Home Gaming Microsoft “killed the Xbox One Slim right out of the gate” says analyst firm

Microsoft “killed the Xbox One Slim right out of the gate” says analyst firm

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Microsoft announced not one, but two new Xbox One consoles at E3 this year. First, you’ve got the 40% slimmer Xbox One S which features 4K video playback, HDR and a “streamlined” controller. Next year the more powerful Xbox One, currently codenamed Scorpio, will be released, bringing 4K gaming and Virtual Reality support to Microsoft’s game box.

It’s a confusing message for the average consumer. Should they pick up the Xbox One now, or wait for the higher end version next year? On top of that, just about every major Xbox One game is headed to Windows 10.

It’s this mixed messaging that has Analyst firm DFC Intelligence convinced that Microsoft made a blunder – and is even looking, despite overwhelming evidence to the contrary – of exiting the game hardware business.

“The most immediate problem is Microsoft effectively killed the Xbox One Slim right out of the gate,” they said in an investor update. “If there were many Xbox 360, Wii U and even PlayStation 4 consumers interested in an Xbox One this holiday season they have now been told to wait until Scorpio arrives in 2017. Microsoft can only hope that the buzz around Project Scorpio goes away soon but with the cat out of the bag that is unlikely.

“There are all kinds of other problems with Microsoft’s mixed messaging. The pricing on the original Xbox One is great, and the Slim is wonderful, but all the important new games will be on PC, so why invest in a console? Just upgrade your PC. And if you do want a console why buy now when Scorpio will be here later. All of this is a net dampener on new hardware sales now and really opens the door wide open for Sony and even Nintendo for the NX.”

They surmise that Microsoft may spin off the Xbox brand or sell it off as the brand tries to align with its operating system.

“The biggest issue is whether Microsoft will even have a game division by the time Project Scorpio launched,” they said. “It is no small irony that the E3 events went on at the EXACT same time as Microsoft CEO Satya Nadella was announcing the $26 billion acquisition of LinkedIn.

“The overall question now seems to be not if Microsoft will exit the game business, but when and how. Of course, that leads to many other questions such as how is exiting the game business handled? Is Xbox spun off? Does Microsoft find a buyer? Or does the company just shut Xbox down? DFC feels the latter option will most likely not occur but it is clear something must be done.

“Unfortunately the value of the Xbox brand is in serious flux with much of its advantage tied to the Microsoft Windows 10 operating system.”

I’m not an analyst, and while I do think that the mixed messaging is unhelpful, I can’t help but feel that the Xbox Brand came out of E3 stronger than it went in. Slowly amalgamating Windows 10 and Xbox to become a singular platform, and taking emphasis away from hardware and focusing on Software may be the smartest play the company has done in years.

Last Updated: June 21, 2016

54 Comments

  1. HvR

    June 21, 2016 at 11:04

    When will Microsoft learn that peasants do not want the freedom of choice; they want to be told what to do.

    Reply

    • AliasAlterego

      June 22, 2016 at 00:07

      Actually they just have busier lives and want to go to a store and buy something that is isolated and won’t be causing any confusion; they want a piece of hardware that plays all the games they’re interested in without the hassle of buying by parts and building it (if they even know how to), doing maintenance on it or be distracted by everything else.

      They want a box that plays games and does nothing else. That’s what “peasants” want, because a lot of those “peasants” probably work with computers ten times more powerful than any computer you’ll ever be able to realistically afford on a daily basis and when they get home, they kinda just want to chill on a couch.

      In the vein of being told what to do, I’m going to do the same to you: Go fuck yourself.

      Reply

    • Zubayr Bhyat

      June 22, 2016 at 07:13

      I disagree. I was a PC gamer. I now dislike the idea of buying PC games on the grounds of having a seriously busy life. Yes there were compromises. Yes I had to learn to aim with a controller. Yes, I’m annoyed that the current console generation doesn’t do 60fps for everything. Yes a mouse and KB are more precise. I just choose a PS4 because it boots up fast and starts my games fast. I don’t have to grapple with driver updates / hardware upgrades.

      Recently I bought Far Cry 3 on special for my laptop. Do you know that even until today I struggled to get it work with the DRM systems?

      Time and life choices are a factor here. You know what makes me happy? Project Cars and DIRT Rally on console. PC used to have the best racing sims around. Now we’re finally getting an easy way to play these games.

      That was a pretty inconsiderate comment.

      Reply

      • Darren Forster

        June 22, 2016 at 09:43

        I used to play loads of games on PC, but then got an Xbox 360 and started playing loads of games on that, but since investing in an Xbox One have moved more back to PC gaming as it has improved so much.

        1 – Most consoles now don’t boot instantly, you turn them on and your greeted with a welcome screen “dear user your console is now out of date” – wtf I only updated yesterday!! – “we now need to download a 22Gb update file to make your console work again” – seriously I’m on a 2mb rural broadband line and you expect me to wait nearly all day just to down load 22Gb to play one game – why didn’t it update at night when it was in sleep mode like my PC does?? This sucks!

        2. Steam games and updates can be set to download at night and be ready to play in the morning, ideal if your on a slow connection.

        3. Steam stores all your games online so if you run out of space just install and re- install later.

        4. Steam has some great retro and user built games out there which never make it to consoles but are just great like Trainz and X-Plane (why is there no proper flight sims or train sims for games consoles??), or make it on steam first like Goat Simulator.

        5. A lot of PC games now recognise and use the Xbox One controller so when playing games with the controller, the controls are pretty much the same.

        6. Disney Infinity can be played on PC and it gives you free characters to try every so often, plus if you’ve got a friend that has the console version you can ask for their card codes and both of you can share the content (although sadly Disney Infinity is being discontinued), and there is practically no difference between Infinity on PC and Infinity on Xbox.

        7 The USB ports aren’t in a stupid place – on the Xbox One who thought of putting the USB ports on the side and rear??? The side ones are such a pain because my Xbox One console slides into my computer desk with wood either side so I can’t use the USB ports on the side unless I leave the console sticking out slightly – at present I’ve got the Skylanders base plugged into the side so the console has to stick out slightly, and the rear ones mean fishing around the back of the console to try and find them and trying to guess whether it’s the USB port I’ve got or the HDMI port because they both feel the same (hopefully any future Xbox will reposition those USB ports to the front).

        Reply

        • Zubayr Bhyat

          June 22, 2016 at 13:55

          1. Most don’t, that’s why PS4 has rest mode and Xbox has instant-on 🙂 PC has a similar feature, yet the path to getting games started for me feels more cumbersome.

          2. PS4 and Xbox do the same.

          3. Nice feature. Streaming is better on Steam too.

          4. Got me on that 🙁 I want a flight sim for console.

          5. I get that, still feels slower to get started on PC than on console.

          6. Fine, that’s an exception – though cross-play is yet to happen.

          7. Pet hate of mine when I did have a XB1. PS4 not the case 🙂

          Reply

      • UrbanCr33per

        June 22, 2016 at 10:54

        Agree with you on that … PC gaming and console gaming are not mutually inclusive. PC and console are two distinct and separate markets. PC and console do not compete with each other, because they’re targeting different types of gamers. I was a serious PC gamer for about 18-years (since the i86) … but several factors made me decide to console gaming with the Xbox 360. Chief of these factors being 2 things:
        1). PC gaming has a lot of hassles (hardware, software, installation, DRM, etc) and I really got tired of the hassles. Some PC gamers are ok with the hassles … and for some PC gamers, these are not hassles at all (and they may actually enjoy the effort involved). The other day, I decided out of the blue to install my old purchased copy of Commandos on my laptop … I spent more than 2 hours trying to get it to work on my laptop … searched the web … fiddled with drivers and updates … waded through tons of virus and malware infested “patches” for Commandos. In the end I was so frustrated and angry … it acted as a good reminder of why I abandoned PC gaming.
        2). I am a software developer … I spend at least 8 to 10 hours a day working on PC. PC is work for me. After doing a full day’s work on PC … I really don’t find it relaxing at all to spend a couple more hours on PC at night for gaming. What is relaxing to me is couch gaming on console on my big screen TV … not needing to deal with or look at a PC.
        Anyone who enjoys PC gaming or chooses PC gaming is a PC gamer … I’m not a PC gamer anymore. Anyone who chooses (or has chosen) console gaming is doing so for different reasons. Don’t equate PC gaming with console gaming … they’re 2 different animals. Everyone has different preferences, tastes and requirements … and thankfully, we’ve all got the choice.

        Reply

        • Zubayr Bhyat

          June 22, 2016 at 14:00

          That’s my thing, the hassles for a console gamer differ to a PC gamer’s. Different perspective.

          As for game pirating – after console going legit felt like a streamlined experience. While I loved DX:HR on PC, the console experience wasn’t too much different apart from great mouse + kb controls. That and the wonderful framerates. Not something I’d attempt on the couch while relaxing.

          That’s the thing. I compromised so that I could start a game differently, navigate my home screens differently and it’s enjoyable. The way I see it having a friendlier user experience comes with tradeoffs. If we accept some of them over others, doesn’t make us less prone to choice – just shows what we prefer.

          On a side note – some great PC games like the STALKER series will never work for console because of complexity. The same way, XCOM will never play as well on a console as it does PC.

          Reply

  2. Alien Emperor Trevor

    June 21, 2016 at 11:10

    “but all the important new games will be on PC, so why invest in a console? Just upgrade your PC.”

    Except they don’t want to upgrade their PC because PCs are more difficult to use. That’s what I always heard… at least until the exclusives weren’t so exclusive anymore. I’m starting to find this hilarious – they’ve been fibbing all these years it seems.

    Reply

    • Fox1 - Retro

      June 21, 2016 at 11:13

      Previous iterations of DX haven’t been as drilled down as DX12 is how I see it. Forza 6 Apex is the most gorgeous racing game ever created and it runs 1080p/60fps easily on my 2 year old R7 260X.

      Reply

      • chimera_85

        June 21, 2016 at 15:50

        O n high or what? I can get 1080/60fps on some high, some medium settings with my GTX 960.

        Reply

      • John

        June 21, 2016 at 17:11

        Built my computer 3 years ago on a budget and even my AMD 7770 can run most games on a mixture of medium/high settings. I’m tired of the myth that PC’s are much harder to use/build. One: there are tons of resorces available to help with that, Two: I haven’t had to do anything to my PC since I built it. I do understand that consoles have their place (hell I have am Xbox One myself) but if people think that the Scorpio which will be an overpriced, closed OS, that can’t be upgraded or modded (I’m talking about script extenders) will be better than a PC then they are slim dofor some dissapointment

        Reply

  3. Hammersteyn_hates_Raid0

    June 21, 2016 at 11:10

    This is almost like when Sega brought out the 32X, which failed horribly because people knew the Sega Saturn was a few months away.

    Reply

    • Fweds

      June 21, 2016 at 16:01

      Eh, this is a bit different the 4k player capabilities alone are equal to a £400-600 standalone player, you may as well say blue-ray had no effect on sales of the PS3.
      If Sony’s Neo isn’t at least as powerful as Scorpio then you may as well put that in the 32x bracket as well and whatever Nintendo release.

      Reply

      • Hammersteyn_hates_Raid0

        June 21, 2016 at 16:05

        Sony better step up then, but seriously, who’d buy a slim if there’s a more powerful console available? All you need to do is save a couple of months longer

        Reply

        • Vertigo X

          June 21, 2016 at 21:41

          It’s cheaper and you’re playing the same games?

          Reply

        • Gareth Lagesse (eXCheez)

          June 22, 2016 at 07:25

          People who want to buy a console but don’t want to buy the R10k Scorpio will buy the R3k S. I don’t understand how people aren’t getting this.

          Reply

          • Hammersteyn_hates_Raid0

            June 22, 2016 at 08:39

            How, just how is there a R7K price difference? Are they smoking crack?

          • Vertigo X

            June 23, 2016 at 14:27

            However much money it costs, it will be more expensive. Not only that, but it comes out a year later.

    • Darren Forster

      June 22, 2016 at 09:50

      Funny you should mention the 32X – I have every mainstream sega console that was released in the UK right from Master System II (interesting point does anyone ever remember a Master System I or did it always start at II and what was the difference, I know mine came with Alex The Kidd when you turn it on) up to Dreamcast, and even a MasterGear for the Game Gear but the only exception is the 32X and MegaCD for the Megadrive.

      Reply

      • Hammersteyn_hates_Raid0

        June 22, 2016 at 10:12

        I also had the one with Alex the Kid 😀

        Reply

  4. Fox1 - Retro

    June 21, 2016 at 11:11

    Yes, but was does Patcher have to say?

    Reply

    • Hammersteyn_hates_Raid0

      June 21, 2016 at 11:13

      When does he not have something to say?

      Reply

      • Fox1 - Retro

        June 21, 2016 at 11:14

        He has been as quite as the Banana lately 😛

        Reply

        • HvR

          June 21, 2016 at 11:15

          Banana had lots to say last week but I was the only one that talked with him

          Reply

          • Fox1 - Retro

            June 21, 2016 at 11:17

            Oh yes, I did discuss politics with him regarding Brexit.

          • The Order of the Banana

            June 21, 2016 at 13:38

            Guys… guys… there’s plenty of banana for all of you!

    • Alien Emperor Trevor

      June 21, 2016 at 11:14

      Nintendo is dead, this is the last generation of console gaming, mobile gaming is the future. I think I’ve hit all the main ones.

      Reply

      • Fox1 - Retro

        June 21, 2016 at 11:15

        The crystal ball is stuck on repeat!

        Reply

      • The Order of the Banana

        June 21, 2016 at 13:39

        I’m still hoping that they pull their heads out of their collective arses and make the NX a machine to be proud of. I like pokemon. I like Mario, and I would like my young son to grow up with a healthy dose of Nintendo gaming.

        Reply

    • Geoffrey Tim

      June 21, 2016 at 11:14

      Pachter. Putting the Anal in analyst.

      Reply

      • Pariah

        June 21, 2016 at 11:15

        Analyst is just an amalgamation of Anal and Cyst.

        Reply

  5. Pariah

    June 21, 2016 at 11:13

    Huh? They’re investing heavily in games and gaming, while I agree that the Slim might not be successful, the gaming division seems to be going from strength to strength at the moment. Bloody hell.

    Reply

    • Matthew Holliday

      June 21, 2016 at 11:46

      if the slim replaces the xbone entirely, then sure it will work.
      the price point differences between the scorpio and slim will make gaming seem more accessible.

      Reply

      • Pariah

        June 21, 2016 at 11:57

        Perhaps, but I’m not so sure the first world has the same issues about price that we do tbh. :/

        Reply

        • Matthew Holliday

          June 21, 2016 at 12:14

          Everything is expensive everywhere, we may feel it a bit more because of the exchange rate, but people work hard to make ends meet, no matter where they live.
          100-200$ is alot of money in any country.

          Reply

  6. AfricanTime

    June 21, 2016 at 11:28

    or they are trying to kill off the consoles all together.

    Reply

  7. Matthew Holliday

    June 21, 2016 at 11:35

    “just upgrade your PC” he said
    lol.

    The slim comes in at a different price point, whether or not there is value in the slim compared to the xbone is one thing, but the announcement of the Scorpio has almost nothing to do with the slim, the price points will just not be comparable.
    Money rules the world, theyll both sell because not everyone can afford a scorpio and a scorpio is not necessary to game.

    Reply

  8. Pieter Kruger

    June 21, 2016 at 12:08

    No, I don’t think it confusing at all or that they’ve “killed” the Xbox One S, but maybe that’s just because I see choice as a good thing! So if you want to get an Xbox, play games, play some 4K movies etc. get the Xbox One S. If you’re interested in VR, 4K gaming etc. wait for the Scorpio. Budget is also a huge factor here. If you can’t afford a 4K tv, VR or 4K Scorpio you will still be able to play all upcoming games on your Xbox One S. Same with Sony, if you’re not interested in 4K video playback or VR just buy the PS4 and not the Neo!

    Reply

    • Maji de?

      June 21, 2016 at 12:26

      finally someone who understands what the “New” generation is all about

      Reply

    • Revolver Ocelot

      June 22, 2016 at 09:13

      I have a better, less confusing arrangement: get a PS4 for quality exclusives and cost-accessible VR, get a PC for high-end VR, multiplats and the few MS exclusives that exist and ignore the Xbone because it’s garbage.

      Reply

  9. Viking Of Science

    June 21, 2016 at 12:42

    Killed the XBoneS, Hardly likely, With what they’re touting the Scorpio will be capable of, It’s Going to be, at least, a $800-$1000 Box, If they Sell at a loss. (Using current GPU/CPU Specs capable of 4K etc.)

    When Scorpio Launches, It’ll be like the Elite controller, An Expensive bit of kit, that only Die-hard XBoners will Pony up for.

    Reply

  10. iusedtobe(a)regular

    June 21, 2016 at 12:45

    I doubt if MS knows whats going on at the moment but I think these people are on to something though.

    Reply

  11. Kikmi

    June 21, 2016 at 12:53

    Well, we all know Scorpio is likely going to cost one hell of a price, but didnt we already try the all in one console/pc thing with the steam machines? Which crashed and burned like Tshwane is right now? I guess price point is going to be a pretty big player in this scenario

    Reply

  12. Ghost In The Rift

    June 21, 2016 at 13:20

    But hurt Xbone fans will stay but hurt, its the way of live now and not surprising.

    Reply

    • The Order of the Banana

      June 21, 2016 at 13:37

      Life would just not be the same without butthurt Xboner fans.

      Reply

      • Ghost In The Rift

        June 21, 2016 at 14:13

        Good old Synergy, and that’s in no way related to that green shit from ME3.

        Reply

  13. Darren Peach

    June 21, 2016 at 14:16

    Analyst, Gamers don’t make rational life choices. Maybe MS were counting on that.

    Reply

  14. DrKiller

    June 21, 2016 at 14:42

    Maybe Sony will be in line to buy the design for a proper controller 😉

    Reply

  15. chimera_85

    June 21, 2016 at 15:50

    Yeah dumb move from them.

    Reply

  16. AliasAlterego

    June 22, 2016 at 00:04

    “(…) taking emphasis away from hardware and focusing on Software may be the smartest play the company has done in years.”

    Y’know, exactly the OPPOSITE of what Microsoft has been doing, by developing not only one new console model, but two, plus a universal store app for the PC.

    Reply

  17. John Pombrio

    June 22, 2016 at 03:24

    It will be a year and half before any new console comes out. that is a long time. If you use the new console enough, you get your money’s worth.

    Reply

  18. Uberutang

    June 22, 2016 at 10:55

    I really do not under stand the confusion.

    If you have a HDR/4k TV and you want to Netflix on it now, you get the S. It does that.
    If you want to game at HDR/4k.. then you wait for the new one in 18MONTHS (or more for ZA).

    I bought a new 360 to get HDMI support! I had to buy a optical sound dongle for my 360. I bought yet another 360 for a bigger HDD… this is NOTHING new to console gaming.

    Reply

  19. Michelle

    June 22, 2016 at 15:22

    Uhhh is that guy for real???
    MS and Sony are the TOP competitors in gaming, they have millions of users,MS will never leave the gaming sector.

    Reply

  20. LaDarryl Harris

    June 25, 2016 at 06:00

    The consoles we enjoy today have taken on a new format from the old format pre xbox 360. I thought true Pc gamers would understand this but they are to busy talking about the specs, hardware and Fps of their rigs and don’t enjoy their games because they are to busy running benchmarks to see who has the coolest rigs!! I am a Pc gamer and I know this all too well . The console industry is killing the PC gaming space and Pc gamers are its last plea efforts to keep hope alive. Being a Pc gamer can be a hassle because of the money spent, driver updates and upgrading hardware when the next GPU or CPU comes out that is better than the old (Who is getting a GTX 1080 for $647?). Plus the social side of the Pc gaming side sucks!!!!!!!! There are to many platforms on PC and therefore if I want to play a game of battlefield 4 with my son I have to sign into Origin. If I want to play a game with another friend I have to jump to steam or to communicate I have to send a message get tired of seeing messages on my game stream while trying to game because pc doesn’t have a true viable chat option because of platform competition. The biggest mass of gamers are non PC gamers (mobile,console) and they are people who don’t know how to install hardware or what GPU to buy and yes they is tons of info out their but the bottom line is they don want to learn how to. Before you Pc gods say they or we are lazy because we don want to make the effort to learn or do these things remember you are sitting at you desk wit a mountain dew and some chips too. Console use to be one console fits all for years ntil now and this is the reason we have the Xbox One and PS4 / Xbox Scorpio and PS4 Neo . Two different version of the same consoles from two different companies (Microsoft and Sony). One more powerful than the other but yet on more expensive then the next due to its hardware specs. Excuse me but doesn’t that sound like the PC’s that exist in the Pc Gaming space? If you want to play games in 1080P 60fps max settings buy this GPU but if you want to game in 4k you need this GPU or these 2 together in sli / crossfire. You have that same option in the console space and it will advance over time I can promise you that . PC gamers are worried and I understand now as we don’t have an argument over graphics and FPS which is proven by digital foundry’s (love them guys) comparisons between pc and console games . Also before you go off with the 110fps max settings and the like let me shoot that down now. The eyes are only capable of seeing around 60 fps before motion blur kicks in so 80,90,100 and anything above it doesn’t matter! Bottom line is People don’t want to deal with the hassles that are associated with PCS that go beyond gaming. They don’t want to come home sit at a desk and for hours distracted from family or installing this and that or spending this for that to make this do that! They just want it to work and play games in the least amount of steps as possible while sitting in the living kicked back on the couch and with family while not being secluded from family. The biggest amount of gamers don’t even have laptops or Desktops. They have tablets and Cellphones that do what they need it to do. How many of us know of at least one person in our circle that bought laptops or desktops just so they could get on A.O.L. chat rooms, listen to music, download songs, play spider or mine sweep? 2016 you can do all that in the palm of you hands and we are around 23 years removed from that!!! Technology is moving at a rapid pace and before you know it console will be a thing of the past as VR is giving us a glimpse of the things given the fact that hardware is getting even more powerful and efficient . I’m surprise that pc gamers
    are still in the fold given consideration to how much money developers are losing in the pc space. Cracked games all over the place and pc gamers thrilled off the idea of free games. I know having free games is awesome and I by no means stand against that but game developers biggest problems are because of lack of funding which result in cheap and poorly made games. You cant make great games if you don’t make profits simple as that. There is a reason developers develop for consoles first then port it to the pc and that’s the same reason they develop for Apple and Android before anything else!! That’s where the money is at now!!! I poured over $2000 for my setup and as much as I hate to say it because of what I put into my rig but the Pc gamer is at a crossroad because console are getting closer to the things we relish the most and that beautiful graphics and 60fps of smooth gameplay at a reasonable price to those who want to game hassle free. We either embrace technology and where its going or complain and be like voices in the forest, heard but not seen. Who remembers that that old saying “Ya but can it play Crysis” ? New phrase ” Ya but was the game?” . I mean isn’t that why we buy the hardware anyway?

    Reply

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