The race to offer console-quality games from anywhere over the internet has reasonably made gamers wonder whether dedicated consoles are going the way of the dodo. If you can just stream a game without shelling out $300 or more on hardware, why bother? But Xbox head Phil Spencer says that Microsoft will continue releasing new hardware beyond the Xbox Series X and Xbox Series S.
Flexibility of choice —
Internet speeds and latency continue to improve, but physical consoles still guarantee a low latency, stutter-free experience. And digital cloud services could shut down at any moment, leaving you out of all the games you paid for. Look no further than pre-order delays for the Series X for evidence that there's still demand for hardware. Gamers are probably the last group that will ditch physical media altogether — Microsoft also has to consider that its competitor Sony is still making hardware.
Streaming is another way to play for convenience but not as a replacement for console hardware. Playing on the go when you're not at home is nice, and streaming will surely open up the market to many more casual gamers who don't want to invest in hardware.
Software has always been where console makers profit, however, and Microsoft likely hopes it can grow the Xbox business further by turning it into a Netflix-like service that keeps people subscribing for years to come.
Look no further than Disney+ as evidence of Microsoft's model with Game Pass subscription — that service rocketed to more than 60 million subscribers on the back of old movies and TV shows. Microsoft is another company that has a large backlog of popular entertainment. So long as its cost to develop new games is lower than the revenue it brings in from subscribers, it's golden.
Xbox goes iPhone —
What's more interesting for the future of the console is the potential for Microsoft to innovate on the hardware more rapidly and release new consoles at a faster cadence like Apple does with the iPhone. The Xbox All Access financing plan offers an Xbox Series S and Game Pass for $24.99 per month, and it's not unreasonable to expect a trade-up program akin to what cell phone providers offer.
If more people are in the ecosystem and paying a monthly subscription fee, Microsoft doesn't need to make as much money off each individual customer to create a sizeable business.
Constantly updating the hardware to keep up with graphics capabilities and storage would be something truly new and exciting for gamers, and help Microsoft stand out from Sony. If this is the strategy it's planning, the biggest question becomes, what the hell will Microsoft do about its horrible Xbox naming conventions?
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