1 Project Scorpio Limitations2 Microsoft’s Strategy
According, to Mat Piscatella from the NPD Group, Xbox One sales will outpace Sony’s PlayStation 4 in the US. This will be driver by Project Scorpio: “I remain bullish on the Scorpio in the US market, particularly in the launch year. I think Scorpio has the potential to push Xbox One sales ahead of the PS4 in the US in 2017. Adoption among the core gaming audience could be significant,” he said. “And, while this is a niche audience to target, it’s the niche which is necessary to put the Scorpio on the path for longer term mass market adoption.” Sony has dominated the market since the launch of the PlayStation 4. Microsoft does not publish specific sales figures for global units sold, but it is thought the Xbox One is far behind the PS4. However, after the Xbox One S was launched, the company claimed first position in US sales between July and December 2016. Since then normal service as resumed and the PS4 remains the consumer market’s first choice. So, there is precedent in place to suggest Project Scorpio will spur Xbox One sales, but recent history also suggests the success could be short lived.
Project Scorpio Limitations
Ok, here’s the thing, and we’re heading into opinion territory now. I have said for a long-time that Microsoft will not defeat Sony in the 8th generation console market (globally). That ship as simply sailed due to the huge sales the PlayStation 4 enjoyed early on and the respectable figures it achieves now. We can argue about whether Project Scorpio is current gen or next gen, but either way, it is being grouped with the Xbox One family. I am hugely impressed by what I know about the console so far, but I don’t think it will be a huge seller. More importantly, I don’t believe Microsoft thinks it will sell in large quantities. The company has said it is targeting developers with Project Scorpio. The device showcases the current full potential of console gaming, but it will only appeal to hardcore gamers. I think casual gamers will be put off by the following factors: Market Proliferation: The Xbox One was launched late 2013 and the Xbox One S dropped last year. By Project Scorpio’s launch, that will be three consoles from the same range in under five years. Casual gamers, the kind who play FIFA/Madden and Call of Duty every winter and then pick up the odd triple A game, do not want to buy three consoles in five years. Cost: Naturally, this leads from the last point. Project Scorpio will certainly not be priced modestly. Expect a price tag of around $500 and likely over. Again, the average consumer does not want to drop hundreds of dollars every couple of years, unless they are hardcore gamers or are buying a smartphone. The 4K divide: A serious gamer has likely already made the jump to a 4K screen for PC gaming. Likewise, someone who consumes a lot of media like movies and TV may have already bought a 4K display. The technology is expanding rapidly, becoming more affordable, and popular. That said, a great many people still use 1080p Full HD displays and are unlikely to see Scorpio as a compelling enough reason to upgrade. Clearly the biggest selling point of Project Scorpio is its native 4K gaming and streaming capabilities. I think these are admittedly jumps in console technology, but will be lost on a lot of customers. Increased Performance: If we remove the 4K element from Project Scorpio, all that is left is the promise of increased performance and better graphics, even at 1080p. Now, this jump in quality could be massive and transform current Xbox One titles, or it may not. Either way, I am not sure consumers want to buy into a new device based on this.
Microsoft’s Strategy
The most important thing to point out is that Microsoft has never really said it expects Project Scorpio to meet the PlayStation 4 head on and runaway with the market. The company instead seems to be playing a different game where the total number of consoles sold is unimportant. A statement like that clearly needs clarification. The console market is a war, each generation is fought, before it is reset and the market opens again. For example, Sony dominated with the PlayStation 2, but Nintendo fought back with the Wii. Fast forward a generation and Nintendo is floundering while Sony is back on top. The console market is changing. How many consoles a company sells is now the battle, but the war is won by other means. Microsoft can see that the most important thing is how many games it sells and how many subscribers it has on Xbox Live. In between, other factors like streaming services (BEAM), and media consumption on a console are increasing in importance. Of course, if a console completely tanks, a la the Wii U, then it has little chance of winning the war because no one will buy games or subscribe to social gaming networks. However, the Xbox One has not been tanking by any means, and it is very unlikely that Project Scorpio will. I have written before that Microsoft’s original plans for the Xbox One were largely sound. The company’s mistake was trying to shove them down our throats. Consumers hate something that is forced upon them. Microsoft is still pursuing many of those goals, but a long game approach is now being employed. Project Scorpio will be the latest signpost in a journey where the company is trying to change how consoles are used. Sony may win the battle, but Microsoft’s is taking a lead in the war.
