When Apple starts to shelve its stores with the new Apple TV this week, it’s going to put a big emphasis on gaming. Apple’s new streaming box will offer access to video games like “Guitar Hero Live” and “Rayman Adventures,” and users will be able to play with wireless game controllers — just like on a game console.
With that, Apple is more directly competing with Microsoft’s Xbox and Sony’s Playstation. Apple TV isn’t quite as powerful as these devices, but that may not matter to users who are just looking for the occasional distraction between their Netflix binge-watching sessions. Which is why it is so interesting to see how the incumbents are positioning their devices these days.
That’s especially true for Microsoft. The software giant launched its current-generation Xbox One with a somewhat familiar premise two years ago: Xbox One was supposed to be the all-in-one home entertainment system, bringing together live television, streaming services and gaming on one device, with one user interface. It was supposed to appeal as much to Netflix users as to gamers — which is very much how Apple is trying to position its new Apple TV today.
Microsoft tried to bolster its unified entertainment vision by betting big on original content. The company hired former CBS executive Nancy Tellem to head a Santa Monica-based studio, and had plans to produce live-action shows based on game franchises like “Halo,” “Gears of War” and “Age of Empires.”
But Microsoft made an abrupt turnabout when its new CEO Satya Nadella took charge in early 2014. Five months after the leadership change, Microsoft shuttered its original content division, laying of Tellem and her team and putting an end to plans to compete networks and Netflix.
The result of that change in course is that this holiday season, Microsoft is selling a very different Xbox to compete with Apple’s new Apple TV, even though it’s essentially the same hardware as introduced two years ago. “The reality is, Xbox is gaming,” said Xbox Live senior global product marketing manager Mike Lavin during a recent briefing.
This focus on gaming is also key to a major software update that the console will receive next month. Microsoft is going to bring backwards compatibility to the device, which will allow users to play Xbox 360 games on the Xbox One. That’s a big deal, especially for people who have invested in large game libraries, and could potentially convince more users to upgrade their device. “We think that a lot of folks will choose to upgrade,” said Lavin.
Another part of the upgrade is as much about traditional gaming as it is about its future: Xbox will now be based on Windows 10 and the latest version of Microsoft’s DirectX technology, which will make it easier for PC game developers to bring their games to the Xbox, and vice versa. In a way, that also future-proofs the platform for virtual reality, which is especially intriguing as the Oculus Rift headset is about to become available for both Windows PCs and the Xbox One. “It’s the same operating kernel on all of our devices,” said Xbox group product manager Peter Orullian.
But even with its renewed focus on gaming, Microsoft isn’t immune to competition from Apple and others. That’s because gaming itself has evolved, with consumers who didn’t grew up with game consoles or PC games getting into games on mobile devices. For some time, the industry described this trend somewhat condescendingly as “casual gaming.” But these days, lots of people are spending some significant time, and money, on beautifully crafted mobile games.
“The reality is, people love gaming for different reasons,” argued Orullian. Microsoft’s challenge is to appeal to those who don’t describe themselves as gamers without losing out on hardcore gamers. The company hopes that a game-focused pitch will do the trick. Said Orullian: “Our target is people who like to play.”