If you were looking for a new Xbox console to be shown off at the Electronic Entertainment Expo in June, you're going to be sorely disappointed. If you're looking for more life from your Xbox 360, however, that news is just fine.
"There will be no talk of new Xbox hardware at E3 or anytime soon," company spokesman David Dennis told Bloomberg News. "For us, 2012 is all about Xbox 360." So gossip about an "Xbox 720" has been staunched. For now.
That largely has to do with the addition of Microsoft's Kinect motion sensor, a redesign of the Xbox Live online service, and the fact the Xbox outsold Nintendo's Wii and Sony's Playstation 3 throughout 2011. And since the 360 has been around since November 2005, all the tooling has paid for itself: Wedbush Securities analyst Michael Pachter told Bloomberg that he estimates each console sold nets Microsoft about $115 in profit. Not bad for the grandad of the seventh console generation.
That longevity shouldn't be surprising. The last generation already stumbled out of the starting block because Microsoft and Sony tripped over themselves making each console as cutting edge as possible. Xbox focused on its online experience, while Sony ramped up trying to defeat Toshiba in the Blu-ray vs. HD-DVD battle, which Sony partially won by shoehorning Blu-ray players in its PS3s. Both were technically superior machines that initially lost out to Nintendo's Wii because it focused on novel motion controls instead of high-powered graphics, a strategy that eventually proved unsustainable.
Instead, Microsoft and Sony wanted their consoles to be home entertainment centers, making them hard-drive-based and Internet-focused, and featuring expandable media players in ways most gamers scratched their heads at almost seven years ago. Now the idea of having to buy a physical disk is almost anathema to some gamers. These plans were seen as vital to winning the console battle until the next cycle, which traditionally lasts about six years. We passed that mark last year, and there was nary a word on a new box from anyone but Nintendo. That's because the gaming world — and the gamers who comprise it — have changed radically since 2005.
The average gamer is a 35-year-old male, ostensibly married and liable to have little gamers of his own. He also has gaming competition from his laptop, his Facebook profile, his iPad and his smartphone. There is no shortage of outlets. There are shortages of time and money, however, so perhaps speeding up production on the next $600 hunk of hardware isn't a priority for the Big Three's core markets. Younger gamers, evidence is starting to show, don't even care about having a box hooked up to a television, so why bother?
So for now, Microsoft's focus is on exploiting voice and motion controls the Kinect now offers. It is pretty cool being able to play without controllers or telling Netflix what you want to watch, even if the voice-recognition software isn't quite up to speed just yet. There's no need to rush out a marginally updated console like Nintendo's forthcoming Wii U, or fast-track new hardware like Sony is rumored to be doing (Sony's PlayStation 3 was once said to be the company's focus until 2016, but that seems like an eternity when you're discussing market share from third place).
Microsoft shouldn't rest on its laurels too long. It will eventually have to worry about pulling a Sony and losing out on the next console cycle. But currently, there's no need to panic.
And don't worry, manic gadget fiends, there's some light at the end of the R&D tunnel: Pachter told Bloomberg he expects some sort of announcement concerning a new Xbox in 2013 or early 2014. We should all be sick of Kinectimals by then — but we'd better have an easier time talking to Netflix.
— Joshua Gillin writes about video games and entertainment news for tbt*. Feel free to challenge his opinions at email@example.com.