National Post (National Edition)
HOW XBOX IS GOING AGAINST THE GRAIN
A BEHIND-THE-SCENES LOOK AT MICROSOFT’S NEWEST GAMING CONSOLE
Designed with a blend of rustic-meets-industrial influences, Building 87 sits within Microsoft Corp.’s main campus, surrounded by a verdant, treefilled landscape that’s typical for western Washington.
From the outside, Building 87 looks unassuming. But inside, it is filled with new technology and a state-of-the-art prototyping centre for Microsoft’s growing hardware business, featuring products such as the Surface touchscreen computer and the Xbox gaming console.
The next generation of that console, the Xbox One X, launches Nov. 7 and represents the first time a company has chosen to significantly update its console in the middle of what is usually an eight-to-10 year sales cycle, but Microsoft believes it will be the most powerful home game system to ever hit store shelves.
Microsoft is betting the nearly US$79-billion gaming industry is ready to upgrade just four years after the release of the Xbox One in order to receive faster processing power, higher quality graphics and 4K resolution with HDR support (meaning darker blacks and colours that almost literally jump off the screen).
“In previous generations, we did refreshes of the way the look and design was done — what we call the ‘I.D.’ or industrial design,” said Phil Spencer, Microsoft’s head of Xbox, in an interview on campus.
“This is an opportunity for us to refresh obviously the industrial design, but also the performance of the box.”
Microsoft’s gaming division saw a three-per-cent increase, or US$44 million, during its fourth quarter and 2017 fiscal year ending June 30, thanks in part to its online subscription service, but its Xbox hardware revenue dropped a substantial 29 per cent due to price drops and low sales.
But if Microsoft is to come back swinging in a market it once led during the previous generation cycle, it needs a new console that asks — if not begs — die-hard gamers to return.
In a small, nondescript room within Building 87, several industrial 3D printers that line the walls are pumping out prototypes of new Xbox One controllers in order to test sizes and textures.
Outside the door are two shelves with Xbox-related 3D printed items such as funkycoloured controllers and famous characters, all laid out Hall of Fame style.
In adjacent spaces, Microsoft employees are trying out new paint colours on its gaming controllers, as well as fabrics for Surface keyboards.
The facility’s most impressive area, however, is a 20,000-square-foot space filled with row upon row of machines that employees use to input test designs for a variety of prototypes.
Laser and water jet machines are used to cut various types of materials — from magnesium slabs to cardboard — all with the objective of manufacturing the product in an efficient and costeffective way.
Microsoft can test designs in-house within hours instead of the days, even weeks, that it takes companies that outsource the prototyping process — something the tech giant also did, before doubling down on hardware several years ago.
“We’ve set a real clear focus on the gamer as the customer for this box and making sure that’s who we are designing it for, and the results pay off, but it’s great to have the facilities at Microsoft to help bring those designs to life,” Spencer said.
The company also has onsite scientists who specialize in audio, human interaction and the environment to research user behaviour, which helps determine the best console design that will appeal to the largest audience.
For example, the building houses a suspended anechoic chamber that’s been named the quietest place on earth, according to Guinness World Records. It tests everything from the loudness of the console to the volume of the startup chime and software digital alerts.
In the human factors lab, people are brought in to see how they behave while playing games, such as whether they lie down or sit, and Microsoft scans their arms and heads to find the optimal size for controllers and button placements, as well as how the hardware feels to various ages.
“When we design a technology, we look at it as a technology company, but we take a lot of human into that technology design,” said Gopal Gopal, Microsoft’s principal human factors engineer.
There is also a vision lab: a simulated living room with a full home theatre system setup, with a lighting rig to measure how the hardware looks in any situation.
The company even tests variations of brightness in all sorts of simulated lighting scenes, from indoor darkness to outdoors on a sunny day.
“Our intent in 2000 (for the first Xbox) wasn’t to not be inclusive in how we built things, but your toolkit for hand sizes and people with different disabilities and getting their input into the creation was more of a logistics problem,” said Albert Penello, Microsoft’s senior director of product management and planning.
But all of Microsoft’s meticulous testing won’t matter if the market isn’t interested.
Asking gamers to upgrade their console in less than half the usual amount of time is a bold move, but the tech giant is trying to manage it in a way that won’t turn off customers.
The Xbox One X will exist alongside the current generation’s Xbox One S, with all games being developed for and supported on both platforms. Companies will make games with a higher resolution and fidelity for the new console’s specifications, but Microsoft’s development tools allow the old Xbox One S to play the same titles as well.
Microsoft is essentially keeping two different Xbox One models, and letting gamers decide if they want the latest and greatest capabilities or stick with older, lower-quality hardware.
“What’s interesting is this challenges the longstanding notion of console generations because (the Xbox One X) is a lot more powerful than the original Xbox One or Xbox One S,” said Lewis Ward, IDC’s research director of gaming and VR/AR.
The Xbox One launched in 2013 and critics then said the company had focused too much on developing an all-in-one home entertainment system with voice control, DVR support and other bells and whistles, instead of gaming. In contrast, Sony’s PlayStation 4 was squarely directed at hard-core gamers and ended up running away with sales.
Though Microsoft doesn’t release official figures for Xbox hardware sales, research firm SuperData estimates the company had sold 33 million Xbox One units from its November 2013 launch to June 2017, while Sony sold 60.4 million PlayStation 4 units.
The Xbox One X endeavours to close that gap, with technical features that resonate with dedicated gamers, while also building in the capability to handle technologies such as virtual and mixed reality built on the Windows 10 platform.
Early research by IDC suggests that the market is willing to listen. Seven million consoles are expected to be sold in North America within the next two quarters, and 21.6 per cent of prospective purchases say they are specifically looking at buying an Xbox One X, compared to 22.2 per cent eyeing a PlayStation 4 Pro.
In terms of product families, the entire Xbox One lineup earned 36.6 per cent of the vote compared to PlayStation 4’s 35.6 per cent, narrowly taking the holiday 2017 sales crown, IDC’s research suggests.
“What the broader takeaway (from our research) implies is that Microsoft’s gamble is going to pay off,” Ward said. “It does appear to stabilize the slide that Microsoft has been on, which I think is a positive step. It looks like, in North America, that the PS4 Pro and Xbox One X will be neck-and-neck in sales for at least the next six months or so and if that happens, you have to say that’s a win for Microsoft.”
But a home gaming console is only as good as the library of games that supports it, so Microsoft has also tried to make the development process easy for video game companies that want to upgrade to the higher fidelity graphics and technical power.
“When Xbox One X came around, we were involved pretty early on … and have been really happy with what we’ve been able to do,” said Mike Rayner, technical director for Vancouver-based studio The Coalition, which develops the popular Gears of War franchise.
Diehard gamers already seem convinced that the bump in power is worth the bump in price, with the Xbox One X checking in at a premium $599 price tag.
Nick Andrew, who runs Montreal-based AR12Gaming, a media company that offers gaming news, a YouTube channel and livestreaming gaming, said he’s already ordered three 4K televisions and is ready for the Xbox One X.
“I know a lot of people are definitely interested in it and getting back into the Xbox family, that’s for sure,” said Andrew, adding that while 4K resolution is one of the biggest features that will appeal to gamers, there are also other day-to-day perks to upgrading such as loading times and jumping into games quicker.
But if gamers want to be more value focused and don’t want the extra bells and whistles, Microsoft’s Penello said they can get the same titles now on the less expensive Xbox One S while using the same accessories, knowing they will carry forward to an Xbox One X in the future.
He adds that backwards compatibility is important since people are now more attached to their content than their device, which is a “fundamental change” in the industry.
“I’m not afraid (that people won’t adopt). I’m hopeful,” Penello said. “There will be people who want that performance and they are going to be happy, then there are going to be people who aren’t on the bleeding edge and I’m totally happy for them to buy an Xbox One S.”
Note: Microsoft flew in journalists from around the world, including Postmedia, to the company’s headquarters.
WE’VE SET A REAL CLEAR FOCUS ON THE GAMER AS THE CUSTOMER.