Xbox 720 Will Be A 'True Hybrid Console,' says AnalystXbox 720, if you believe the rumors, could be on the market as soon as Holiday 2012, which would put it in direct competition with Wii U. What kind of system will it be though? Xbox Live has been at the heart of Xbox 360 and digital has become hugely important. Now Microsoft is strongly hinting at cloud gaming tech for the 360's successor. What does it mean? IndustryGamers chatted with analysts.
The one thing analysts all agreed on is that Xbox 720 will still retain a physical disc drive. While digital has grown by leaps and bounds, physical software is likely to generate excitement and sales for many years to come.
"I don't expect vendors to leave physical media formats out of next generation consoles. Gaikai and OnLive are viable game delivery systems but in the near term cloud gaming services can't yet allow access on a scale to realize their inherent disruptive potential. Again, back to boring basics, next generation game consoles and dedicated gaming handhelds must link to user accounts stored on servers rather than locking down identity and content ownership at a device level. If Nintendo and Sony do not follow Microsoft's lead here, it will cost them market share next generation," noted M2 Research analyst Billy Pidgeon.
"I’d expect the Xbox 720, or whatever they choose to call it, will act as a true hybrid console, supporting both physical and digital media." - Jesse Divnich
Pidgeon does see cloud gaming taking over eventually, however. "I agree with Microsoft's assertion that cloud-based game delivery as a replacement for physical media is in the long term future... All digital content service providers must integrate at least a basic level of cloud technology today in order to remain competitive. Amazon, Google, Microsoft, Apple and others already offer free and paid cloud services for digital content. Consumers are going to demand cloud services, including persistent storage and some delivery options when paying for digital content (including games) whether the content is meant to be accessed on the Web or on a device."
At the very least, perhaps this means hard drives won't be as necessary if game saves and other data can be stored in the cloud.
According to DFC Intelligence analyst David Cole, you could argue that Microsoft has been working with cloud technology on Xbox Live all along, but he still sees physical game software as too important for Xbox 720 to abandon: "I think that the Xbox 720 should definitely have some sort of access for physical media. The cloud stuff can open up new doors and Microsoft's strategy is all about delivering services via the box, basically it has been somewhat of a cloud strategy from the beginning."
"But the thing is games = entertainment and this means you need the physical presence. We can just look at the mob at retail last week as a sign of its importance. Half the fun is rushing to fight the crowds at GameStop to get your hands on a copy hot off the truck. You take that away from customers and you lose a great deal of business. It is very different from the business side of Microsoft. So when Microsoft talks about the cloud technology in Xbox 720 I think it is often more the business/technology side versus the entertainment/marketing side."
Colin Sebastian of RW Baird believes the Xbox 720 will ultimately offer the best of both worlds, enabling digital gamers to truly embrace the cloud while not alienating those players who want to cling to physical products.
"I think any smart console manufacturer will want to offer a mix of distribution points for consumers - both in the cloud and at retail stores. There is such a broad spectrum of games that consumers are playing, and there is not a one-size fit all solution. So I would expect a company like Microsoft to leverage what they've built in terms of online services, cloud computing and Xbox Live, to offer a menu of games. For large-scale games such as Halo and Call of Duty, I think it would make sense to offer on disks, unless we see a meaningful increase in broadband speeds, network reliability, and storage capacity," he commented.
EEDAR's Jesse Divnich agrees, noting that Microsoft's next Xbox is likely to be what he dubs a "true hybrid console."
"The digital transition will be just that, a transition, and neither Microsoft nor Sony will force consumers to go 100% digital. The digital transition will ultimately be at the choice of the consumer and Microsoft and Sony will continue to support physical media until the mass market has reached the tipping point of acceptance on digital," he began.
And as much as we and many developers like to point out the huge growth in digital, Divnich was sure to remind us all of the predominance of physical software sales. "Right now, only about 10% of console software revenue occurs digitally and it would be inefficient for either manufacturer to accelerate that to 100% through a cloud or digital only environment," he said, adding: "I know companies like Apple forced their consumers to go 100% digital, but keep in mind that at the time Apple was still emerging as a market leader in the music space. They understand that it would take years to go from 0 to 100MPH. Microsoft is already the market leader and it would be detrimental to their current success if they hit the reset button and forced consumers into an experience they may not be ready for."
"I’d expect the Xbox 720, or whatever they choose to call it, will act as a true hybrid console, supporting both physical and digital media with the long-term hopes that they can provide enough incentive and value to accelerate that transition."
Are you ready to go all digital, get your gaming fix from the cloud, or do you still desire physical software? Feel free to hit up the comments section.
