Why the Xbox S series is so cheap, and how Microsoft could dominate the next generation of games You may already have the really surprising ...
Why the Xbox S series is so cheap, and how Microsoft could dominate the next generation of games
You may already have the really surprising news that Microsoft has just made public, if not let me tell you about it:
The Xbox S series will be sold for $299!
I would say that the S series is the most important piece of Microsoft's gaming hardware to date. Why is this so? To understand, we'll have to take a closer look at its performance and the implications of its price.
With only 4 teraflops of GPU performance, the Xbox S series is three times more powerful than the X series. In fact, it is even less powerful than the latest generation of Xbox One X (their naming convention is zero), which is at a decent 6 teraflops.
But what people may not understand is the genius of the S series. The X-Series and the S-Series, play the SAME games at the SAME FPS. The only real difference between the two units will be the resolution of the target.
The X series of the Xbox aims to get 4k 60FPS and the S series will get 1440P 60FPS.
And I'll tell you right away that's not a big difference when it comes to sitting on your couch and enjoying a game. Don't forget that, unlike the latest generation, the S-Series will support 120 FPS, it will allow full shelf tracking and have super fast storage.
But you could say that they don't have the same bandwidth storage size as the X-Series.
And I'm here to tell you that it doesn't matter. Games at 1440p will have much smaller resources and game sizes than their 4k counterparts. That means they don't need the same bandwidth or storage requirements.
Overall, people will have next generation games at an incredible price, and especially with the current situation with Covid-19 and rising unemployment rates, this system will be the device to get for the vacations.
This is a total win for Microsoft.
One of the most important aspects is the idea that these new Xboxes are not really in direct competition with the PlayStation 5. Microsoft is changing the rules of the game rather than opposing Sony.
Why is that?
Because I think the S series will serve to position Microsoft to move away from console sales.
First of all, let's talk about the game console sector.
People forget that console sales mean nothing in terms of profit. In fact, both Microsoft and Sony are going to lose money on their console sales. They make their profit from the sale of software (games).
So think of it this way: Sony will produce these amazing exclusive games like Uncharted or The Last of Us, or Horizon Zero Dawn or God of War over the next few years. Each game will cost about $60-70, depending on how much it costs.
They're counting on the fact that you want these exclusive games for you to buy their consoles. Then, when you get to the console, the profits you make from these games are split between the game studios, the publishers and, of course, Sony or Microsoft.
So the goal of gaming is to sell as many games as possible, and Xbox, PlayStation and Nintendo compete with each other for your investment in their consoles.
But Microsoft is moving away from this and will be catalyzed by the S-Series. The S Series is a great console, it's cheap. It's a solid recipe for a ton of sales.
And when consumers get a shiny new Xbox, what will they do? They'll usually sign up for Xbox Live to play online with people.
And that's when Microsoft will tell them, "Hey, pay a little bit more and you'll have access to hundreds of games.
That's right, Xbox will be the introduction for everyone to Game Pass, Microsoft's new service that will allow gamers to play games for $10 to $15 a month.
And given their vast library of games, it's a really good deal for the vast library of games you'll have access to and the new exclusives that will be added the day they are released.
In addition, you always have the possibility to install or stream games.
It doesn't make sense because you can install them on your Xbox or PC and enjoy the 4k experience of Halo, but then when you're at work or school (and have a proper connection), you can always stream your games to your laptop or phone.
The subscription model is also more appealing for people who live on a day-to-day basis.
While they will pay more in the long run, in the short run they won't have to pay $70 for a new game.
This means that Microsoft gets a steady revenue stream to develop games that work on any platform and are easy to use. It's basically the Netflix of games.
More importantly, it no longer needs to compete with the PlayStation. Instead, it will compete with Google Stadia and Nvidia GeForce Now, but thanks to Microsoft's experience with cloud technologies and game development, it can deliver a good user experience.
We'll have to wait and see what happens, but for now, the Xbox is in an intermediate situation where it can still compete with the PlayStation by offering a more attractive price and selling the games normally, but also by offering the Game Pass as a new subscription service for gamers.
But it really seems that Microsoft is moving further and further away from the traditional console business model towards subscription services and that the S series will be the Trojan horse to penetrate millions of homes.