The budget-friendly console speaks to Microsoft's strategy for the next generation of gaming. GameDaily spoke to a pair of analysts about the announcement and what it means for the upcoming console transition.
Following yesterday's announcement of the Xbox Series S, Microsoft has officially unveiled the price and release date of its new flagship console, the Xbox Series X. It will release on November 10, the same day as the Series S, and will retail for $499. This price is in line with what many analysts expected, including Ampere Analysis' Piers Harding-Rolls, who told GameDaily as much when he talked to us yesterday.
Now that the game of pricing chicken is over, the ball is in Sony's court. It will be telling to see how and when it responds to the Series X announcement.
Today, following a leak from this weekend, Microsoft officially unveiled the Xbox Series S console along with a release date: November 10. The Series S is a smaller, digital-only accompaniment to the flagship Series X that is also set to launch in November. It’s also a less powerful platform, but still boasts some nifty next-gen tech, like a quick SSD, ray tracing, and support for 1440p, 120 FPS gaming. The icing on the cake, though, is the very attractive $299 (£249.99) price point.
While the hardware specs for the Series S are less impressive than the Series X, Microsoft’s aim for the budget platform is to introduce new players into its ecosystem. After all, the Series S will make an ideal streaming machine for Xbox Game Pass and xCloud titles. And at $300, it’s a terrific option for budget-minded consumers.
For Piers Harding-Rolls, analyst at Ampere Analysis, the price point of the Series S’ points to a handful of imminent business moves for Microsoft as we near the advent of the next generation of consoles.
“At $299/£249, it is cheaper than the Xbox One X, which is confirmation that it will be dropped,” Harding-Rolls told GameDaily. “This will result in more prospective late adopter Xbox One buyers shifting their spend to Xbox Series S instead, which will itself result in the generational transition happening more rapidly for Xbox.”
When the Series S leaked this weekend, it was accompanied by a rumored $499 price for the Series X, which is where Harding-Rolls expects that console to launch. For him, the most notable aspect of this announcement for him is that Microsoft is front-loading the new generation with multiple platform models.
“Microsoft is loading all its competitive plays at the start of the cycle. Initial sales momentum is incredibly important in the console market, as once it is established, it is easier to maintain and compete, so from Microsoft’s perspective I think it’s the right thing to do.”
Not all analysts are impressed with Microsoft’s announcement, though. For example, David Cole of DFC Intelligence said that the company’s rollout of next-gen information has been less than ideal.
“I think Microsoft has created a confusing mess,” Cole told GameDaily. “They let leaks take over the official story, and right now the professionals are confused, let alone consumers.”
For Cole, the price-to-performance ratio of the Series S is a bit difficult to predict. Historically, first adopters of new hardware are die-hard fans and core consumers, for whom price isn’t necessarily a big part of the purchasing decision--they’ll buy the console no matter what the cost. With the Series S, Microsoft has muddied these waters a bit.
“Microsoft was pitching the Xbox Series X as the most powerful system ever, and all of a sudden we have this neutered Series S option at a lower price,” Cole said. “The thing is consumers don't want to settle for second-best, even at a steep discount. This is especially true for the early adopter consumer that will buy systems in the first year.”
In terms of what this means for Microsoft’s competition, Harding-Rolls and Ampere Analysis project that Sony’s PlayStation ecosystem will benefit greatly from this generation’s strong performance. The momentum, Harding-Rolls said, should carry over into the next generation; the PlayStation 5 is predicted to cross 67 million users by 2024.
Cole echoed the prediction that the PlayStation 5 will move far more units than the Series X, and estimates that the Series S announcement has put Sony in a stronger position for the next generation than it already was.
“This really confirms how Microsoft, in its focus on a long-term digital strategy, has really given Sony and the PlayStation 5 a big advantage when it comes to hardware sales for the upcoming generation,” he explained. “This really confuses the mix, but I think mainly to Microsoft's detriment. This is why, largely based on the Series S rumors, the recent DFC Intelligence forecasts have the PlayStation 5 outselling Xbox Series X by a two-to-one margin.”
But selling units isn’t Microsoft’s modus operandi; it’s growing the Game Pass--and xCloud--audience that has become the goal. So far, the company has been incredibly successful in this regard, and the next-gen platforms are assuredly going to lean into this “brand ecosystem” strategy. Meanwhile, Sony is banking on it’s strong stable of first-party studios to sell hardware.
There’s also the PC space to consider. Last week, Nvidia announced its 30 Series graphics cards, and they represent the most substantial generational leap in some time. The company has also struck an incredibly attractive $499 price point for its entry-level RTX 3070 product, which some are calling an absolute game-changer.
All told, Microsoft and Sony’s incredibly different strategies, and Nvidia’s suddenly-accessible hardware, speak to a games industry that is more varied than ever before. This console transition is looking like the most exciting one in a good while, and consumers will have no shortage of options this fall.
For more stories like this one delivered straight to your inbox, please subscribe to the GameDailyBiz Digest!/* =$comments; */?>