Microsoft's Xbox One masterplan

For months now, the pressure has been on Microsoft to unveil a next generation gaming console that not only trumps Sony’s PS4, but clearly articulates the company’s vision for the future of the multi-billion dollar video game industry.

As a result, rumours started to pile up about what kind of device Microsoft would release to the market. The launch of the Xbox SmartGlass at the gaming mega-conference E3 last year hinted that it may abandon the console market altogether and focus on a more mobile-focused approach. Such a move certainly made sense given estimates that mobile-based gaming may outpace console gaming in the next decade.

But, to the joy of many its hardcore fans, the company has stuck to what it knows best and overnight  revealed a new system that keeps console gaming alive, but also steers it towards a relatively unexplored direction.

It’s not just a gaming console

On the surface, the Xbox One feels like a carbon copy of its predecessor. It even looks like it. But its features also reveal Microsoft’s new intent, the Xbox One isn’t just a gaming console. It aspires to be something far more important.

On top of the game-playing functionalities, the Xbox One will also serve as a TV tuner, a Blu-ray player, a conduit for Skype and even a hub for other services like Netflix and cable television. The idea is make the Xbox One the one system to replace all other devices under your TV.

This tactic isn't exactly new but the Xbox One is a sign of Microsoft getting serious about the trend. The Xbox 360 and its rivals – the PS3 and the Wii U- already have similar capabilities. However, the major difference now is that Microsoft seems willing to harness its marketing and cloud infrastructure muscle to carve open a new market for the console.

To this point, the company queued up Steven Spielberg at its launch event to announce an exclusive TV series that will only viewable on the new Xbox console. And to make die-hard Xbox fans salivate just that little bit more, it will be based on the popular video game franchise, Halo.

All in all, Microsoft wants consumers to think that you don’t have to be a gaming fan to buy an Xbox One. And this time around, it has realised that it needs to bundle exclusive features and content in order to push this agenda.

The future of gaming

There are two other points about the console that hint at Microsoft’s long term ideas for the future of gaming.

The first is a new system that serves as the next step towards a digital distribution model for video games. Rather than having to insert a disc every time you want to play a game, the Xbox One will install any disc-based games onto its hard drive so you won’t have to use the disc again.

It’s not quite the leap to digital-only distribution that some were hoping for, but it’s another step forward and paves the way for such a model within the next decade. As with the PS4 launch, this news should put video game retailers on notice.

The second point revolves around the fact that the Xbox One won’t be able to play old Xbox 360 games. The decision to cut out the backwards compatibility of this console has been sold by Microsoft as a technology issue, in that the console’s advanced systems can’t cope with older games.

But leaving that reasoning aside, the move actually makes quite of a lot of business sense for Microsoft. When Nintendo announced that its Wii U would be backwards compatible Wii games, the value of the original Wii console fell through the floor. Backwards compatibility would be a rather handy feature for gamers who have invested rather heavily in the Xbox 360, but this decision leaves the door open for the company to continue to reap some – albeit reduced – profits from its old console.

It’s way too soon to tell whether this console will be the hit that Microsoft is hoping that it will be, but the Xbox One does show that the company has been thinking long and hard about the gaming industry. Which realistically is the best outcome anyone could hope for given the uncertain future it faces as a result of new innovations and disruptive technologies.