Final Could, Microsoft’s senior management workforce sat down for a biannual technique evaluation to debate the way forward for Xbox. Among the many contributors had been Sarah Bond, Satya Nadella and Phil Spencer.
The aim of the assembly was to start out planning for the subsequent technology of Xbox consoles (focused for launch in 2029), evaluation the mid-gen Xbox Sequence refresh, and the way forward for the gaming enterprise at Microsoft. Reviewing the presentation and notes from that assembly (and different conferences which have occurred) offers us an unprecedented peek backstage. It is an unvarnished view of how Microsoft management views the gaming trade and the place they suppose it’s going.
One massive caveat to all of this info is that it’s from a snapshot in time. Though we’re seeing it now resulting from court docket filings from the FTC v. Microsoft case, the content material is greater than a yr outdated. Whereas the broad strokes are possible nonetheless right, it’s at all times doable that specifics might have modified.
The technique evaluation assembly kicked off with a dialogue of Fortnite on xCloud and the speedy success that Microsoft and Epic had with the launch. Inside 4 hours of launch, 100k gamers had been enjoying Fortnite on xCloud, and 74% of them had been optimistic towards the service.
Microsoft coated all the streaming prices for Fortnite on xCloud, but it surely was taking a 12-point margin on gross sales. Assuming a 15% conversion charge — what Microsoft sees with console gamers — that meant Microsoft was breaking even on Fortnite’s streaming prices.
In response to Sarah Bond, Fortnite on xCloud was about studying for Microsoft.
Changing these numbers to {dollars}, Tim Stuart stated that breakeven was roughly $0.40 of income per hour. The aim was to halve that value by the top of 2025.
One possible motive the dialogue began with xCloud is as a result of Microsoft actually does see the cloud as the way forward for gaming. It isn’t only a advertising and marketing level. Primarily based on the data offered within the evaluation decks, the subsequent technology of gaming depends on “transcending the console technology.” Microsoft needs you to have the ability to play anyplace, anytime.
To make this imaginative and prescient a actuality, the subsequent technology of console is being described internally as a hybrid sport platform. Whereas the present Xbox Sequence consoles are primarily console experiences first, with cloud streaming added on as a function, Microsoft needs the subsequent technology of Xbox {hardware} to be designed with the cloud in thoughts.
A choice that hadn’t but been made final yr (although is probably going confirmed at this level) is what CPU structure to make use of: ARM64 vs. x64. The present Xbox Sequence consoles (and the deliberate mid-gen refresh) use x64 CPUs, identical to PCs. Staying with an x64 CPU would possible make backward compatibility simpler, however x64 CPUs typically take extra energy and run hotter than ARM64 CPUs.
So what’s an ARM64 CPU? When you’ve got a contemporary cellphone, likelihood is you have already got an ARM64 system in your pocket. Different gadgets that use ARM64 CPUs are the Microsoft HoloLens 2 and IoT gadgets just like the Raspberry Pi 4. ARM64 CPUs additionally energy laptops that run Home windows 10 and 11. These Home windows gadgets run x64 packages by way of emulation. In case you are a Mac person, the M-series laptops and desktops are ARM64, as are the A-series CPUs powering the iPhone.
Finally, the technical alternative is probably going going to finish up being primarily based on {hardware} concerns greater than software program. That features energy and efficiency concerns, in addition to manufacturing concerns. Part shortages severely restricted Microsoft’s means to promote Xbox Sequence consoles within the two years after launch, so if shifting to ARM64 may assure {hardware} provide, that might be a powerful level in its favor.
Together with a GPU design primarily based on AMD IP is smart from each a technical and enterprise perspective. Nvidia could be the present chief in the case of GPUs and GPU efficiency, however AMD is not far behind. With the demand for Nvidia GPUs limiting provide, utilizing AMD may possible assure models for Microsoft. If the long run Xbox {hardware} additionally does double responsibility as a machine studying or AI blade when not getting used to energy xCloud sport streaming, that would assist Microsoft convey down the general value of xCloud knowledge facilities even additional.
The point out of a Skinny OS, or lack thereof, on a $100 system and handheld gadgets implies that Microsoft is planning these gadgets to solely help streaming and never have any native play. Relying on how the {hardware} market shapes up over the subsequent few years, the $100 streaming field might by no means materialize. We’re already seeing producers like Samsung implement xCloud as a regular shopper in displays and TVs. If that turns into extra frequent, the marketplace for such a field might disappear earlier than it’s developed.
Apparently sufficient, Sony seems to have overwhelmed Microsoft to the punch with a handheld streaming system, although the PlayStation Portal solely streams from an area PlayStation 5. If Microsoft had been to launch a handheld system, it will possible help xCloud.
With all of that stated, do not count on a next-generation Xbox anytime quickly. Though plans can at all times change, Microsoft’s timeline from final yr has the next-generation Xbox launching on the finish of 2028/starting of 2029.
We’re at the moment close to the top of 2023, so if this timeline holds, Microsoft ought to have already made the ARM64 vs. x64 choice and began early {hardware} designs.
Along with the early particulars across the next-generation Xbox, Microsoft’s management workforce was additionally briefed on the mid-generation refresh plans for Xbox {hardware}.
Deliberate for launch within the latter half of 2024, the mid-gen refresh features a new controller and up to date (however no more highly effective) variations of the Xbox Sequence S and Sequence X.
The brand new revision of the Xbox controller, code named “Sebile,” seems like it’s deliberate to develop into the brand new normal controller. One of many massive additions is direct-to-cloud help. This was the first function behind Google’s Stadia controller. If Sebile can join on to xCloud for management inputs whereas having the show streamed, it may additional cut back enter lag on streaming titles. Different notable revisions embrace an up to date Xbox wi-fi connection, Bluetooth 5.2, and an accelerometer.
Primarily based on the presentation deck, Sebile is deliberate to launch on the finish of Could 2024, with a MSRP of $69.99. The up to date Xbox Sequence S and Sequence X consoles had been imagined to be introduced in early June 2024.
The up to date Xbox Sequence S console seems lots like the prevailing Sequence S, but it surely swaps the USB-A port on the entrance of the console for a USB-C port. Different modifications embrace a revised motherboard with a low-power standby, help for Wi-Fi 6E, Bluetooth 5.2, and 1TB of storage as normal.
The up to date Xbox Sequence S is deliberate to launch on the finish of August 2024 for $299. For players who’re on a finances, Microsoft plans to clearance the present 512GB Sequence S console with a $199 Black Friday provide subsequent yr.
The up to date Xbox Sequence X console is far more of a change. It incorporates most of the identical updates because the Sequence S, with a revised motherboard, decrease energy consumption, and higher connectivity. The Sequence X additionally bumps up the default storage to 2TB.
If these had been the one modifications, it would not be an enormous deal, however the slide from final yr’s presentation additionally reveals a redesigned case that appears like a vertical cylinder. That case redesign additionally means the lack of the 4K Blu-ray UHD disc drive.
For players who’ve gone solely digital, that is not an enormous deal. The Xbox ecosystem handles digital video games extraordinarily nicely. However for many who desire bodily sport accumulating, it is a fairly massive miss. Keep in mind, there are some backward appropriate video games which can be bodily solely, and a few discs are now not being made.
Including higher Wi-Fi and extra storage at the price of the disc drive will not be perfect for everybody. For those who fall into that latter class, maintain an eye fixed out for vacation gross sales on the present Xbox Sequence X. You will need to safe a unit with a disc drive.
The up to date Xbox Sequence X is deliberate to launch on the finish of October 2024 for $499.
Lastly, there was dialogue round making customized consoles accessible by way of the Xbox Design Lab. Whereas very intriguing, this was additionally highlighted as one of many open gadgets resulting from it not being funded. It would not damage to consider what loopy designs we would have the ability to provide you with if the chance had been accessible.
Whereas all of this info is thrilling, there’s one essential reminder. All of this info was present as of final summer time, however a yr is a very long time, and plans can change. All the timelines could also be outdated by now; they may very well be delayed, or they may have moved up. The identical is true of particular options and pricing.
Microsoft wasn’t planning for this info to be made publicly accessible, however now that it is out within the wild, it is very doable that the corporate will shift gears and tackle it.
EDITOR’S NOTE: All the info on this article is predicated on filings made with the court docket as a part of the FTC v. Microsoft trial earlier this yr. All paperwork filed with the court docket that aren’t underneath seal are public file. You will discover the unique FTC v. Microsoft trial paperwork on the court docket web site.
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