In another thread, Squilliam offered his vision to the lessons Microsoft should learn from Nintendo in designing its next gen console. While well written, I think Squilliam had missed several important points and eventually got to the wrong conclusions.

Here is a more detailed analysis of the lessons to be learned: 

• Low price is more important than capable hardware: Both Ninty and Sony proved it very clearly: Inexpensive consoles sells much more than expensive ones. Microsoft must aim to a $250 introduction point for its main console and should cap the hardware investments to make sure it does not exceed that point.
• HD is done: Most people cannot see the difference between 720p and 1080p. Minimize the investments in greater graphical capabilities. Instead learn from Ninty and invest in new experiences that could appeal to families. Capping HD where it is today makes sense because anyway the studios are struggling with the cost of HD game productions.
• Don't disrupt your existing base: Sony's biggest mistake is letting its huge install base go by introducing an incompatible console - it made the PS2 owners feel that they are owning an obsolete console and were force to choose a new one, mostly not Sony's. Microsoft new console must not feel very new. The new Xbox must be a "360 Mark II". This means that not only it would run all of the 360 titles but also every new game for the "Mark II" will run also on the 360. There will be a way for the 360 owners to upgrade their existing HW to get all of the new Mark II experiences.
• New gaming experiences: Ninty showed us that to reach larger population you must create a social experience and for this you need the right accessories. The 360 game controller must be joined with additional accessories that will allow these new experiences. Microsoft may choose to copy's Ninty's controllers or may come up with a new idea. No matter what - Microsoft must create a new, intuitive and broadly compelling experience. There has to be a Wow factor here.
• Beyond games: Both Sony and Microsoft (with Marketplace and now Netflix) are proving that the console functionality can go beyond gaming. Streaming videos and DVRs seems like the next logical extensions of the console. The next extension is toward the on-line social experience - living-room to living-room video communication may become the next killer app for the console.
• On-line is huge: Microsoft proves it again and again with its Live service. Continue to push it hard. Downloadable media and games may make the DVD and large HDD obsolete. For people who want significant storage allow networking with the home PC to store Xbox downloadable content there. Learn from Apple and offer an AppStore that holds all of the titles. Learn from NetFlix and allow a subscription rental service for a fixed cost.
• Hardcore is a money maker: Not only that hardcore gaming is the majority of the 360 installed base, but it is also critical to Microsoft's financial success. Microsoft's business model is based on making money by collecting royalties from publishers. The hardcore gamers are a repeat buyers. The attach rate is approaching 9 already and may be around 15 when this gen is over. This is a huge asset and money maker for Microsoft and while coveting the casual gamers it must not seem to abandon the hardcore ones.

 With that in mind, this is how Microsoft's next console need to look like: 

 Thoughts?

damn, I was going to come in here expecting to say "another one of these threads"


but damn!

I don't think 3D will be a big deal, but eveyrthing else I agree with. Well, it would be nice anyway.

I think Microsoft wants to force everyone else out of the industry over making healthy profits but having other competitive players in the market... I could be wrong though.

What's the point buying a console if its games can be played on an older system?

"HD is done: Most people cannot see the difference between 720p and 1080p. Minimize the investments in greater graphical capabilities. Instead learn from Ninty and invest in new experiences that could appeal to families. Capping HD where it is today makes sense because anyway the studios are struggling with the cost of HD game productions."

LMAO, this is the most hilarious thing I have ever heard. First off, you are comparing HD to better HD. The Wii is 480P at best. Secondly, if you have a real TV then you can definitely tell the difference, if you can't then you are just blind.

Wow, what a load of crap. Microsoft is making a healthy profit from gaming. About $2B more than Sony (Microsoft $1B profit, Sony $1B lose). So perhaps Sony is the one that doesn't care about profits?

Anyway, how does this have to do anything with the thread?

Unlike Sony and Ninty Microsoft does not aim to make money from selling hardware. It is a software company.

Microsoft's optimial situation is to get its existing base to stay on its platform, continue to buy games and pay subscriptions without needing to upgrade the hardware.

 Once again this makes making a new system completely pointless and a waste of time. You need to learn really quickly that new game systems will always dwarf the previous ones. This is called technology progression and has been happening since the beginning of mankind. This will never change, EVER...

I am the only one who does not want 3D, I don't want it to seem as though somebody is cutting my throat out, I am very happy with just 2D screens

Good points, especially about focus on keeping user base and expansion beyond games.

Although I think running higher resolution HD and making the next xbox a true sequel rather than a MKII are necessities, systems not only have to compete with each other but with the ever improving PC as well. The problem with a Mark II system is that it not only limits graphics but also processing power. Compare a mark 2 system to the PCs that will be available in the later days of its life span and it's like comparing a SNES to a PS2, slap as big a graphics card and as much RAM as you want in a SNES it's still going to get its ass kicked because the CPU is incredibly inferior. The end result of this is that most of your hardcore audience will have jumped ship for the PC, not just because the games look graphically better but because processor capabilities will have limited the SNES further (difficulties in running 3D engines, storage space issues of carts verse DVDs, number of enemies on screen, AI of enemies, lack of destructible terrain, etc.)

Now I'm not saying that a Mark II system (GC to Wii) can't be fun but it certainly limits programing options. Dead Rising is the classic example, 360 version can run a hundred zombies on screen, the Wii version thus far is at a dozen. Over the next couple years these issues are going to become more and more apparent and while casuals probably won't care all that much they aren't buying a whole lot of games either.