What's in Store in the Next Generation Consoles?

Obviously all three platform holders are working on their next generation consoles, we even know that Microsoft (MSFT) has given theirs the codename “Phoenix”. It is also pretty obvious that all three will be scaled versions of the current generation consoles with up to four to five times the power. They will use massively enhanced versions of the same GPUs and CPUs  and will have a lot more memory. Backwards compatability will be 100%.

Nintendo (NTDOY.PK) is in the tightest corner. The Wii is looking very tired with its lack of HD TV support and lack of hard drive. It is still selling well, but on the back of a small handful of populist games that are now quite old. So sales numbers could implode at any time, there is nothing new driving them forward. The lack of first party Nintendo game releases for a long time now looks suspiciously like its internal teams are working on the SuperWii instead, to ensure a good supply of launch titles. This means that the SuperWii is not too far away.

Microsoft is obviously working towards a two model range with the 360 and the Phoenix both available for many years. It has now moved the Xbox 360 down to the $199 price point so it is strategically positioned to launch the premier price point Phoenix machine any time it wants. Microsoft has pulled off brilliant long term strategy with the current generation machine so don’t be surprised if the Phoenix arrives sooner than the analysts are predicting. The market is ripe for a premium machine that is up to four or five times more powerful with 100% backwards compatibility.

You have to wonder about Sony (SNE). The losses on the Playstation PS3 fiasco have wiped out the profits the company made with PS2. So will it even bother with PS4? The answer is probably yes. Firstly because it will be far cheaper to develop, being just a scaled PS3. Secondly because as a company it needs to make profits and the console business can be enormously profitable when you get it right. And thirdly, because this industry is still at its beginning and will grow to be massively bigger, so the potential upside is huge.

One thing I think is very possible is that one of the upcoming consoles makes a step change in its sound capability. Generation upon generation we haven’t had the same advances in sound that we have had in graphics so there is plenty of scope for such a step change. The main cost is development, after that you are just making silicon. So there is a big opportunity to get a substantial product differentiator here. Which would be nice after the 360 and PS3 were so close to each other in capabilities.

Disclosure: None

Comments

[Carousel:]

Sound capability not advancing? What are you on about?

PS1 = Stereo/Mono via phono
PS2 = Dolby ProLogic / DTS via Optical
PS3 = Dolby Digital / DTS via Optical or Uncompressed LPCM 7.1 via HDMI

Consoles have always kept up with the latest sound trends, and in the case of the PS3 LPCM 7.1 is the absolute bleeding edge of sound quality - uncompressed 7.1 is as good as it gets! Also games now have musical scores and soundtracks to rival Hollywood movies!

Short of getting silly by adding more than 7 speakers or adding a complete change in technology (highly unlikely as you'd not only have to replace your console but also your AV system and speakers) there isn't a lot more you can do with sound on consoles...

You're more likely to get some sort of 3D technology than you are getting some new sound technology!!!

Also saying Microsoft pulled off a "brilliant long term strategy" with the 360 is one of the funniest things you've come out with to date! The 360 is probably the biggest example of a rushed short-termist console on the market! The 360 was always about the quick buck, getting it out of the gate first (regardless or technology [HD-DVD] or quality [RROD] sacrafices) in order to capture enough market share for it to live off for a few years before replacing it with a newer console.

It will be interesting to see how the market (and industry) copes if we get to a situation where we have no fixed hardware generations and all the big 3 start operating on their own life cycles.

As for your point about the next consoles being scaled versions of the existing models with 100% backwards compatibility I agree with you for once. The Wii will continue down it's current path but with HD graphics and a more refined Wiimote (possibly one not requiring a sensor bar?), the 360 will be very similar but with a big HDD as standard and some kind of high-capacity disc format (be interesting if they swallow their pride and go with Blu-ray or come up with their own High-Capacity DVD solution), and the PS3 will continue to use a Cell architecture but improve the memory allocation (Home and XMB will also still feature).

What will be interesting to see is if the PS4 will introduce a paid-for PSN service, they couldn't do that with the PS3 as it's infrastructure wasn't there, but by the time the PS4 comes it will be a mature service with proven online and MMO games, a large game/video store, a fully featured trophy system and an established online Home community etc. Add to that the likes of cross-game invites and in-game video chat which will be available on the PS4 and you've essentially got all the LIVE service offers and much more.

If Sony continue down the free route with the PS4, would Microsoft really be able to justify their $50/year fee for another generation? Could the promise of free-online be the thing to convince the XBox faithful to upgrade again so soon?

2008 Sep 15 10:36 AM

[xerxes:]

The author has obviously made it his mission to talk up the Xbox 360 and talk down the Wii and PS3. Like a skilled politician he is making statements that have no relation to reality at all.

Statement 1 by the author: "The Wii is looking very tired....sales numbers could implode at any time".

Fact: The Wii is selling faster than any other console in history, including the PS2. Detractors have been calling the Wii a fad for almost 2 years and it is still selling out everywhere in the US.

Statement 2 by the author: "Microsoft has pulled off brilliant long term strategy with the current generation machine."

Fact: The 360 is selling less than both the Wii and the PS3. It is barely selling better than the original Xbox. The rush to marked caused Microsoft quality problems that result in a 1.1 billion dollar write-off. Ask Bill Gates if he thinks that is a brilliant strategy.

I think the author is shorting Sony and/or Wii and is writing these articles for personal gain.

2008 Sep 15 06:18 PM

[Nerd Fitness:]

Another extremely under-researched, poorly written article by Bruce. The amount of speculation (and unexplainable glowing praise for the 360) is almost comical.

Can't wait to see what you cook up next.

2008 Sep 16 03:07 PM

[User 279412:]

Microsoft 360 owns roughly 32 percent of the console market. While PS3 owns 22 Percent of the market worldwide. 360 also generate more sales revenue from game sales on their consoles then PS3. Also, Sony took a much larger writing off on the PS3 then MS. You people are laughable fanboys.

2008 Oct 14 02:18 PM

[Eran:]

360 vs PS3
The 360 is more bang for the buck right now.
Its main prosesor design make it much easyer to design games for it and to maximize its prosesing ability.
Its memory configiration allow mush more versatility as its 512MB can be used for any purpose (prosesor or graphics) while the PS3 has seperate dedicated 256MB for each - the graphics and the procesor. So if you don't use all the graphic memory you can't use it for procesign and program runing. And if you don't use all of the main mermoy for procesing you can't use it for graphic.
So the only advantage of the PS3 is the blue ray and some very uniqe games that will be sucsesful in using the big but hard to achieve procesing power of the Cell procesor.

2008 Oct 21 01:53 PM

[Big White Kid:]

I think that you all need to stop being poor bastards and just buy all three systems like i did. All three systems are amazing. Why must everyone bitch about how bad consoles are are and how one is so amazing. Here are the FACTS!!!!

1. Xbox Live is worth $50. Like i said i own a PS3 and a 360 and the 360 has a better online experience, plus many exclusives.

2. Playstation has blue-ray. tada... that's all there is too it. It is better then the xbox for that reason.

3. Xbox has an amazing controller, playstation controller is light and fragile. Feels like i'm about to break it.

4. Playstation has great games like MGS4, GT, littebig planet.

5. Xbox has great games like Gears of War (1/2), Halo 3, GTA IV (DLC)

6. Blue-ray=Future(4-8 years)

7. Wii is lots of fun,. but no really good games.

Just go buy all three and get along!!!!!!!!!!!!

2008 Nov 28 10:21 PM