawless online experience.
• March 2016: Microsoft announces opening up Xbox Live service to support cross platform play, including other consoles.
• June 2016: Xbox One S and the beastly 4K-capable Scorpio announced.
• July 2016: 343 reveals that the Halo 5 has the highest monthly active player count since Halo 3.
• Sept 2016: NPD Group reports that Xbox One outsold PS4 in July and Aug 2016.

The last point that the XBox One actually outsold PS4 for the last 2 months is what I find most intriguing, given the historical 2-to-1 volumes between the two consoles. My guess is that this is due to the "Osborne Effect" that cooled down PS4 sales while consumers waited to hear about the rumored PS4 Neo, along with aggressive pricing and compelling new upgrades that increased demand for the new Xbox One S.

So what does the future hold for Xbox?  It's main competitor, PS4, has a lot still going for it: a big installed base of players who are telling their friends to get one and play with them, a healthy lineup of titles with exclusive or early release content, a cost-effective virtual reality offering, and Playstation Now, an innovative app streaming service to support PS3 games.

My personal take: Xbox One will make a come back. It might take a few years to make up for the gap in the PS4's player base, but Microsoft is not merely chasing after Playstation players. Microsoft has a unique approach and player base that they are tapping to be the dominant gaming platform: PC gamers. Think PC gaming is dying? Intel thinks there are 711M PC gamers in the world, and the Entertainment Software Association puts it at 1.2B. The PC game Dota 2 had an $18.5M tournament prize pool in 2016, compared to Call of Duty's (console) tournament purse of $1M.

The Xbox One and Windows 10 now run the same app platform, enabling game developers to make Universal Windows Platform (UWP) games that can run on both. Xbox Play Anywhere further allows games to be bought once on either the console or a PC, and entitled to played on both with seamless roaming between devices. The Xbox and Windows Stores have merged to unify what used to be two distinct gaming environments. Unlike the old Microsoft who might have taken a draconian approach, Microsoft is doing this in a way that gives choice to the game developers and the players.

For developers, they are free to choose to participate in the unified platform that lets them author once and sell to a much larger customer base through a single store. This means making the move to authoring as a UWP app, publishing in the unified Xbox/Windows Store, and if they choose, enabling cross platform play for online players between PC and console. Or they can keep going old school, authoring for Xbox and PCs with separate dev teams, or only one platform with a smaller customer audience. Perhaps the only downside of UWP is that game do not have the opportunity to double dip by selling two copies to players who want to play on both PC and Xbox, but the number of players who would do this is very small.

For the gamers, they simply go about doing things the way that they've always done: buy their games, and play where they want. The only difference is that games that embrace Play Anywhere might have players mixed from both console and PC matching up. Again, this will be up to the developers to enable cross platform online play, and I'm sure they will be sensitive about ensuring it will be an even playing field where players on particular platforms do not receive inherent advantages.

Microsoft is leading developers and gamers into this new unified world by launching their popular first party games Gears of War 4, Forza Horizon 3, and Halo Wars 2 as Play Anywhere. Partners have responded by announcing another dozen games added to the list.  On Sept 8, 2016, 343 Industries released the Halo 5 Forge for Windows 10 as a free app, which not only allows users to design their own maps, but to also play online with other PC players to test the maps. While 343 has not confirmed making Halo a Play Anywhere title, this seems to be a strong hint towards that direction. As someone who was originally a PC gamer and became a console gamer through friends who recruited me to play Halo, it excites me to no end to think that I might be able to play my first love on my gaming PC rig, with a diverse and larger community of gamers.