Xbox Throws the Battle, Wins the War🕊️🎮
Microsoft made clear their intentions of focusing away from physical consoles in the future👾, Oculus getting ready for a new device release👓 and some COVID econ.💸
Boo Atoms, Yay Bits
On Thursday last week, Microsoft had a showcase for several games coming to Xbox at the end of this year and, when combined with last week’s xCloud announcement, a lot of pieces in the puzzle are starting to fall into place. And the final image is panning out to be very different from Sony’s.
I don’t think I’m alone in saying I was expecting this display from Microsoft to be a tour de force in terms of announced titles that would propel the Xbox Series X in front of Sony’s PS5 in the eye of the public. This couldn’t have been further from reality. Instead, the powers at be went as far as promising that gamers will not need to buy the Series X in order to play ‘Xbox Game Studios titles we release in the next couple of years’ 😧
The time everyone imagined would be invested in flaunting the Xbox Series X superiority in front of the competition and God himself was instead invested in pushing last week’s news: the Xbox Game Pass. All games developed by Microsoft Studios will be available on the subscription service on day one after launch —same as on the Xbox Series X— and, between this and the fact that subscribers will have the possibility to cloud stream the entire library via xCloud there really is no reason to buy the next Xbox. This would have been a tough sell in a Ballmer-led Microsoft but in the Nadella-led version of today, it makes all the sense in the world.
Times have shifted since the last generation of consoles was launched seven years ago, with a steadily increasing profit share coming from game services instead of the hardware itself even if you’re a console manufacturer. Microsoft have been in a good position to observe this transition with their Game Pass product and were quick —and right— to realize that they can reach a lot more consumers with an instantly-accessible and deliverable service than with a physical block made of plastic and silicon. When it comes to distribution and accessibility, Bits > Atoms.
Profitability in gaming in the future will, no doubt, continue to come increasingly from services in the short term while cloud streaming will be the long-term play, but there’s still no way around actually displaying the information —i.e. the gameplay image— to the player. Microsoft’s solve for this is three-pronged: 1)PCs, 2)Mixed Reality headsets where they’ve been pretty active on the software side and, potentially, 3) Project ‘Lockhart’, the cheaper, less powerful version of the Xbox Series X that’s expected to launch at the end of the year together with the flagship console. Smart 👏
All bases are covered you’d say. All except for one. Perhaps the most important one if you want to launch a service that retains consumers for long. Exclusive games have been Microsoft’s Achilles’ heel in past years and, while they’re looking at fixing the issue with 3rd party studio acquisitions like Ninja Theory, developing a new AAA franchise that ends up being a ‘console-seller’ has traditionally taken in excess of 6 years. If Xbox can plug this hole in their ship soon enough, they might come up on top once again in the 5+ year time interval when the shift away from physical consoles will accentuate. This is a long play that aims to end all console wars and transform them into digital wars and killing the idea there will even be a next-next-gen console seven years before its supposed to release.
I’m here talking about a games showcase but I’m yet to mention even one title from the hour-long presentation. This is because most of them were either iteration on past franchises or just straight-out bland. The one product that stood out visually was ‘Everwild’, and the environment for the next ‘Fable’ title looks like Fable, so that’s good news.
Plug me in, Coach
A render of the design of the ‘Oculus Quest 2’ and some real-life photos of the product leaked last week and it’s rumored to be launched as early as September 15th. It’s at this point that I have to tell you that I can neither confirm nor deny that I will be working on a project for this platform in the near future…
I can’t really give you details on the specs of the device or its market positioning because, well, I don’t know them. There are a lot of improvements to the original design that I can think of off the top of my head, but this is pure speculation.
The top of the list would be made up of improved computing power and extended battery life. These two items go in lock and step for any mobile device, and computing performance is tied to the ever-slowing Moore’s Law. But hey, this is a wishlist so one can dream..
Further down the list would be improvements in hand tracking. While the Oculus Rift S, with its base stations spread around the space it’s used in, does a fantastic job at translating the player’s real-life hand movements inside the virtual space, the Quest fairs much worse when your hands are behind the device. From the images above, I see the cameras in charge of doing the tracking being placed more towards the edge of the device, so this could be a realistic goal.
While the combination of cameras and AI does a good job at tracking the surrounding environment, adding a LiDAR system to the sensor array will make the experience a lot better for consumers and unlock a host of possibilities for developers. Since this technology just devours battery life, it wouldn’t be viable to keep it always on, but it would definitely be helpful in 10-30s bursts in some niche situations.
In a realm bordering fantasy is an item I mentioned in my 20-year prediction article at the beginning of the year, a fusion between VR and AR. The cameras shown in the visuals above are sure to be used for inside-out tracking like they are on the current model, but what if they could do more? What if they could feed the real world to you inside the device? Considering the increase in volume, this kind of AR device will be far more potent compared to the thin-framed models of AR Glasses we have now.
As I’ve said before, the main thing that made the Quest as successful as it is compared to competitors, apart from ease of use, was pricing. With the cheaper predecessor to the Quest, the Oculus Go, being pulled from production by the company, it will be interesting to see if Oculus will try/need to cut some corners in any area in order to bridge the gap between the $199 and $399 price points. Admittedly, not doing so could just mean that the Quest has either met or exceeded sales expectations over the past year.
The Stuff That Makes the World Go ‘Round
Some companies announced quarterly earnings last week, so here’s the short, non-boring version of the first strongly-COVID-affected quarter for US companies.
Between Teams, Office, and Xbox gaming, all is good in Microsoft land during pandemic times, they made $11B in net income.
Twitter grew 34% year-over-year in monetizable daily active users —a metric used by them alone— for a total of 186M people using the service every day but Ads revenue is down 23% YoY; the stock price rose slightly on the announcement, presumably because stockholders imagined all these new users will monetize well once that subscription plan we talked about in past weeks is out and about.
Snapchat increased revenues by 17% compared to last year and daily active user numbers are almost stagnant while they’re still seeing a net loss of $238M compared to $229M over the same period in 2019. It looks like people are staying at home but also off of Snapchat. While at the beginning of the quarantine we were all on social media more, as the situation became the status quo people had to go back to being productive. A small bump in activity compared to pre-quarantine still remained, —easy to attribute this to the time gained not commuting— but nothing compared to the initial figures.
Baseball is back in the US and while the sport continues to be uninteresting outside the few countries, the broadcaster is upping their game with Unreal Engine-generated virtual fans, virtually cheering for the folks watching at home. While some kinks still need to be ironed out from the first version, this could get a lot better with little effort invested in it and other IRL industries are recognizing this as we speak. While the experience will be much improved and less distracting than an empty stadium for the fans at home, the silence will remain deafening for the athletes in the field. Where are the AR Glasses when you need them? 👓📺
Spotify launched video support for podcasts in their desktop and mobile APPs, and it works beautifully. You can see the video feed regardless if you’re a Spotify subscriber or not and the sync and switch between video+audio to audio-only is as seamless as can be when you lock a device or multitask to another application. In the past, many podcast creators also made a video version of their work but had to resort to publishing it on YouTube or Twitch. Not anymore. Spotify is locking everyone in and throwing away the key. As more creators will upload the video to its service, listeners will be trained to move their viewing habits to the platform, encouraging creators to move away from the video-only platforms they use today. Those who’ve already built a strong fan base on YouTube will continue to engage with them, of course, but new podcasters will not bother with it in the future📺📻
New emojis are coming to iOS this year, amongst them a pair of lungs (too soon?), a boomerang, the Italian hand (you know what I’m saying here), the now-extinct dodo bird, bubble tea and a photorealistic coin inscribed with ‘The Crazy Ones’, probably a nudge to the ‘Think Different’ ad campaign😀
The industry reviews for the Polestar 2 electric car coming from Volvo’s sister brand, are raving across the board. The tech is very easy to use even for entry-level consumers past a certain age and the software is speedy since it’s Android Automotive OS, none of that Android Auto smartphone-streaming BS 🤖🚗
This camera tech is doing a good job at keeping me hooked until 2021🎥
Next time someone complains of slow internet speeds send them this video of gamers building network infrastructure📡📡
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