Microsoft's big bet - The Xbox One X

Yesterday Microsoft took the stage at their annual E3 Press Conference and announced their new gaming console, the Xbox One X.

If you haven't been keeping up with gaming hardware as of late, Sony and Microsoft have been cranking out iterations of their latest consoles much faster than they have in the past. Last year Sony released an update to the PS4 called the PS4 Pro. That system has the ability to run some games at 4k resolution, but does not have a UHD BluRay player and was only a relatively minor graphical upgrade the the original PS4. In comparison, the new Xbox promises to run all their games in 4K, has superior graphical hardware, and has an UHD BluRay player built in. 

Microsoft showed off a bunch of games at their conference, some that were Xbox exclusives, and a handful of big third party games. All of the games were running in 4k resolution - this was a theme that Microsoft really stressed. The game that best showed off the promise of 4K in my opinion was Anthem, a new third person shooter from EA that borrows a lot of good ideas from looter shooters that have come out in the past few years:

Microsoft is making a big bet that their users either own a 4k television, or are going to buy one in the near future, and will want a dedicated gaming machine that can run games in 4k. They are also taking a risk by pricing the Xbox One X at $499. The Playstation 4 Pro is currently priced at $399 and also can run games in 4K, if not quite as well. While it may not have the same impressive internals as the One X, the $100 price difference is a huge deal for moms and dads who are looking to buy their child a new console this Christmas. Sony is set to hold their press conference at this year's E3 later today, and right now executives are probably arguing about whether or not they want to drop the price of their 4k capable system before the holiday season.

This generation of Playstation devices are currently outselling current Xbox devices by a rate of 2-to-1. You could argue that putting out a new, expensive system that is catering to a market that does not really exist yet is just doubling down on what was not working in the first place. I do have to tip my cap to Microsoft for making a machine that is looking towards the future. The prices of 4k televisions have been dramatically dropping, a couple of years ago you would have a hard time finding a decent 4k set for less than a couple thousand dollars, now you can find highly rated UHD televisions for less than $600. Their will eventually be a market for 4K gaming machines, and it may not be that far away.

The best situation that Microsoft can hope for is that their system remains the most powerful 4k gaming machine on the market as people start to upgrade from their old 1080P displays. The worst case scenario here is that Sony continues to outsell them with older consoles, and releases an more powerful Playstation when they feel enough people have bought into 4k. I think Sony got off to a hot start in this console generation by knowing exactly how much people are willing to pay for a new video game machine - $399. If this new trend of iterative console updates continue, it wouldn't shock me at all if there is a new Playstation out in the next two or three years that is both less expensive and more powerful than the X Box One X.

A lot of disruption is happening to the gaming market. With the rise of mobile gaming, traditional companies like Nintendo have tried to make innovations within their own consoles to stay relevant. Their new console, the Nintendo Switch, allows people to play games both at home, and on the go, and is priced at that golden $299 number. The Switch is the fastest selling console in the history of Nintendo, and did so despite dealing with supply chain issues. The Switch is not a graphical powerhouse. It does not run games in 4K. It does not have a UHD BluRay player. It does, however, offer people a new way to play their games. Nintendo saw that more-and-more people were starting to play games on the go, and released a killer product to cater to that growing market at a reasonable price. 

I worry that the Xbox One X is a device without an audience. Sure, their always be people who are willing to buy a new Xbox whenever it launches because they are already fans of the platform and want the newest console to play first party Microsoft games on. The problem Microsoft will have to overcome is getting new buyers to pick the One X over buying an even more capable gaming PC, the more popular Playstation console, or the more innovative Switch. Microsoft is really doubling down on the promise of superior tech. The chips are on the table, now we all have to wait for November 7th, when the Xbox One X releases, to see if their gamble pays off.