Xbox Series X

Rejoice: Console generations are dead

A new console generation, while delighting most gamers, has long been seen as a necessary evil by the industry itself. If it’s given much thought at all, as new hardware is much like the rising sun to the games industry, being both inevitable and inexorable.

Despite some theories to the contrary, traditional consoles look likely to be a big part of the gaming mix for the foreseeable future. However, the upcoming crop of new hardware doesn’t necessarily mean a new generation as we’ve traditionally known it.

In the past a new hardware generation meant a clean break. A new console, which ran only new games. An entirely new ecosystem that discarded what came before – barring some sticking-plaster efforts to support older titles in varying forms.

In just a few months, we’ll see a new generation of consoles which won’t follow those traditions. The huge install base of current devices will not be left to wither overnight, while the industry struggles to get enough of the new devices into consumer hands to make them a viable target for development.

Instead, a far subtler transition is at hand, breaking the shackles of the generation game, and that’s one death that both the industry and consumers should celebrate. It’s our own Day of the Dead celebration.


James Temperton
James Temperton, digital editor at Wired UK

Wired’s James Temperton, digital editor, who did a deep-dive into the engineering of the Xbox One X, sums up the change:

“Commentators have been foreboding the death of consoles for almost as long as we’ve had consoles. Now, finally, it seems reasonable to suggest that this might be the last true console generation. But think of it more as a rebirth than a death.

“This doesn’t mean that the PS5 and Xbox Series X will be the last big console launches, but it does mean the business case for launching new hulking lumps of metal and plastic has now become more complex.”

But there’s simplicity within that complexity, he adds: “As Microsoft has made abundantly clear, a game is now for life, not just one console generation.”

Microsoft’s name for that is Smart Delivery. Probably the most important part of its recent Xbox Series X announcement. Consumers will only have to buy a game once (digital or physical) and they’ll be able to play it across both Xbox One and Xbox Series devices.

It seems almost certain that Sony will follow suit in this regard. To not do so would hand Xbox a PR coup on the same level as the one Sony scored against the Xbox One, when Microsoft tried to lock down ownership of physical games to specific user accounts – an error that the Xbox One arguably never recovered from.

That means, as far as publishers are concerned, that there is no generation change for the foreseeable future. They can keep selling games, be they boxed or digital, as if nothing had happened. And publishers we’ve spoken to are delighted with this smoothing of the path.

“I’m not sure the platform holders are entirely sure how backward compatibility will impact the transition but overall this should make the transition easier for console gamers,” says IHS Markit’s Piers Harding-Rolls.

And CD Projekt Red were the first to announce that it would support Smart Delivery with next year’s biggest game: Cyberpunk 2077. It’s a boon for a title that could otherwise fall awkwardly between the two generations and one that’s been warmly welcomed by fans.

“The industry is now focused almost entirely on the games as a service model.”


Expect everyone else to fall in line fairly quickly. It’s almost impossible to imagine that anyone will want to return to the mess of the last generation change, where there were a series of paid and unpaid upgrade systems for various titles, but no overarching structure.

And it’s not just new games that will neatly bridge the divide, with Microsoft promising full backward compatibility with all games that run on the Xbox One, with no developer intervention required. You can argue it was always going to be this way, but to have it stated outright, and the incalculable working hours that such a move saves, is still a landmark moment.

It’s of particular importance to games-as-a-service titles, which have to roll on uninterrupted, or else it would cause disastrous friction for their publishers and player base.

“Nintendo aside – because Nintendo has always been very much aside – the industry is now focused almost entirely on the games as a service model,” Temperton notes. “Microsoft and Sony’s upcoming consoles represent almost a premium-tier upgrade, the ultimate way to experience what their respective subscription packages have to offer. But your near-decade old Xbox One will still do just fine.”

Which brings us to the next big question, if you don’t need a new console to play 2020’s big games, as stated to us by Microsoft’s Matt Booty, then will people buy one? And should the broader industry care if they don’t?

“It makes the business of marketing new console launches somewhat tricky. The backwards compatibility and games as a service shift will dent enthusiasm for forking out large sums on new consoles. As a result the PS5 and Xbox Series X instead represent a premium tier experience, and hardware sales will likely reflect this.How – and crucially when – consumer cash shifts will be crucial for each platform’s success,” predicts Temperton.


Piers Harding-Rolls
IHS Markit’s Piers Harding-Rolls

Harding-Rolls believes that despite the clear-cut generational shift, both new consoles are well positioned to outperform their predecessors.

“Although there is quite a lot we don’t know about the launch of next-generation consoles, my expectation is that both PS5 and Xbox Series X will launch strongly if there are no supply constraints and pricing is within an acceptable range, that being $499 or below.

“By strongly I mean that both the PS5 and Xbox Series X will beat the launch figures of PS4 and Xbox One. I hold this view because the PS4 has a significantly bigger active userbase compared to the PS3 back in 2013, which should put Sony in a stronger starting position at launch. I also expect Microsoft to have a much more effective launch this gen compared to Xbox One and to be better positioned to drive early adoption.”

It’s a compelling point, as despite all the changes afoot in this new console generation, both companies look to be in a far stronger position this time around.

But console launches are tricky things, historically only Sony has ever indisputably held a large advantage from one generation to the next (PS1 to PS2). But both the industry, and the companies involved, are now highly experienced at all this.

Of course this is the beginning of a generation like no other, and that will extend beyond the currently announced devices: Xbox Series X and PS5.

“Next-generation is likely to see some switch up in hardware strategy for Sony and Microsoft, for example bringing the rumoured less powerful next-gen Xbox to market at a cheaper price point,” notes Harding-Rolls.

A second Xbox Series console has long been rumoured, Project Lockhart, and MCV/DEVELOP’s own sources have suggested that the Xbox One Series X isn’t the only planned device from Microsoft this generation. It looks like a major turning point, but Harding-Rolls does note that “we’ve already seen this strategy from Nintendo with the launch of the Switch Lite.”

The impact of a possible ‘Xbox Series S’ console would depend upon when it was launched, alongside the X or a year later when the mass-market usually comes around to the idea of new hardware. And how its specification would differ. While it’s almost certainly going to match its sibling in most respects in order to run the same games, it might sacrifice the X’s high-end graphics performance in order to cut costs, and omit its disc drive in order to boost content revenue per unit, allowing Microsoft to sell the device at no margin.

“Two-tier console launches and mid-generation upgrades are now the norm, with hardware manufacturers more interested in getting you to subscribe to their service than buy their new console,” says Temperton.


While console manufacturers have managed to reduce the loss-leading hardware of the past, the increasing prevalence of subscription-based revenue means that new ways to shift consoles are increasingly appealing.

In fact, the Xbox One X and S are already available for no upfront cost, with consumers paying for the console, alongside Xbox Live Gold and Xbox Game Pass, as part of an Xbox All Access package.

And subscriptions services could take over from specific exclusive titles as the main reason to buy one device over and above another. But for the foreseeable future they will only go so far.

“Next-gen, I expect a stronger focus on services to differentiate console offerings,” Harding-Rolls tells us. “It’s clear that Microsoft will be focused on Xbox Game Pass, but only as part of a collection of ways to access content using different distribution and monetisation models. I do not expect a wholesale transition to subscription services. I also expect Sony to continue evolving PlayStation Now. How the platform holders blend their services together and how they are integrated as product offerings will play an important role in engaging consumers.”

And it won’t just be the platforms looking for ever greater regular income, Harding-Rolls adds: “It is likely that there will be more third-party subscription services using consoles and other services, as distribution channels for their direct-to-consumer ambitions.

“The chance of supply chain disruption due to the coronavirus is growing weekly.”


“The entry of new platforms and services means that content windowing will become more active, which is a counterpoint to a general shift towards cross-platform, service-based games.

“On one side we have an industry momentum to break down barriers for access to content and on the other I think it is inevitable that publishers will position their content at different times in different services to drive as much value as possible from their games.”

So we could see something similar to Hollywood’s structure, where consumers are highly aware of the time gaps between initial cinema release, pay-to-play streaming, Netflix or similar, and finally TV broadcast.


Hardware constraints make it unlikely that Microsoft or Sony will push out consoles on subscription plans at launch. Especially given that hardware supplies may be curtailed by the coronavirus says Harding-Rolls:

“The chance of supply chain disruption due to the coronavirus is growing weekly. To assemble optimum inventory for a November launch, I expect both companies to start ramping up production in Q2, so if factories are not back to full capacity by that point there is likely to be some constraint versus optimum shipments in preparation for a launch.

“Aside from the actual assembly of the consoles, it is hard to predict at this stage if the supply chain for components that go into these consoles, several of which will be custom, will or will not be affected. So, although I’m bullish about the potential for next-gen consoles, external events mean that predicting actual sales performance is a moving target at this point.”

In previous generations that could have been a disaster for the industry, but with this softer launch, and 2020’s announced games all coming to current-gen (yet to be confirmed by Sony admittedly) such a hiccup in supply is far from the end of the world – unless, of course, it really is the end of the world. In which case console generations are the very least of our worries.

It just goes to show, that like in life, nothing is truly certain and broader events can easily affect our industry in unexpected ways.

Putting that to one side however, this upcoming hardware generation looks to be the least disruptive to the industry’s day-to-day business than any that’s come before it – and while disruption has been long cherished by some tech-driven markets, I think we can all agree that in the area of console hardware, less is best.

And for those waiting for a prediction on who will ‘win’ this latest console war? Grow up. The industry wins when it has multiple strong, competitive platforms, and that, thankfully, is the most likely outcome here.

About MCV Staff

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