CAN MI­CROSOFT TURN THINGS AROUND FOR XBOX ONE?

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News that UK sales of Xbox One had surged 96 per cent in the week of Ti­tan­fall’s re­lease, with seven out of ev­ery ten con­soles sold along­side Respawn’s mul­ti­player shooter, should have set cham­pagne corks pop­ping in Mi­crosoft’s Red­mond HQ. Any sug­ges­tion that this was the turn­ing point for Xbox One’s for­tunes, how­ever, was quickly shot down by news that UK sales of PS4 had risen by 72 per cent in the same seven-day pe­riod. Yet Sony’s boost was not driven by the long-awaited ar­rival of a plat­form-exclusive game re­lease – that would come a week later, when In­fa­mous: Sec­ond Son saw hard­ware sales more than dou­ble – but by re­tail­ers fi­nally hav­ing enough stock to meet de­mand. Sony can’t make its new con­sole fast enough, while Mi­crosoft’s lies read­ily avail­able on store shelves.

Mi­crosoft knows only too well about stock short­ages. It had shipped just 1.5 mil­lion 360s to re­tail­ers by the close of 2005, which was nowhere near enough to meet the ra­pa­cious Christ­mas de­mand. The sup­ply-chain is­sues of 2005 gave Mi­crosoft a much-needed bounce com­ing into 2014, how­ever, with Xbox One’s launch fig­ures such that it could lay claim to be­ing the com­pany’s most suc­cess­ful con­sole of its time in the busi­ness. Yet the num­bers speak for them­selves. Mi­crosoft hasn’t up­dated us on Xbox One’s sales since its fi­nan­cial re­sults in late Jan­uary, when it said it had sold 3.9m con­soles by the end of 2013. Sony, by con­trast, shouts from the rooftops about PS4’s per­for­mance at re­tail, most re­cently an­nounc­ing that the con­sole had passed 6m sales in early March.

In Fe­bru­ary, US mar­ket re­searcher NPD Group sug­gested Mi­crosoft was clos­ing in, with Sony hold­ing only a ten per cent ad­van­tage over its ri­val’s hard­ware sales that month. But there is a big dif­fer­ence be­tween clos­ing the gap and merely slow­ing the rate at which it grows. That Mi­crosoft is be­hind Sony in the US and UK – two mar­kets in which it en­joyed pro­found leads for much of the 360/ PS3 gen­er­a­tion – says a lot about how much needs to change.

For­tu­nately for Mi­crosoft, much al­ready has. To­day’s Xbox One is a very dif­fer­ent ma­chine to the one un­veiled to such op­pro­brium last May and even the one that launched in Novem­ber. The more con­tro­ver­sial cor­po­rate poli­cies have been aban­doned, the con­sole’s baf­fling UI has been stream­lined, and its de­vel­op­ment tools have been im­proved. Most sig­nif­i­cantly of all, Xbox One now has Ti­tan­fall. Within Mi­crosoft, there is a clear feel­ing that a cor­ner has been turned.

“Xbox One’s mo­men­tum is fan­tas­tic,” cor­po­rate vice pres­i­dent Phil Har­ri­son tells us. “The thing that re­ally im­pressed me was not just the hard­ware sales, which is ob­vi­ously one big num­ber that you mea­sure, but the en­gage­ment per user is ex­tra­or­di­nary. We’re see­ing more than five hours per day aver­age us­age on Xbox Live. Not only are play­ers buy­ing, but they’re us­ing and re­ally en­gag­ing with the plat­form, and that’s a great sign for the fu­ture.”

You’d ex­pect an Xbox ex­ec­u­tive to ac­cen­tu­ate the pos­i­tive, but Har­ri­son is right to point out that sales fig­ures don’t tell the whole story. PS4 is avail­able in 53 coun­tries, af­ter all, and Xbox One in just 13. Last month, Mi­crosoft an­nounced the sec­ond phase of its hard­ware roll­out, with the con­sole to reach a fur­ther 26 ter­ri­to­ries this Septem­ber. That will surely help, but there’s no telling how big the gap will be by then, and it’s no sur­prise to hear that Mi­crosoft Stu­dios cor­po­rate vice pres­i­dent Phil Spencer would rather things had turned out dif­fer­ently.

“I’ll just say it: I wish we were in ev­ery coun­try on day one,” he says. “Ac­cel­er­at­ing our coun­try roll­out is re­ally, re­ally im­por­tant to us. We built a box that na­tively un­der­stands the coun­try it’s in – the lan­guage and tele­vi­sion and other things – [so] let’s make sure we do a com­plete job in bring­ing the con­sole into those mar­kets. When we do, I think it will have an im­pact, but I want to do it in the right way. I don’t want to get there early if the box isn’t ready for the mar­ket it’s be­ing launched in.” This is the prob­lem. Xbox One, as Mi­crosoft’s PR team likes to keep re­mind­ing us, is not just a videogame con­sole but an “all-in-one games and en­ter­tain­ment sys­tem”, and its core func­tion­al­ity means it is much more of a headache to launch in­ter­na­tion­ally than Sony’s games-first, player-fo­cused al­ter­na­tive. The fea­tures en­abled by Xbox One’s HDMI In port also dic­tate that there is no point launch­ing the hard­ware in a coun­try where Mi­crosoft has yet to ink deals with ca­ble and satel­lite providers. The plat­form holder must also line up enough part­ner­ships with lo­cal en­ter­tain­ment com­pa­nies to en­sure day-one buy­ers can fill up their Home screens with stream­ing video apps. This isn’t solely an is­sue of hand­shakes and sig­na­tures on dot­ted lines, ei­ther – it’s an en­gi­neer­ing prob­lem, too. A sys­tem

de­signed from the ground up to be con­trol­lable by voice has to un­der­stand not only a coun­try’s na­tive lan­guage, but also be able to parse its ev­ery re­gional ac­cent.

For­get al­ways-on DRM, the used-game ban, and all the other em­bar­rass­ing PR climb­downs: the real mill­stone around Xbox One’s neck is, and has al­ways been, Kinect. While Mi­crosoft’s in­volve­ment in the US govern­ment’s PRISM pro­gramme, which saw it hand over user data from emails and Skype to the NSA, raised con­cerns over its de­sire to put an al­ways-on cam­era in liv­ing rooms the world over, Kinect’s prob­lems run far deeper than pri­vacy para­noia. For all that Mi­crosoft has in­sisted its next-gen­er­a­tion cam­era pe­riph­eral is in­te­gral to Xbox One’s de­sign, the re­al­ity is that Kinect 2.0 is finicky in its ges­ture recog­ni­tion, un­re­li­able for voice con­trol and still, cru­cially, wait­ing for the one game that im­me­di­ately jus­ti­fies its ex­is­tence. Episodic Sw­ery65 cu­rio D4 will not con­vince the masses of Kinect’s worth.

Kinect Sports Ri­vals may have a bet­ter chance, but it says much that we’re still wait­ing for the cam­era’s proof of con­cept as a gam­ing de­vice some five months af­ter launch, rather than hav­ing it on day one. And es­pe­cially given that two launch-day games, Crim­son Dragon and

Ryse: Son Of Rome, were orig­i­nally Kinect projects. Where are the games for the pe­riph­eral?

“You’ll ac­tu­ally see quite a few more,” Spencer says. “There are a num­ber of games on the ID@Xbox pro­gramme that use Kinect, and you’ll see more games in the fall. A lot of games are us­ing Kinect and voice in a very sub­tle way, which I ac­tu­ally think is a good thing. I think subtlety, in terms of sus­tain­able fea­tures, is bet­ter than these over-the-top [games where] you have to stand up and yell at the top of your lungs to make some­thing hap­pen. Go get Dead

Ris­ing 3, a great launch ti­tle that uses Kinect. Ryse used Kinect. Forza used Kinect. A lot of games out there use Kinect. Some­times in very sub­tle ways, some­times in more overt ways.” Kinect cer­tainly needs to progress be­yond sub­tle, mar­ginal gains if it is to jus­tify its in­clu­sion in the box with ev­ery sin­gle Xbox One that Mi­crosoft sends to re­tail shelves. A com­po­nent tear­down in the run-up to the con­sole’s launch put the man­u­fac­tur­ing cost of its cam­era pe­riph­eral at around $75; take that out of the equa­tion and Mi­crosoft is no longer faced with the prob­lem of sell­ing a less-pow­er­ful sys­tem at a sig­nif­i­cantly higher price than its clos­est com­peti­tor. The con­sole’s mas­sive UK sales in­crease was driven not just by Ti­tan­fall, af­ter all, but also by a price cut, low­er­ing its sug­gested re­tail price from a gen­er­ally un­palat­able £429 (at least next to PS4’s £349) to a much more psy­cho­log­i­cally ap­peal­ing £399, al­though bundling it with the most keenly an­tic­i­pated game of the new gen­er­a­tion to date ob­vi­ously helped. There’s a clear les­son here for Mi­crosoft in both its cur­rent and fu­ture Xbox One ter­ri­to­ries, but Spencer won’t be drawn on whether the com­pany will ap­ply what it has learned else­where.

“The UK thing was more of a spe­cific in­stance around cur­rency and other things that were go­ing on,” he says. “It’s a strat­egy for us to be price com­pet­i­tive, ab­so­lutely. We want to have a box out there that people see as good value. What does it mean to be price com­pet­i­tive with what we’re putting in the box, mak­ing sure gamers feel like they’re get­ting good value in the box that they’re buy­ing? Be­ing price com­pet­i­tive over the gen­er­a­tion – look at what hap­pened on 360, or frankly any con­sole – is ob­vi­ously some­thing that we’ll fo­cus on, mak­ing sure that we’re putting the best prod­uct on the shelf.”

“I WISH WE WERE IN EV­ERY COUN­TRY ON DAY ONE. AC­CEL­ER­AT­ING OUR ROLL­OUT IS RE­ALLY IM­POR­TANT TO US”

Ti­tan­fall’s re­lease nearly dou­bled Xbox One sales in its first week on sale, top­ping charts

Mi­crosoft Stu­dios CVP Phil Spencer knows Xbox One needs to broaden its reach

Xbox One proved to be Mi­crosoft’s most suc­cess­ful con­sole launch to date, but its ini­tial lineup felt dis­tinctly rushed. From top: Forza Mo­tor­sport 4, Crim­son Dragon, Ryse

Though a much­needed boost for Xbox One, Ti­tan­fall isn’t exclusive to Mi­crosoft, with mul­ti­for­mat sequels ru­moured

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