All the talk before E3 was the battle looming between Sony and Microsoft going toe to toe with dueling press conferences. Sony seemed to have the last laugh, both literally and figuratively, with its press conference scheduled for the end of the day and the revelation that the PS4 would retail for $399, a full $100 less than the Xbox One. Yet this final article in our three-part series explores whether Microsoft — in spite of history being stacked against it, and in spite of failing to learn from the past — is still positioned to win the PS4 vs. Xbox One debate. As much as people want to talk about hardware, Microsoft ironically among them, the issue of hardware is completely moot in the next generation of consoles. And whenever software and services come into play, Microsoft has a fantastic track record.
Both the PS4 and Xbox One are powerful machines, to the point that they essentially cancel one another out. For many years now, the leap from one console generation to the next has hinged on which manufacturer has the better hardware. Back when we still talked about bits, the discussions hinged on the leap from 8-bit to 16-bit graphics processors. Then the conversation evolved to cartridge-based vs. disc-based games, eventually going back to bits in 64-bit era (Nintendo 64). Sony’s PlayStation brand owned two generations, with Sony remarkably still innovating, but Microsoft’s entry into the market cranked the hardware-debate volume to 11. CPUs, GPUs, hard drives and RAM — traditionally PC terms — entered the console lexicon and set fanboys ablaze.
Outside of the total hardware geeks, those conversations have been virtually silenced in the PS4 vs. Xbox One debate. Perhaps because the PS4 and Xbox One are releasing at the same time, perhaps because they both have AMD processors, or perhaps because there aren’t many more unique leaps hardware can realistically take, games on the PS4 and Xbox One look almost identical. The user interfaces are different, and each system’s functionality is distinct, but the question of “Is the Xbox One or the PS4 more powerful?” is pointless. The form factors and controllers will each have their champions and detractors, but the “Xbox One or PS4?” debate really comes down to software and services.
This next generation of consoles, if not all future generations, is no longer a competition of horsepower. Now it all comes down to game engines, developers and skill. Look at the Battlefield 4 single-player demo; we saw it running on PS4, but it looks similar on Xbox One. Look at the Assassin’s Creed IV: Black Flag E3 footage and the Need for Speed Rivals E3 demo; we played them both on PS4, but the Xbox One version looked no different. The game engines are optimized for the next generation, regardless of platform. The current financial model doesn’t allow for specialization; publishers need to diversify and make as much money as possible. Unless a manufacturer is willing to pony up for an exclusive, game engines will pander to the lowest common hardware denominator. And the lowest common denominator in the PS4 vs. Xbox One battle is high enough to be indistinguishable from the console above it.
Essentially, this next chapter in the Sony vs. Microsoft saga has taken hardware out of the equation. What we’re left with is a battle of infrastructure and services. Microsoft’s Windows and Office software, and even its Xbox platform, has established Microsoft’s software superiority. At times it may be buggy and annoying, but over the long haul it’s done well. When you look at Microsoft’s reversal of its DRM and used-game policies for Xbox One, it’s clear just how reliant the PS4 vs. Xbox One discussion has become on software. The quick change in course was only possible because software changes are easier to implement than hardware ones. Make no mistake: Microsoft’s DRM and online vision will inevitably come true, just not at the Xbox One’s launch. It’s foolish to think otherwise; the company will surely force Xbox One owners to take baby steps in that direction via system software updates during the next five years.
Yet whether they realize it or not, consumers have fully embraced the software-focused next-gen strategy. Look at the increase in Xbox One pre-orders following Microsoft’s DRM reversal. Microsoft predicted this mindset shift — perhaps even caused it — when they launched Xbox Live on the first Xbox. Xbox Live was like a tactical nuke in the PlayStation vs. Xbox war. Now it’s more robust than PlayStation Network, and with that service sitting alongside exclusive software and service tie-ins with the NFL and others, the Xbox One is better positioned to draw mainstream consumers to the Xbox One. Xbox Live launched ahead of its time, perhaps even prematurely, but Microsoft has since polished it into a money-making beast. Sony decided to charge for online multiplayer on the PS4 for a reason: it’s a Trojan horse into future revenue streams.
History has repeatedly shown that the market leader loses the next generation, and that focusing too much on hardware is a recipe for defeat. Based on those indicators, Microsoft should fear what the future holds. But the move to PS4 and Xbox One is like no generational leap before it. Hardware is irrelevant. Software and services are king. Microsoft invested in software and services early in the Xbox platform’s life, and that strategy could be the next-gen difference maker. Whether a software-driven victory comes to pass is years away from knowing, but by making hardware almost a side conversation, Microsoft is in a history-be-damned position to win the next generation.