What’s next for Xbox?

[8 January 2008]

By Victor Godinez

The Dallas Morning News (MCT)

Who’s ready to start talking about the next Xbox?

Yeah, I know, it sounds idiotic - didn’t the 360 just come out? But one glance at a calendar suggests it won’t be long before we start hearing all sorts of tidbits about the Xbox 720.

After all, the original Xbox came out in the fall of 2001.

The Xbox 360 was released in 2005.

Repeating that four-year lifespan, the 720 (or whatever it ends up being called) should come out, um, let’s see, next year!

To be fair, Microsoft executives have said they envision a longer life for the 360 than the original Xbox enjoyed. And the 360 will easily break the sales totals of the original Xbox (at least outside of Japan), so it makes sense to keep the platform alive as long as possible. After all, the second half of a console’s life cycle is its most profitable, because the cost of assembling what was once cutting-edge hardware has declined dramatically.

But I don’t think Microsoft counted on the exploding popularity of the Wii. After all, what spurred Microsoft to release the 360 so early was that the original Xbox was being trounced by the PS2. Launching the 360 early did blunt the impact of the PS3, but now the Wii looks set to humble the 360 in the same way the PS2 did the Xbox.

So does Microsoft respond as it did before, rushing out a successor console ahead of everyone else?

Maybe.

If the Wii continues on its rocket-propelled sales trajectory, with the 360 falling behind at an increasing rate as Nintendo eventually figures out how to make enough consoles to satisfy demand, Microsoft will have to do something.

That could be one of three things:

Ignore the sales disparity and focus on making the 360 a profitable venture for Microsoft.

Release a new console with more powerful graphics but with some sort of motion-sensitive control that steals some of the Wii’s thunder.

Stop making consoles.

I think option three, killing the Xbox, is about as likely as Bill Gates switching to Linux. The console industry has become too important to Microsoft’s strategy of expanding its business into the living room for the Xbox to be euthanized now.

Nothing else that Microsoft has ever made has come close to the 360’s popularity in that space, and the company clearly hopes to use that opening to sell downloadable movies and other digital entertainment to consumers before Apple does.

I think a combination of options one and two is pretty likely, though. And I think Microsoft will give the 360 one more year than it gave the original Xbox.

The 360 has turned into the most consistent hit-generator of any of the consoles (i.e. the ratio of good games to dreck is better on the 360 than on either the PS3 or Wii). Even the pointy-haired types at Microsoft know that taking an ax to the goose that lays golden eggs is a bad investment strategy.

At the same time, though, I just don’t see Microsoft conceding the console market to Nintendo for too much longer if the Wii turns out to be a long-term hit.

So 2009 might be a little early for the Xbox 720, but come 2010, all bets are off.

Published at: http://www.popmatters.com/pm/article/whats-next-for-xbox/