In a major strategy shift, Microsoft will focus less on the hard core gamers that have made its Xbox 360 a favorite with that crowd and will instead target a far more mainstream audience. The change is an implicit, if tardy, response to Nintendo's spectacularly popular Wii console, which lacks technical chops but has attracted hordes of casual gamers.
As part of the belated makeover, the Xbox 360's UI, which today consists of sterile "blades" dedicated to various gaming and entertainment experiences, will be replaced with a more personal UI based around player-modified on-screen characters called Avatars. Embarrassingly, they bear more than a little resemblance to the Wii's on-screen characters, cloyingly called Miis.
"We're entering a new age in entertainment, and Xbox 360 is uniquely positioned to become the heart of the living room," says Microsoft Senior Vice President for Interactive Entertainment Don Mattrick. "The new Xbox experience offers more content than you can find from any device that connects to the television. That convergence of entertainment and gaming will bring new people and more families to the category, driving a record year for the games industry."
Although Microsoft's attempt to attract a more mainstream audience is understandable, the Xbox 360 is uniquely unsuited amongst the competition for this task. While the console certainly has the horsepower and connectivity functionality needed to satisfy the needs of almost any gamer, it's also one of the loudest consumer electronics devices ever made. It is therefore unsuitable as a home entertainment device.
Microsoft has long been rumored to be working on a next-generation Xbox 360 console that would use more efficient microprocessors and other chips and would therefore be quieter and less of an energy glutton. But instead of announcing such a device, this week Microsoft instead revealed that it would add a slightly larger hard drive to the original Xbox 360 model that first went on sale in late 2005.
What the company is doing is bolstering the existing console's software experiences. Through a deal with Netflix, customers of that service will be able to order DVDs and stream TV shows and movies to their Xbox 360 consoles for free. Xbox 360 users will also be able to share games, TV shows, and movies online with others, via the console, in real time. And the company is expanding its stable of non-core games aimed at a more mainstream audience, including music titles like "Lips" and "Rock Band 2," family games such as "Banjo Kazooie: Nuts & Bolts," and sports entries such as "Tiger Woods PGA Tour."
But fear not, hard core gamers: Microsoft isn't leaving you behind. This year, games such as "Gears of War 2" and "Resident Evil 5" will debut on Microsoft's console, and the company surprised onlookers by announcing Monday that Final Fantasy XIII will launch on the Xbox 360 alongside the PlayStation 3 version. It was originally assumed that the next Final Fantasy title would be a PS3 exclusive.
So what does this all mean? Not much, actually. Despite a year-long head start over the competition, the Xbox 360 now trails the Nintendo Wii from a total sales perspective, and many feel that the PS3 will eventually overtake the Xbox 360 as well, given that it's outsold the 360 so far this year. Microsoft can claim otherwise, but when it comes to video gaming, the company has plenty of bluster but little in the way of actual success. Its console is too loud and too unreliable, and its competitors have innovated with the types of games people really want to play. There's little doubt that the 360 will maintain its lead among the hard core gamers who prefer shoot 'em up games. But there's equally little doubt that such an audience represents a small fraction of the overall market.