Microsoft best positioned for next-gen hardware release, id CEO believes |
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| BY Sebastian Nordlund Aug. 24th, 2009 | More on: |
Todd Hollenshead, CEO of id Software, sat down with the VG247 crew during QuakeCon and responded to a number of questions about Quake Live, Rage, Doom 4 and what was particularly interesting, his thoughts on next-gen hardware. But before we go on with that, in case you missed it, I’ll grind your gears at this very moment with a killing blow to your eyes: open beta for Rage, not likely.
Hollenshead believes, roughly, that none of the major players in this business are planning on releasing any kind of next-gen console anytime soon. He states that the Xbox 360 will soon be facing its fifth Christmas holiday, which should by normal standards be one of its final years of existence when compared to console longevity in the past. But because of the well known world recession, companies like Microsoft, Sony and Nintendo aren’t taking any risks. If we further deepen ourselves on this and add Project Natal coming to the Xbox 360 and the motion controller Sony is releasing for the PS3 next spring to the equation, then it’s somewhat obvious to see that Microsoft nor Sony are ready to go “next-gen” yet, but rather expand on their current consoles with significant hardware updates.
“But somebody’s going to do it,” says Hollenshead. “The player who’s in the best position to do so is Microsoft, because I do think they’ve recouped a lot of the costs of their console.” The Xbox 360 was the first of the “next-gen” consoles to be released back then, which we today can evidently see gave Microsoft the advantage needed to surpass Sony and its PlayStation brand. It would make a whole lot of sense for them to continue down that path and effectively be the first to introduce the next generation of gaming, again. To this, Hollenshead added that he thinks Microsoft is “already planning the transition now, and they have their eye on the ball as to what it is, because I think they see that there are some weaknesses that they can exploit with what’s going on at Sony.”
August 25th, 2009
at 12:03 am
I actually think that pressure to come out with the next gen first will be on Nintendo. The Wii is looking really aged at this point. It lacks the capabilities to be really competitive with the Playstation and the Xbox, especially at its current price point.
The reasons that Microsoft may release their next system first are twofold: (1) They are in better financial straights than Sony–though because they have high profit margins on their computer software, not because the Xbox is very profitable, and (2) The Xbox is a notoriously unreliable piece of hardware. The costs of repairing them are really astronomical. Nevertheless, there are a lot of reasons for Microsoft to wait, besides the ones mentioned here. Most notably, they need to recoup more of their losses on the Xbox. The company’s profit margins have attenuated somewhat due to the large net Microsoft has cast as it seeks to diversify its production, including not only the Xbox but also Bing! and the Zune. As Microsoft delivers more reliable Xbox models, they stand to better position themselves by waiting a bit.
While the Xbox has been subsidized by Microsoft’s sales of computer software, Sony has suffered due to lackluster sales in its other divisions. This is one reason Sony waited for a total reworking of the Playstation 3 before dropping the price–they couldn’t afford it otherwise. The slim is optimized to produce the hardware at lowest cost.
Finally, its very premature to talk about the next generation, as the author of this post implied. But its not only the recession. These new products. Natal and the unnamed Sony wand were in development prior to the crisis. The greater reason is due to hardware limitations. Look at computer hardware. Nvidia and ATI have been using the same general chipsets for some time. The hardware is not there for a next gen. In terms of graphical presentation, a new console released in the next year or two would only be marginally better than the current generation, unless it was much, much more expensive. No dice.
Nintendo will move first. The Wii has hit a point of market saturation. While software sales for the platform are still robust, this may not be in the case in a few years. Nintendo has attracted the casual gaming crowd. While this group is certainly bigger, it is more difficult to maintain sales with them over time as they lack the interest that hardcore gamers have. This is why the Wii has the lowest ratio of software to hardware sales. The Wiis end up collecting dust in the closet after the novelty wears off. Sony and Microsoft cater to the hardcore crowd, certainly smaller, but more consistent in their use of the product over time and more likely to purchase software. And while there are trade-offs in focusing on each market, Nintendo has ended up in a bit of bind. That is, in order to maintain software sales, they need to continually attract new consumers as a good portion of their existing base loses interest (again, look to the ratio of software to hardware sales). It cannot do this with at the current price point. And as Microsoft and Sony offer their own motion-based interfaces, Nintendo’s single advantage may begin to erode. I wouldn’t be surprised if a Wii HD with built in motion plus and much better internet capabilities were announced at E3 next year.
August 25th, 2009
at 9:15 am
Next year is way too soon for any company to be bringing or even mentioning their next platform beyond closed doors.
I very much agree that a next gen console won’t have the same vast improvements in graphical abilities beyond that of the PS3/360. You’re right that the Wii has the most to gain from a hardware refresh, but I don’t think it’s coming as soon as next year. I think if anything came from Nintendo at E3 hardware-wise it would be a new DS and not a Wii, but it’s all speculation at this point.
August 26th, 2009
at 12:26 pm
@JMA trust me the Wii is the Gamebody of our generation, that shit is NEVER going to die. Ninty is going to milk it until its anorexic.