Microsoft has unveiled the Xbox One which will go on sale later this year. The next-generation console was shown off alongside a new Kinect camera-and-voice sensor and a redesigned gamepad.
The US firm described the voice and gesture-controlled machine as an “all-in-one” system offering games, live TV, movies and music.ors
The firm’s Entertainment and Devices Division accounted for $9.6bn (£6.3bn) worth of sales in Microsoft’s last financial year.
That only represented about 13% of its total revenue for the period – but one analyst said the importance of this launch should not be underestimated.
Will it be a game changer?
It’s about far more than games – that was the key message from Microsoft’s Xbox One event.
In its eagerness to stake its claim to be a major force in the living room it was nearly half an hour before Microsoft executives got down to showing off the console’s prowess as a games machines.
Instead they gave us quite an impressive demo of its other capabilities, from calling up live TV to making a Skype video call.
Unlike Sony, whose PlayStation 4 event earlier this year proved something of a tease, they showed us a box – albeit quite a chunky inelegant one – within the first five minutes.
But in its determination to build the “all-in-one entertainment system for your living room” Microsoft is taking a risk.
It’s the hardcore gamers who queue up for new consoles – and if my Twitter stream is anything to go by, many were not impressed.
“Terrible stuff,” wrote one.
“My guess is that the Xbox reveal will be universally slated.”
Microsoft, however, having once bet that the PC would become the centre of home entertainment, now needs the Xbox to take on that role.
For Steve Ballmer and his company, this is no game – it’s a battle for the future.
“Microsoft is very strong in business software and the enterprise cloud business, but its consumer businesses are facing tremendous challenges: PCs are declining rapidly and Windows Phone handsets have only a fraction of the market shares of rivals,” said Jia Wu from consultants Strategy Analytics.
“Xbox represents Microsoft’s core strategy in the consumer entertainment market, especially after it sold its Mediaroom video distribution business to Ericsson earlier this year.
“This is also the unique asset which Microsoft has that can differentiate itself from Apple, Google and several of the other large tech companies. ”
The new machine sees Microsoft add a Blu-ray drive and Skype functionality to its console, built in feedback into its gamepad triggers, and upgrades its Kinect camera sensor to 1080p high definition resolution.
It said the Kinect would allow the device to better analyse body movements allowing users to more accurately control game characters and navigate other entertainment options.
“When you’re exercising, it can read your heartbeat,” claimed the firm.
New tools will also allow users to record and edit gameplay so clips can be easily uploaded to the web.
EA Sports was first to announce new titles for the machine revealing Fifa 14, Madden 25, NBA Live 14 and the fighting game UFC would all launch on the platform within the next 12 months using a new games engine called Ignite.
It said the new machine allowed it to carry out four times as many calculations a second as the Xbox 360 and 10 times more “animation depth and detail”.
Microsoft Studios also revealed that Forza Motorsports 5 – the latest in its own racing car franchise – would be available when the console launched.
The division added that it planned to release 15 games within the console’s first year, eight of which would be new franchises.
Another Microsoft unit, 343 Studios, revealed it would release a live-action Halo television series co-developed with movie director Steven Spielberg.
Activision also provided a first look at the next title in its Call of Duty series – Ghosts. It will use a new games engine to take advantage of the latest console’s improved graphics capabilities, offering more detailed textures such as human skin. The title will also be released on rival platforms.
“The integration of voice and gesture control with social features and real-time sharing are crucial and create the opportunity for consumers to have a complete entertainment hub of which Xbox is the epicentre,” said Fred Huet from research firm Greenwich Consulting.
“Combined with exclusive video content, Microsoft stands in a prime position to make valuable market gains in the increasingly competitive and profitable connected TV space.”
Microsoft is planning to launch its new console at a time when many video games makers are trying to reduce costs.
Electronic Arts, Square Enix and Activision Blizzard are among firms which have announced layoffs over the past couple of months.
But the updated machines may put the companies under fresh strain.
Games engine developer Epic has warned that if studios want to take full advantage of the advances in graphics power that will be available, then their design costs could be double what they were when the Xbox 360 and PS3 launched.
“The additional rendering capabilities of these consoles will demand larger budgets for the marquee high-end games,” said Lewis Ward, video games analyst at tech research firm IDC.
“That creates a risky proposition for developers.
“But the costs are going to be mitigated to an extent – studios have said it will be easier to make games on next-gen platforms because they’re going to be closer to the development environments that are common on the PC side.”
Mr Ward was referring to the fact that Microsoft has decided to power its machine with an x86-based CPU (central processing unit) rather than continue with IBM’s PowerPC technology. The move means its console will run off a chip that is similar to the that found in most PCs.
Sony has also opted to switch from its proprietary Cell processor tech to the x86 architecture meaning, in theory, it should be easier to port a title across different platforms.
However, the move means neither machine will be backwards compatible with the former generation’s catalogue of games.
Sony held its a press conference in February when it revealed details about its upcoming PlayStation 4 – but it has still to show off the console itself.
Both Microsoft and Sony plan follow-up “keynote” announcements at the E3 trade show in Los Angeles on 10 June.
Nintendo launched its next-generation console, the Wii U, last year and has said it will not host a major press conference at the event.