DEBATE: On the Xbox One and Microsoft’s Console Future

Friday, June 7th, 2013

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Microsoft Xbox One Debate

Welcome to our latest debate. This is the second half of a debate between Jeff Neuenschwander, co-Editorial Head and author of the Jeff’s Musings opinion series, and Guy Rainey, Assistant Editor and author of the Pretentious Opinionist opinion series.

The basic rules are the same as with the used game fee debate. First, each contributor will get to make a statement of up to 400 words. Second, after each statement, there will be a cross-examination period where the opposition can ask the contributor up to five questions. Third, and most important, there will be no fighting, name calling, or degrading language of any kind toward an opponent, and each contributor will treat the other with respect.

TODAY’S TOPIC: The backlash against the reveal of the Xbox One and the subsequent interviews afterward was rather massive, with some gamers calling for an all-out boycott of Xbox products. If this boycott is successful, it could significantly lower the units sold from the Xbox 360’s 77 million. If the Xbox One fails, will Microsoft continue to make consoles?



JEFF: My dad has always said that Microsoft makes game consoles just to show that they can. And frankly, if you look at the financials, it’s hard to argue against him.

From the very beginning, the Xbox brand has been a vanity project for Microsoft. They took a massive loss on the first console and kept going. It wasn’t until the second half of the Xbox 360’s life span that they started to make a profit on their gaming division. To me, it was just a status symbol and a way for Bill Gates to give a giant middle finger to Steve Jobs and Apple.

What even constitutes failure for a console? The GameCube could only muster 21 million in sales but was still able to make some money for Nintendo. The Xbox sold more than the GameCube but lost hundreds of millions in that generation. Clearly, you could make a case for either one being a failure (or both, for that matter), but it’s all a matter of how you look at it.

Frankly, it would take bigger losses than they had with the Xbox for Microsoft to bow out after the Xbox One. There are three reasons why I believe this. One: the status symbol of being one of the big console makers. The other two: Windows and Office. These last two still have the biggest market share in their respective markets. And Microsoft makes money hand over fist with them through yearly licenses that people pay for. So, even with a massive loss, they can still tap into their Windows and Office money to cover their losses.

However, if they keep with what appear to be their current plans, the Xbox One may end up being one of those Sega consoles between the Genesis and the Dreamcast. It would be the start of the downfall of the Xbox brand, but not the end. It could very well be their Saturn, since Microsoft’s Genesis (the Xbox 360) has already started to gather ill will for things like charging people just to use pay-to-play apps like Netflix and having no self-publishing on Xbox Live, similar to Sega and their poor add-ons in the 1990s.

It will not be the final console for Microsoft. However, it could be their penultimate console.



GUY: Is having a console that is losing to everything a good status symbol? That seems to be the reason the GameCube is considered a failure, and why the PS3 was considered a failure for so long.

JEFF: Perhaps not, but being a console maker is what will drive them for one more generation. If they have any dignity, if the Xbox One bottoms out, they will make one last push for relevance in the video game industry (and perhaps drop some of the ludicrous aspects of the One).

We’ve seen it at least three times before in the industry with the Jaguar, the Dreamcast, and the Wii. All came after consoles that were considered dismal when it came to sales. Now, two did fail, but knowing that one succeeded (the Wii) will be the driving force that gets Microsoft into the 9th generation.

GUY: What if the console sells 10 million or fewer? Do you think they would have the arrogance to continue?

JEFF: Well, we are talking about Microsoft. They are trying to make your friend buy a game when you’re just trying to let him borrow it for a few days.

For me, they would have to sell worse than the Atari 7800 (3.77 million) for them to even consider stepping out. They won’t back out quietly. And they won’t sell worse than the 7800.



GUY: This is a very interesting question. No doubt Microsoft could make a new console if it so chooses. After all, this is a company that came back for a second round after losing hundreds of millions of dollars on the original Xbox. But would they? I’m not so sure.

Let’s first define a failure. I think if the console sells 30 million units or fewer in its lifetime, it will be a complete failure. Okay, now that that’s established, let’s talk about Microsoft’s grand strategy for the Xbox One.

Microsoft is finally doubling down on a concept that was there from the beginning: making the Xbox an all-in-one entertainment hub. This is what the Xbox 360 has been trying to be for the last 5 years, and that’s what the Xbox One announcement was all about. If this fails, what incentive will Microsoft shareholders have to support another one? At least with the first Xbox, they could say, “Look, we simply weren’t able to make the media box we intended, so give us another chance.”

Now that the 360 has been pretty successful overall, of course they were going to green-light another one. But if this media hub idea completely fails to attract consumers, if the whole grand vision of the Xbox brand turns out to be the wrong bet, why would shareholders allow Microsoft to try again? If stock prices plummet, Microsoft will need to listen to its shareholders, and by that point, consoles (at least those not made by Nintendo) may well be dead. So why bother?



JEFF: But what if the losses aren’t that deep, even with a number like 30 million? Do you think they could offset those losses with the money they get from Windows and Office licenses?

GUY: They could, but why would they want to? They are banking on riding Netflix, Hulu, and all the rest with mandatory Xbox Live Gold subscriptions. In other words, they want to profit off of other services through their system. With TVs, Blu-ray players, and the competing consoles now offering the same services for free, why should customers pay for Xbox Live? Xbox Live subscriptions have printed money for Microsoft for the past decade, and they probably think they will continue to. If they don’t, what incentive will they have to try again?

JEFF: But isn’t that assuming that all those people are informed about the other consoles? How informed do you believe the average console buyer is?

GUY: I suspect Sony will match the media capabilities of the Xbox One, for the most part. They haven’t announced plans like that because for now, they want to focus on the gamer. Come the holiday season, both Sony and Microsoft will heavily promote their products. Microsoft will bill its product as it has thus far: as a media box. All Sony would have to say is, “We can do that, too, but for free.”

Plus, I wouldn’t count out children here. If every child who owns an Xbox 360 sees that they won’t be able to borrow games from their friends, they’ll ask for a PlayStation 4 (which, at the moment, seems to support that, though we’ll see). I also wouldn’t count out news outlets looking for Orwellian technology horror stories to exploit.

JEFF: Funny that you bring up the media. Most of the mainstream media was touting Tuesday, May 21st, as a great day for gamers. (This was Tuesday night, mind you, when the confusion was at its highest.) Would mainstream media actually care about something they see as little more than a hobby for kids?

GUY: If they thought such a story could bring in more viewers or readers. As human beings, there’s something compelling about bad news. That’s why I feverishly pore over news items regarding the train wreck that has thus far been the PlayStation Vita and pick up every Big Brother tidbit released about the Xbox One. Other than that, I can’t say for certain.

JEFF: Hypothetical situation: what if the economy collapses, and the Xbox One doesn’t get to 30 million but still has a pretty good market share? Would that be considered enough of a failure for Microsoft to stop making consoles?

GUY: If the economy collapses, I think we’ll have more to deal with than game consoles. The problem with that scenario is the One will (likely) be a very expensive machine to make. People assume that a new generation brings new technology. If, to save costs, the successor used much of the same tech that’s in the One, people would skip it, even if the graphics were still outstanding (as they are now. We don’t need a new generation, in my opinion; we just need fresh ideas).


What’s your opinion? Leave a comment below.

  • Vinicius

    My problem with this console is that it only works on the US.

    The stores that are gonna handle the used games are not avaliable in every country, voice commands on the kinect won’t work because only a small number of people speaks english, and let’s not talk about the conect once every 24 hour is, even on the US this feature might not work.

    • -Majin-

      About the shops; Depending on what country you are they have other deals, here in belgium they have a contract with Game Mania.

      What the biggest problem is like you said that they are excluding anyone who does not fit the creteria; Stable internet connection, natively english, HD tellevision, a monthly fee(and that might rack even more up for films and the like)

    • While I agree with you on our other two points, it’s simply not true that “only a small number of people speaks english.” According to the article I’ve linked below, only Mandarin and Spanish have more native speakers, and if you count non-native speakers, “it’s probably the most commonly spoken language in the world.”

    • Vinicius

      Maybe I exagerated a little, but it was for emphasis.

  • madmofo145

    What seems to be ignored in the pro argument is that Atari, Sega, and Nintendo were all game companies, and ending their lives as console makers could have doomed their companies. Microsoft is not primarily a gaming company, and as pointed out, if the grand experiment fails then so be it.

  • Ross MacPherson

    There is a difference between attempting to redefine the console genre as a media hub and burying the very idea of a video gaming console by bastardizing the success of the secondary market.

    The “X-Bone” isn’t going to be able to funnel all these free services through their XBLive account subscriptions and declare themselves victors of the console wars. Their apparent lack of game focus thus far is more unsettling than exciting. I know that SOME people bought a PS3 because it can play Blu-Ray movies, but how many of those people NEVER bought a PS3 game? Additionally, the controlled environment of the XBox One looks more cumbersome than anything else. I see the features of this machine and I am not excited. My first reaction is… why do I need that? Is Microsoft really expecting to spend so much time educating people why these features are so cool instead of showing what the machine is capable of?

    And oh god… the navigation is just annoying! We’ve all adapted to menus when we start up our consoles, but remember when a flick of a power switch and pressing start was enough to play an actual GAME?

  • Coarse

    If it bombs, they can always patch the anti-consumerism out of the console later. The damage might be done by then, though.

  • Jonah Rosen

    I’m sorry, but why is this still even a thing? The XBONE is fucked, Microsoft’s “game division” (At this point, I use this term VERY loosely) is going to go the way of SEGA & Atari before it, end of story.

    • unknowncast

      Because we have no idea if America is willing to believe this is the new normal.

    • Jonah Rosen

      Well I sure as hell don’t! And shouldn’t that be North America, because I’m sure it’ll affect us Canadians as much as you guys down in America (I know, I’m being a little nitpicky, but still.)

    • unknowncast

      This is the 1% Machine and was designed for Americans only.

      Yes, I went there.

    • Jonah Rosen

      Fine, America can keep it, I don’t want anything to do with this garbage, just like I didn’t want anything to do with the 360 after realizing what a load of garbage it was. (especially for people like me who don’t like bro-shooter 337.) I’d rather stick to my PS3 and, once it gets some good games in, my Wii U

      Yes, ‘I’ went THERE!

  • unknowncast

    Ok, there really should not be an debate against the First Sale Doctrine or one’s property from one’s purchase.

    • smacd

      Actually this is a prime example where this should be questioned. Software is intrinsically an intangible object. In many cases, you don’t “own” it, you have purchased a license to use a compiled version of the code and nothing else. It may come on a physical disc, and that portion you may sell at will, but that doesn’t necessarily mean that the new owner of the physical disc has the right to use the intangible bits stored on the disc.

      Its been a murky legal issue for a LONG time. I know the EU has made a decision to allow people to re-sell their software licenses, but it is still open for debate in the US.

  • Xbox One is the biggest failure of gaming after the Virtual Boy, end of story

    • Vinicius

      I think the Xbone is more of a Atari jaguar, since the VB played games.

  • Roberto Ruiz Contreras

    This console is going to change the way I buy games, right now I buy exclusives on PS3 & Wii(U) and multiplataform on XBOX360, but with all of these things that Microsoft is doing I will have to change into first buying a PS4 and buying games for it, then after a Price Drop or two I will buy an XBOX ONE just for exlusives like Halo, Fable, Alan Wake, Gear of War, etc.

    • Ryan_oprainfall

      Nice avatar.

    • Guy Rainey

      I doubt that Alan Wake will be an Xbox One exclusive. It may be console exclusive, but the two Alan Wake game did come to PC.

  • Mizu D

    MS DRM for the X-One is a once divorced thing. 360 is my first and last MS console for quite some time. I really enjoyed it, my favorite gaming controller, great internet, lots of great games, the system for jap shmups, etc. After 100+ games on it, it is time to move away from the X ecosystem into something else or back to Nintendo.

  • Rick Xeros

    Good debate! Honestly I can see both your arguments as pretty valid. However, I think there’s a middle ground here, they will make another console if Xbox One fails, but it will be a 2.0 version of the same system at a lower price point, that’s how PS3 managed to make its comeback, using cheaper parts and taking out what didn’t work. So, I don’t know if they’ll make a ninth gen console, truth be told I don’t EVEN want to think that far ahead in gaming, I mean, this new gen is to soon for me as it is!

  • Spookyryu

    this is a complete failure

  • multibottler0cket

    Yes, all very interesting, but how many bits is it? That’s all that really matters.

  • James Smith

    Preferably i play on PC so the biggest problem that i have is the xbox has much better ‘exclusive’ games than the PS4 (namely Halo) which is a problem because if the xbox fails and is discontinued its likely that these games will also be discontinued.