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Jesse Divnich, industry analyst for EEDAR has weighed in on Xbox One’s reveal by providing his thought on the new console in an industry letter.
We’ve posted his letter in full below and will clean things up a bit when we get time.
Overall Thoughts
The Xbox One is an evolutionary step in the entertainment consumption experience. Microsoft has been battling for control of the living room since the launch of the original Xbox in 2001 and has since proven they’ve seen eye-to-eye with how their audience consumes entertainment content. The Xbox One stands to provide the total living room experience for the entire family, while at the same time not alienating the core gaming consumer or the core gaming experience. It’s an impressive leap forward and one that will resonate well with the North American audience.
2013 Launch
We expect the Xbox One and the PlayStation 4 to launch relatively close to each other (likely holiday 2013). We believe this is a win-win for the industry and traditional console manufacturers. While competition often results in a winner and loser, we believe launch timing relatively close to each other will provide a benefit to the overall traditional home come market. The two marketing campaigns combined will act as an amplifier to why traditional home gaming is still relevant and an overall deeper immersive experience compared to other gaming technologies. While the market has witnessed some stumbling in the traditional space over the last 12 months, we believe confidence in traditional HD gaming will rise to pre-2010 hypes coming out of the 2013 holiday season.
First-Party Titles
Our communication with Microsoft has indicated that they plan on investing more resources into first-party content than they’ve ever had before. This is important. It’s clear that Microsoft is trying to deliver the total entertainment experience to consumers across all demographics and all entertainment verticals, but it’s important that Microsoft not forget the core gaming consumer. Microsoft’s dedication to continue to support those core gamers with exclusive new intellectual properties is a reassurance to all us gamers that the company comprehends the important role we play in driving the Xbox One’s success.
Integrated Television Experience
We were most impressed with the Xbox One ability to integrate the television cable experience into the console. It works and we didn’t notice any lag time between communication with the Xbox One, the cable boxes, and the television. We view Xbox One’s television integration as a large opportunity for Microsoft and we were specifically excited about the application market that could boom from this integration. Being able to integrate custom applications, social communication overlays, and an overall sense of providing a personal experience as a huge win for Microsoft.
At first we imagine that Microsoft will tightly control the applications that are available for integration into the television experience, but long-term we view this as a huge opportunity for third-party developers and could become a large, alternate revenue stream for Microsoft and third-party developers.
Second Screen Experience
The second screen experience is here to stay and Microsoft’s Xbox One has embraced the fact that millions of consumers are actively searching the web, watching videos, and communicating with friends while consuming primary entertainment content on their television. While Microsoft is still building their install base on their own second screen devices, the fact that they haven’t ignored the popularity of the Android and iOS is a clear sign that Microsoft “gets” the consumer and their openness to work on other non-Microsoft devices is a humbling.
Kinect with Every Device
We’ve previously been skeptical of the motion-based devices and their ability to drive long-term usage. Mostly, they’ve been fads that have come and go. We believe the inclusion of the Kinect into every Xbox One platform as a positive, even if not all consumer utilize it. We were impressed with the Kinect’s upgrades and its ability to quickly identify people and link them to their online profiles. For less tech-savvy consumers, this helps remove friction barriers. The Kinect’s upgrades are as expected. Better facial recognition, a wider view, and digit identification is what we would expect from a next-generation Kinect. How developers chose to integrate this into the gaming experience will be the ultimate determination of the Kinect’s role in the gaming experience. For casual gaming experience, we continue to expect large usage rates.
Microsoft vs. Sony
It’s always difficult to determine winners and losers off of highly choreographed presentations, but from other experiences it is too close of a call to say one presentation was better than the other. From EEDAR’s view point, both were successful in demonstrating their platform’s core experience and we believe that both Microsoft and Sony will realize market success at launch and through 2017. It’s too early to predict who will have a larger market share, but we are confident in saying that both will be profitable and viable platforms for third-party developers.
Third-Parties
Third-party publishers have been shy with new technology. They have to be, especially with new platforms launching every six months across the multiple emerging and established verticals. The risk adverse are likely to take a wait and see approach before going all-in with the Xbox One and PlayStation 4. EEDAR advises otherwise. We have no reservations on the potential success of both Microsoft and Sony’s next-generation platforms and the third-parties that chose to support these platforms early will undoubtedly succeed in the market. In most cases we do advise clients to be risk adverse with unproven technologies, but in the case of the Xbox One and the PlayStation 4, we have made full recommendations to publishers to support these platforms with the best AAA content as early as possible.
