Several days after the announcement and having read just about every interview done by a Microsoft executive in the interim, I must confess; I'm still confused by what exactly the company intended with its decision to unveil both a redesigned Xbox One and its heir apparent, Scorpio, at the same press conference. While Scorpio is clearly designed as some kind of a "spoiler" for Sony's ambitions with PS4 Neo ("ah, but there's a much more powerful Xbox coming next year" is the nugget of uncertainty they hope to plant in consumers' minds), and Xbox One S is a logical set of evolutionary improvements over the existing hardware, it's their interaction and coexistence that's outright confusing. The simple question that lacks any equally simple answer is this; why would I buy an Xbox One S this year, when there'll be a sort-of-next-gen system next year that plays all the same games, but better?
The whole picture of what's going on with Xbox only becomes more confused and complex when you add in the slightly tortuous messaging around Xbox Live that Microsoft executives have clearly been trained to use. Microsoft really, really wants you to know that Xbox isn't just about, well, Xboxes; it's really about Xbox Live, which is a service offering that covers PCs, and tablets, and mobiles, and pretty much anything you might ever dream of playing a game on, as well as those who've actually gone out and bought physical Xbox hardware. That's a great thing, of course - the potential for a fully featured gaming service that stays with you no matter what device you're using is enormous and hugely exciting - but the messaging around it is nothing short of obtuse, finding its most bizarre expression in the company' decision to stop talking about selling Xbox hardware and speak instead in statistical riddles about how many hours people are spending on Xbox Live.
Part of the problem with that is that it leaves otherwise extremely credible, well-intentioned and sincere people like Phil Spencer dancing around in disingenuous doublespeak - well, that and the obvious desire to dangle passing Microsoft execs over nearby cliffs until they just. speak. bloody. English. Spencer and Microsoft's other representatives have found themselves on the one hand trying to actively talk down the importance of Xbox hardware in order to justify aspects of their focus on the Windows 10 platform (which, honestly, doesn't really call for all that much justification; was anger at Xbox titles appearing on Windows truly that widespread?). On the other hand, they want you to be very excited about Scorpio and Xbox One S. Hyping up new hardware while simultaneously downplaying the importance of hardware to your business is a tough bit of verbal gymnastics to pull off.
"Spencer and Microsoft's other representatives have found themselves on the one hand trying to actively talk down the importance of Xbox hardware in order to justify aspects of their focus on the Windows 10 platform"
It's to the credit of Spencer, in particular, that he doesn't come across as personally disingenuous when he says these things; the company's slightly confused back and forth of statements and retractions during E3 week didn't play terribly well (and it's got alarming echoes of the firm's failure to control its own messaging after the original Xbox One reveal), but Spencer himself is a much more firm, reliable and trustworthy figurehead for the organisation through periods of uncertainty like this. He's someone who cares quite deeply about the Xbox division and the studios it works with, and you get the sense that the problems with Xbox' messaging and strategy at the moment aren't coming from Spencer or his team, but rather from their struggling to balance the contradictory demands being placed upon them from higher up the Microsoft corporate ladder.
I say that because it's fairly clear that the bargain struck to keep the Xbox division within the somewhat ill-fitting fold of Satya Nadella's more business-and-services focused Microsoft is that it's going to be primarily responsible for providing the firm with a gaming (and media, to some degree) network service that will be universal to all of Microsoft's offerings. Completely aside from its genuine potential, much of the reason for the focus on Xbox Live is because it's what the division exports to the rest of Microsoft; the raison d'etre of Xbox, from the perspective of some much larger and more politically important divisions within the company, is the gaming offering it provides to Windows 10 across a variety of devices. Xbox hardware is just another Windows 10 platform; the notion of there being games that you can play on Windows 10 on Xbox, but not play on Windows 10 on an equivalently or more powerful PC, is anathema to Microsoft's platform vision.
"Shorn of its console hardware, Xbox Live would just be the new Games for Windows, and the value of its continued existence would probably come into question"
At the same time, though, Xbox hardware is still an important part of the business of the division. Shorn of its console hardware, Xbox Live would just be the new Games for Windows, and the value of its continued existence would probably come into question a while down the line. Moreover, Xbox attracts a disproportionate amount of press and attention - and that's the other blade of the scissors cutting Xbox' messaging and strategy to ribbons right now. Much of Microsoft wants the division to focus on Xbox Live and on making a major contribution to Windows 10; but other parts of the company, no doubt, are deeply concerned at the widely accepted narrative that Microsoft is "losing" to Sony in the consumer space, a perception which, if it becomes embedded in consumers' minds, could be far more damaging than any actual gulf in unit sales. So the contradictory demands are placed on Xbox; focus on Windows 10, but make damned sure you don't let Sony get the march on us long-term.
It shouldn't need to be pointed out that confused messaging about Scorpio, in particular, doesn't mean it won't be a technologically impressive device with huge market potential. Everything the company has said about Scorpio so far is rock-solid; it's the broader context that's worrying. It's the notion of Xbox One, a console actually outperforming Xbox 360 in launch-aligned sales, being kind-of, sort-of, left to a Wii U style fate, where everyone knows something better is coming so nobody wants to buy. It's also the question of what the Xbox faithful will make of this twist; not the handful of noisy Internet fanboys who are already declaring Scorpio to be the second coming, but the solid, devoted Xbox players who bought into Xbox One relatively recently and now find their console being superseded far sooner than expected.
"This is a problem Sony will face with Neo to some extent as well, and while allowing Neo information to dribble out before E3 did a great job of keeping it off the agenda, I still think the company faces an uphill battle"
This is a problem Sony will face with Neo to some extent as well, and while allowing Neo information to dribble out before E3 did a great job of keeping it off the agenda, I still think the company faces an uphill battle to convince its existing PS4 installed base that the launch of Neo isn't going to screw them over. However, in contrast to the challenge of Scorpio - which is for all intents and purposes just a brand new console - PS4 Neo looks like a walk in the park. Already Microsoft is tying itself up in knots as to whether there'll be Scorpio-exclusive titles or whether everything will run on an Xbox One as well; in reality, neither path is entirely appealing, since the performance gulf between the consoles is so great that forcing developers to optimise for both will amount to creating two different games, making Scorpio titles that are just moderately upgraded Xbox One titles will leave Scorpio owners deeply dissatisfied, and making games that only work on Scorpio will essentially be two fingers up at the Xbox One installed base. I don't envy those at Microsoft charged with making the judgement call on that front.
History, of course, may judge Microsoft to be making the right call in this instance. They'll be first to market with a "native" 4K console, and may be the first to have a console that can drive AR experiences (or perhaps certain kinds of VR). In the process, though, they'll split their installed base and give Sony an extra year or more of almost unchallenged dominance of the market for PS4, as potential Xbox buyers hold on for the new device. Great, innovative platforms have been sunk by less. If Microsoft doesn't want to join the ranks of noble failures, the first step would be ensuring that their message about what they're actually doing stays coherent and relatable.