Microsoft Corp is decided to make a touch this week with the eagerly awaited unveiling of its new Xbox game console, eight years after the last version, because it seeks a bigger share of the $65 billion a year global computer gaming industry.
But the small device faces some big competition from the PlayStation 4 by Sony Corp and the Wii U by Nintendo Co Ltd in a shifting market.
Gamers are gravitating to online play – suggesting the hey-day of console games are over – while Microsoft wants its sleek new toy to finally cross the bridge to the mainstream and become the family’s entertainment center.
“Core gamers are very hungry for a brand new machine however the difference between 2005 and now could be that the stakes are such a lot higher,” said Ryan McCaffrey, executive editor at entertainment website IGN.com, reminiscent of Microsoft’s last Xbox release.
“The full Xbox experiment from Microsoft was for it to be the center-piece of your lounge.”
To that end, industry-watchers predict a raft of improvements from the hot Xbox, when Microsoft unveils it at its Redmond, Washington, headquarters on Tuesday, from closer integration with the television and link-ups with mobile devices to access to new or even exclusive content.
Console gaming still takes the lion’s share of a growing gaming market – about 42 percent of the $65 billion world market, based on Microsoft. But playing games on smartphones and tablets, or as an offshoot to online social networks, is gaining ground fast.
Console sales were in decline for the last four years, chiefly by reason of aging devices, however the first of the recent generation of machines has not reignited the sphere.
Nintendo’s Wii U, launched in November, had sold only 3.45 million units throughout the end of March, well below the company’s initial forecast of five.5 million. Hopes for Sony’s PS4, teased in March, are low key.
“The following wave crest isn’t as high because the previous one,” said Lewis Ward, research manager at International Data Corp, who calculates that about 250 million Xbox 360 , Sony PlayStation 3 and Nintendo Wii units were sold between 2005 and 2012.
“I do think that consoles as a product category have peaked and a better gen devices won’t match those totals,” he said.
The Xbox itself just isn’t a key financial factor for the world’s largest software maker. Its Entertainment & Devices unit is decided to interrupt $10 billion in sales for the primary time this year, but that’s half the sales of its Windows unit, and plenty less profitable, averaging below 15 percent margin in comparison to 60 percent or higher for Windows or Office.
The company has greater than 46 million members who join its online gaming and digital entertainment service Xbox Live, but that’s still a fragment of the folks who pay for its software.
“This (the brand new Xbox) is of huge importance to Microsoft. It’s a piece of a bigger war for the buyer that it’s battling. They need to be fully integrated with the patron whether it’s within the lounge or mobile,” said P.J. McNealy, CEO and founding father of Digital World Research. “Arguably the battle against both 0 Apple 0 and 1 Google 1 for dominating a consumer’s time share more so than taking up Sony and Nintendo directly.”
That means Microsoft would be aiming for lots markets simultaneously, from the core and casual gamer to the television watcher and music fan.
To do this, industry watchers expect Microsoft to integrate the hot Xbox way more closely to the television and cable or satellite box, perhaps allowing users to switch channel or buy movies with a wave of the hand through its motion-control 2 Kinect 2 sensor.
They also expect to listen to more about SmartGlass, Microsoft’s app that allows you to link an Xbox to a tablet or smartphone.
Users can already get 3 Netflix 3 in the course of the Xbox, and Microsoft recently started its own studio to provide exclusive content, meaning the brand new device is a gateway to far more than games.
“i feel they’ll try and have their cake and eat it too – they’ll attempt to get casual people for entertainment while keeping the hardcore gamers interested,” said McCaffrey at IGN.com. “They need their console on forever, whether it is a mom watching Amazon video, the son playing a game and the dad watching (Major League Baseball) TV on another app – that’s their goal.”
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