If conclusive proof was needed of just how badly Microsoft has blown its previous dominance of the videogame business, the company’s overture this past week to rivals on interoperable online play is surely it.
The software giant kicked off the annual Game Developers Conference in San Francisco with the surprising offer of making its Xbox games compatible with “different online multiplayer networks”, which would include Sony’s PlayStation 4 console and Valve’s Steam platform on PCs.
Such a scenario would be a gamer’s dream. Friends could play Call of Duty or Fifa with each other regardless of what hardware they were using, rather than being limited to the same platform.
The only obstacles to Microsoft’s plan are Sony and Valve, neither of whom have much incentive to take up the offer. Indeed, while many gamers might love the suggested interoperability, it is Microsoft that stands to gain the most, which is why it might not happen.
Xbox consoles have always been the Trojan horse for the company’s desire to be the computing centre of the living room. After failed bids in the 1990s to sell consumers on clunky and expensive media servers, Microsoft finally found its beachhead in games.
Released in 2001, the Xbox was reasonably priced and delivered mega-game franchises such as Halo and Gears of War. Its success opened the door for Microsoft to peddle music, TV shows and movies to consumers via the console’s online connection.
By the early 2010s, Microsoft was the pre-eminent name in gaming. From 2006 to 2014, Nintendo sold more Wii consoles, about 100 million, but it was the Xbox 360 – the successor to the original Xbox – that was preferred by core gamers, or the kind who like shooter and sports games. Microsoft’s 84 million units beat out Sony’s 80 million PlayStation 3 consoles and the Xbox 360 had the highest “attach rate”, or number of games sold per machine.
As the eighth generation of consoles arrived in 2012, Microsoft pressed its advantage to further its aspirations of owning the living room, and in doing so committed several cardinal mistakes.
The company positioned the 360’s successor, the Xbox One, as the all-in-one entertainment device it always wanted. Voice-activated TV controls and interactive NFL football programming were highlighted in its debut press conference, ahead of videogames.
Gamers were further alienated as the company insisted on bundling Kinect with the Xbox One. Kids enjoyed the gesture-control peripheral, but core buyers found it extraneous and resented how it boosted the overall price tag. Xbox One’s debut price was US$499, or $100 more than PS4.
Lastly, Microsoft insisted its new console would require a constant internet connection, which would eliminate the ability to play used games. Gamers angrily rebelled and flocked to the rival PlayStation 4, even after Microsoft backtracked.
The company has been paying for its missteps ever since. Sony has sold 36 million PS4 units worldwide since ts debut in 2013 – its fastest-selling console in history.
Microsoft is no longer disclosing unit sales, but estimates place its total at about half of Sony’s.
Sony devoted its efforts at GDC to promoting its upcoming PlayStation VR headset, which will go on sale in October worldwide at $499. The company expects to have 50 virtual reality games available by the end of the year. That will put it firmly into competition with rival VR systems from Facebook’s Oculus Rift and HTC’s Vive, which is being developed in conjunction with Valve.
Microsoft is instead betting on augmented reality – not virtual reality – with its HoloLens headset. Rather than placing gamers into virtual worlds as VR does, AR overlays computer graphics on to the real world.
It’s a risky bet, given the high-profile flop of Google’s Glass AR a few years ago. Game developers busy working on VR projects for Sony, Oculus Rift and HTC also might not have the time or resources to set aside for something entirely different. Microsoft is thus running the risk of becoming like Nintendo, where it has a hardware platform largely bereft of third-party games.
Microsoft isn’t yet in dire straits when it comes to games, but it is getting there. Reaching out with an offer of enabling cross-network play would have been an admirable move a few years ago when it was leading the market, but at this point it looks like a transparent ploy to stay relevant.
Gamers and the company’s rivals surely know that.
Peter Nowak is a veteran technology writer and author of Humans 3.0: The Upgrading of the Species.
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