With Games, Microsoft Already Has its Head in the Clouds

Rewatching Microsoft's E3 press conference, I'm struck by how little the firm talked up its hardware advantages. Is this is a sign?

I mean, think about. Microsoft has a decided advantage over Sony when it comes to how powerful its current-generation console lineup is. It has the superior controllers, too, with its high-end Elite controller and accessible Adaptive Controller.

And that's just the present: Microsoft also confirmed my story that it was working on a next-generation Xbox console generation. And it expanded on that news by revealing that this coming generation would be a "family" of products. Meanwhile, Sony is quietly winding down PS4 production and has nothing to say about the future.

Despite all this, Microsoft's E3 press conference focused almost exclusively on games. There was no talk about Virtual Reality (VR) or Mixed Reality (MR). Nothing about a second-generation Elite controller. And no real details about whether the next Xbox "family" would be new generation Xbox One hardware or something new and different.

One might argue that Microsoft's lack of hardware news was informed by past complaints about E3 hardware announcements. Purists, after all, demand tradition, and the tradition at this show is to talk up games.

Bullshit. What E3 is really about is one-upping the competition. About getting gamers excited about your platform. And Microsoft deliberately skipped a chance to tout its current and future hardware advantages over the market leader. And it chose instead to focus on the key reason it is losing in this generation of consoles, games. Come on.

So I can only come to one inescapable conclusion: Microsoft has already started scaling down its Xbox hardware ambitions. Microsoft's future in gaming, as I had already assumed, is more about delivering games from the cloud than it is about hardware. This is where its real effort lies. And its real chance for success.

Polygon published an interesting piece called Everything Microsoft has said about the next-generation Xbox that focuses largely on the firm's hardware plans. But there's not much solid information to work with.

The new Xbox consoles---with an emphasis on the ending "s"---will "set a new benchmark of console gaming,"Xbox chief Phil Spencer said during the press conference. This says to me that a cost-reduced Xbox One X will become the new base unit, replacing the Xbox One S. And that a higher-end Xbox One (X2 or whatever) will deliver more consistent 4K graphics at more consistent frame-rates while being 100 percent backward compatible.

Read between the lines a bit more, however, and you can see that Microsoft's positioning of the Xbox consoles isn't changing. That is, future Xboxes will continue to trail gaming PCs from a performance/quality perspective. And will continue to be more powerful than mobile devices and set-top boxes, including those that will be able to stream games over Microsoft's coming Xbox service.

But that Polyg...