Microsoft, It’s Time for Xbox One S and an Entertainment Set-Top Box

Microsoft originally planned to ship two Xbox One consoles, one for gaming, and one for living room-based entertainment. But in dropping the latter device, the software giant has missed out on a huge opportunity. And I think it’s time to revisit the notion of a much less expensive Xbox One.

The thing is, I don’t think the original plan makes any sense anymore.

You may recall that in the build-up to the Xbox One release in 2013, I was actually the only source of real information about Microsoft’s plans. This was thanks to a well-placed source. Who told me in January 2013, months before the Xbox One launch, that Microsoft planned to make two Xbox vNext consoles:

Durango. This is the Xbox One we all know and love: A full-featured, high-end console that was based on Windows 8 Core and would ship in November at $499 or for $299 with a subscription, an option the firm also later dropped. Durango would include Blu-Ray, and “must be internet-connected to use.” (We all know how that went.)

Yuma. This entertainment-only version of Xbox vNext—a “non-gaming device,” I was told—was a compartmentalized version of Durango that removed the expensive hardware required for gaming.

Additionally, Microsoft was at the time planning a new Xbox 360:

Stingray. Launching alongside Durango, this was a redesigned Xbox 360 (existing platform) that would be less expensive than the Xbox 360.

As you know, Durango and Stingray both shipped, and both are still in market. But Yuma remains a mystery, and by the time Xbox One was officially announced—Microsoft kept pushing back the date in early 2013—Yuma was canceled.

Two years into the Xbox One life cycle, there have been repeated calls from fans for a cheaper and smaller Xbox One. Microsoft responded to the cheaper bit by removing Kinect from Xbox One and eventually dropping the base price of the console down to $350, a savings of $150.

But the Xbox One remains a beast of a box. It’s humongous, even bigger than the first, tank-like original Xbox. And if you’re like me, and like to bring your Xbox with you so you can game elsewhere—see For the Love of the Game: Going All Digital on Xbox 360 for details—the Xbox One just doesn’t cut it. The thing is just too unwieldy.

“Fixing” the Xbox One is obvious enough: Over time, component prices fall, component makers consolidate chipsets, and so, and Microsoft can easily release smaller, quieter Xbox One versions over time, just as they did with Xbox 360. One might argue that holiday 2016—three years into the Xbox One life cycle—is an excellent time for the first major revision.

Some others have argued for a “digital-only” Xbox One that would shave space and cost by removing the Blu-Ray drive. The theory here is that users could go digital-only with games—as I do, actually—thus making the Blu-Ray superfluous.

Sadly, I think removing the Blu-Ray drive would be a mistake. Likewise, and in a Catch-22 type situation, I also think making an entertainment-only Xbox One—like the original Yuma design—would be a mistake.

Here’s why.

With regards to the Blu-Ray drive, gamers need that choice, as does anyone looking for an entertainment box. Given the lameness of Microsoft’s entertainment services, dropping the Blu-Ray drive would be a huge mistake: Customers can get Netflix, Hulu and other services on tiny, silent and inexpensive boxes like Roku, Fire TV and Apple TV.

With regards to entertainment, it is the success of Roku, Fire TV and Apple TV that makes a smaller Xbox One so untenable. A smaller Xbox One would still be a big set top box. And it’s not clear that such a thing could be truly inexpensive, or silent for that matter.

So. Here’s what Microsoft should do.

Release a smaller, less expensive Xbox One console that includes a Blu-Ray drive. This Xbox One S, as I think of it, would replace the existing console in the market and should be roughly 50-60 percent the size if possible, pizza-box shaped as in the image above, or more cube-like. But it would be a full-featured console, just like the current version. $300 sounds about right.

Release an inexpensive Microsoft-branded set-top box for entertainment. Xbox is no longer Microsoft’s entertainment brand, so drop the Xbox—and the expectations of gaming—and provide a Roku-type (and priced) box that delivers Groove and Movies & TV experiences alongside Netflix, Hulu and the rest. No gaming. Price it below $100.

Microsoft, this is overdue. Make it so.