At the end of this year’s E3 conference in Los Angeles, one thing seemed clear: although a lot of journalists left feeling that Sony had “won” the hype war with its games-focused press conference, everyone was actually talking about Microsoft. The company choose the event to announce, not one, but two new consoles: an updated version of the Xbox One with a simple “S” suffix, and a more powerful upgrade – codenamed Project Scorpio – due out next year.

The question on a lot of lips was, why? Why did Microsoft start its press briefing with Xbox One S, promising 4K compatibility, a new 40% smaller body and support for HDR gaming, only to apparently undermine the package by revealing Scorpio at the end? Due in late 2017, this intriguing iteration packs in eight CPU cores and promises six teraflops of processing power. And while Xbox One S will run 4K movies and promises to upscale games to that resolution, it’ll be Scorpio that delivers true, native 4K gaming. So why not keep it secret for a few more months? Why instantly cannibalise the Xbox One S market before it has even launched?

Phil Spencer, the man who’s been in charge of the Xbox business plan since Don Mattrick’s ignoble departure in July 2013, has a stock answer for this. “I mean, there are definitely business minds that would say, ‘You should keep everything as close to the now-now-now answer as you can’,” he says. “Talking about the future is always a challenge.”

OK, so why do it, and why now? “Creators, given time, will come up with amazing transformative ideas that I’m not smart enough to come up with,” he says. “So sharing the vision with our creative partners and our internal teams, putting the tools and the capability out there, will lead to those breakthrough experiences. There are now games like Rocket League, where I can play against people on a different platform. That is one of the ideas that people have definitely been thinking through. Being able to detail our vision and talk about it here at E3 will kickstart those conversations, and I know you will see some of the best creators thinking through ideas just like that.”

In short, Spencer wanted to use E3 to reach the whole development community and pique its interest in the new hardware. Of course, the counter-argument would be that Microsoft could have done that in secret, with a whole bunch of NDAs, but then, the industry has changed a lot, even since the last hardware generation. There’s much more appreciation for – and even reliance on – the vast, global independent sector, and it’s unlikely Microsoft would have kept its new platform secret for long while communicating with such a large community. So the thinking was perhaps, why not go big? Why not light the powder keg at the biggest show in gaming?

Meanwhile Microsoft remains confident in its Xbox One S proposition. The company has seen the decent uptake of 4K televisions, and knows consumers are looking for compatible content. “A lot of people are missing the fact that Xbox One S is a 4K, UHD physical Blu-ray player too,” says Mike Ybarra, director of program management for Xbox. “Well, those are retailing at $399. With Xbox One S, at $299, you’re getting 4K Blu-ray, a 4K upscaler for games and video, it’s 40% smaller than Xbox One, and has the power supply built in. I think people are going to be blown away when they see HDR games and video, frankly. It’s a pretty big difference.”

Facebook Twitter Pinterest The Xbox One S is smaller than the original, can be stored vertically or horizontally and has features like an IR blaster for a remote control. Photograph: Kevork Djansezian/Getty Images

But with a huge majority of consumers still playing games on standard HD televisions, is 4K compatibility really a selling point? Spencer thinks so – and he claims the developers themselves helped set the specifications required. “When we look at what’s happening from a hardware and games capacity in the PC space, 4K gaming has become a real benchmark,” he says. “So when we were talking to gamers about what they expected, 4K was a natural next inflection point for hardware. We talked to the creators about the capability they needed in order to deliver games at 4K and at great frame rates. Six teraflops was what they told us.”

“We had the ability to look at doing an interim console this year if we wanted to. We thought about that. But we didn’t think we could deliver, with the silicon that’s out there, a true 4K gaming six teraflop machine this year. So we decided to wait until we hit the real spec that people were asking for.”

The seven-year cycle is dead

What’s clear is that the old console model – the seven-year cycle – is dead for Microsoft and Sony. PlayStation Neo will do some of the same stuff as Xbox One S, bringing HDR and 4K compatibility as well as other tweaks – this is all happening halfway through the normal lifespan. Ybarra is unambiguous about where the inspiration for this tick-tock approach comes from:

“In the phone market, people are more used to upgrading fast and wanting the latest of everything,” he says. “But with phones, your new apps had better work on that phone and the next one. According to what they’re telling us, the consumer expectation is: games and apps had better work even if I upgrade. We’re looking at the console business and asking how do we provide that choice to users? It resonates with them because other devices are doing that.”

Microsoft is promising that there will be no Project Scorpio-exclusive titles. Games will ship with components that will take advantage of whatever hardware you’re loading them on – just like PC games have done for years. “Our commitment is to make sure every single game and every single accessory works across all of those platforms,” says Ybarra. “When we picked the silicon to go into all those devices, that’s the first question the engineering team that I’m responsible for asked themselves. Will this enable the compatibility and great games we’re promising? Can we deliver those? Everything is built from the ground up with this in mind. One game will run on the entire family of devices.



“Compatibility has always been the thing that makes console generations define themselves: when you leave one and got to the next, you give up your games, you usually give up the hardware or throw it in a closet – that’s what we want to remove. We’re focusing more on how do we deliver gaming in a boundless way to our players. We announced three platforms – today’s Xbox One, Xbox One S and Scorpio. We’re giving gamers the choice to say, ‘I want to invest in these particular games and this particular hardware, and I want those to work going forward, I don’t want to have to worry about giving that up’”.

According to Shannon Loftis, general manager of Microsoft Studios, the idea of producing one game disc that will service a range of platform capabilities is familiar to dev teams. “Many of our developers are already doing it - they’re already working to bring 4K gaming to the PC environment,” she says. “We can use the work they’ve done and bring that to console. We can make sure that, through the Windows 10 development environment, they can put one or two features into a game to future proof it against Scoprio. Taking advantage of dynamic scaling and things like that, a game they make for Xbox One today will run beautifully on S and run beautifully and look better on Scorpio”.

Facebook Twitter Pinterest Forza Horizon 3 is one of the forthcoming titles supporting Microsoft’s Play Anywhere program, allowing purchasers to start playing on their PC then pick up later on their console, or vice versa. Photograph: Playground Games

But hardware proliferation is only part of Microsoft’s vision for the future of Xbox. Integration between console and PC is a more pressing ambition. The Xbox Play Anywhere program will allow you to buy one digital version of a game which will give you access to that title on both PC and Xbox. You’ll also be able to cross-save, starting a game on one machine and continuing it on another. There will be more cross-platform multiplayer, there will be a consistent version of Xbox Live across PC, console and smartphone, where all your friends and achievements are stored together. From this summer’s update, PC titles like League of Legends, Dota and XCOM 2 are coming to Xbox Live and will have hubs on the console.

“We’re really getting to a world where, as a game creator, you can focus on building one game and then selling it to both a console audience and a PC audience and connect those two via Xbox Live and the Universal Windows Platform,” says Spencer. So is this about creating a united front against the dominant PlayStation 4? Is Microsoft seeking to combine its markets to provide a user base that competes?

‘I’m not trying to turn PC gamers into console gamers’

Spencer is not keen on that supposition. “PC gaming and console gaming are different, and the customer segments have capabilities and expectations that are unique to the platforms they play on,” he says. “With Xbox and Windows, there are some common things that we can put in the hands of creators and gamers – like Xbox Live, like your friends list – that help unify your gaming experience and put you at the centre as the player.

“But I bristle at the idea we’re bringing the platforms ‘together’. It’s not that I’m trying to turn PC gamers into console gamers or console gamers into PC gamers. We just know, and I’m sure you’re tracking it, the health of PC gaming is incredibly high right now, and we know some of our best and most active customers on Xbox One are also PC gamers – so we see this opportunity to service the customer and where they actually play, and they want to stay connected to their friends wherever they are. Things like Xbox Play Anywhere are really about choice and where they want to play. So if you’re at school and want to play a couple of rounds of a game and then you go back home and want to continue on your couch, that seems normal. Every other kind of media – your music, your movies – everything else works that way.

“Sony is doing incredibly well with the PS4 but they’re doing something fundamentally different from us. We’re not building a strategy in response to what they’re doing, we’re building a response to what I see customers and gamers asking us for.”

Clearly though, behind all the talk about hardware iterations, what Microsoft is really trying to do is double down on the quality that has always symbolised its games hardware: connectivity. Xbox Live was a revolutionary service when it premiered, not only providing a smooth, reliable multiplayer gaming platform but also introducing asynchronous socially competitive elements like gamer scores and achievement points.

Facebook Twitter Pinterest Mike Ybarra introducing the new Xbox Live features at Xbox E3 2016. Photograph: Casey Rodgers/Invision for Xbox

Now it wants to remind us of all that with a bunch of new Xbox Live features, designed to better organise social play. This autumn, there will be three new services: Clubs, Looking for Groups and Arena. Clubs lets you set up themed groups of players who can meet up online and play whatever they like. During an E3 demo, Tom Langan, a group program manager on Xbox services, showed a few examples of possible Club titles such as “West Coast Players” and “Women Only”. Club members are able to communicate via real-time chat, and can track what other members are playing, and these social options work on any Xbox Live app, so you can quickly check on your phone what people are up to.

“When I was in college, I had a regular group of people I always played with,” says Ybarra. “We sat in IRC channels to talk to each other - it was like Slack is today. Even when you weren’t playing you were still communicating with these people, because your friendship goes beyond just gaming. I thought, how do we bring that back? So now you can create a club, you can manage it, invite people, kick people out, but it’s a persistent place that’s sort of a home – it’s a set of friends you can always go back and talk to”.

Looking for Groups, meanwhile, is more like a matchmaking app, which lets you quickly discover like-minded players to compete beside or against. When you load it up, the UI shows how many people are currently looking for groups. If you select something you want to play, it narrows down the list to similar people, then you go through a set of filters – such as ‘No trash talking’, ‘Must be experienced’, ‘Mic required’ – so you can gradually narrow in on a select group. You can then enter tournaments as a group, and can invite people to play with you at certain times.

“With Looking for Groups you can say, ‘I’m looking for a group at 8pm to play Gears’ – and you’ll get notifications saying, here are the people who applied, here is their level of experience and you can select a group and you’re ready to go,” says Ybarra. “Groups already exist today, but a lot of people have to go off their console, get on their PC, open a browser and go to, say, DestinyLFG.net for example. Looking for Groups kind of answers that. We’re just taking the best of the PC gaming world, uniting it with console, and delivering an experience that lets people find other players who fit a specific criteria.”

Finally, Arena is a sort of eSports for All section of Xbox Live which lets players enter public tournaments and win prizes. “The heart of Xbox has always been competitive multiplayer so this is a tournament platform that lets developers and tournament operators like FaceIt, ESL, etc, to be able to say we’re going do a Gears 4 competition this weekend, we can take 1000 players and the prize is, say, 12 months free Xbox Live Gold membership for your whole team, and you just start competing. It’s going back to the LAN days of 15 years ago when people brought their PCs into a conference room, wired them up and played together. That’s what we’re trying to get at.”

Facebook Twitter Pinterest In future, EA’s support of Arena may allow players to indulge in multiplayer Fifa tournaments that take place alongside real-world competitions like Euro 2016. Photograph: Electronic Arts

When it launches, Arena will be restricted to events organised by major tournament operators, but Ybarra says the vision is to extend outwards so that publishers, developers and players can set up their own themed competitions. Microsoft has already announced that Electronic Arts is supporting the platform with its Fifa series. According to Ybarra, future versions of Fifa may have a Arena area on the main hub, showing all the upcoming tournaments. You can then register for one and you’ll receive regular notifications reminding you of the date and time. Then when your match is due to begin, the game will automatically take you into the competition. Afterwards, the result is automatically reported to the system, you get a bunch of stats about the match, and a preview of your next opponent, showing their previous results and more stats about their abilities. “It’ll be as seamless as we can make it,” says Ybarra. “We’re fleshing out the UI now.”

For Spencer, what this is all about is inclusivity – it’s about taking the intimidation and uncertainty out of online multiplayer for a new generation of players. “Devices like phones and tablets have broadened the audience for games,” he says. “Whether it was Candy Crush or Angry Birds or whatever, they have made the artform and the medium more accessible to more people. I think we have a responsibility as the industry to accept that, acknowledge that, and build the features that let people play. Clubs is really about letting people create the environment they want to play online in. I do think as an industry it’s our responsibility to recognise that we need to make games for everyone, not just people who grew up with a controller in their hands playing Diablo.”

This sense of inclusivity is something Microsoft Game Studios seems to be thinking about at the very top level. The issue of diversity regularly comes up during and after the E3 conference, and Microsoft claims to see it as a vital element of game design going forward. “Entertainment is a fundamental human need and the best forms of entertainment provide everyone with the chance to escape the ebb and flow of daily pressures,” says Loftis. “What I love about games is how quickly they allow people to achieve that sort of flow state.

“As game development tools have become more democratised, new voices have entered into the development market in ways they’ve never been able to do before. With engines like Unity and even Twine, as well as the super high-end of technology with VR and 4K, [developers are] unlocking a whole new world of story telling. Our commitment as studios is this – we’re going to make sure gamers have a diverse and expansive portfolio to choose from. Everything that comes from Microsoft Studios and our partners will be super inclusive. I love the unlimited potential of games to tell stories.”

On that note, Loftis also says that, despite the closure of the Xbox Entertainment Studio in 2014, the company is keen to work on more products that combine interactive and television content – like Quantum Break. “Actually it’s getting easier,” she says. “As performance capture becomes more sophisticated, the work to bridge the gap between the linear entertainment and the interactive element is becoming less and less. I would love to work on another mixed-media game.”

VR – the future, as usual, is hazy

One element of the future that Microsoft is not so certain on is virtual reality. Unlike Sony, the company has not developed its own headset, concentrating instead on augmented reality via its Hololens project. It has a partnership with Oculus, and we’ve seen the excellent virtual reality version of Minecraft that runs on Rift and Windows 10 PC. Furthermore, at E3 we saw Phil Spencer on stage saying, “The next step change for gamers and developers must deliver true 4K gaming and high-fidelity VR.”

So was VR support a key part of the Scorpio vision? “I think the capability in the consoles that are on the market today to play high-fidelity true console-like experiences in VR ... they’re just not powerful enough,” he says. “To deliver the experience that console gamers expect, that’s really a six-teraflop problem at least. You kind of need to get there.”

But there’s a problem here. Microsoft has said that there will be no Project Scorpio exclusives, that all games will be compatible across the whole range. But if publishers begin to create high-end virtual reality titles that will only run on Scorpio-level hardware – that’s market fragmentation, right? “I will say, we’re very focused on console games and what console gamers want, and I see VR as something different,” he says. “Like, other people might try to say, ‘VR is the future of console gaming.’ I’m not saying that. I’m saying if you’re an Xbox One console gamer, we are so focused on making your experience the best experience you’ve ever had with the best lineup of games. We’re not getting distracted.”

Perhaps then, we’re looking at a future market where Xbox One titles will feature VR modes and augmentations that will only be accessible to Scorpio owners – but not a future where we’ll see totally dedicated VR titles. If this at first seems limiting and appears to show a company attempting to sideline VR, there are interesting hints that this is not the case. When asked about the idea of multiplayer VR games and virtual social spaces like AltSpaceVR running on Xbox, Ybarra is unguardedly enthusiastic. “We’re focused right now on what we announced on Scorpio, but Xbox Live and VR opens a lot of doors that we’re looking into for sure,” he says. “The opportunity of VR and Xbox Live together is boundless – we’re just starting to consider what that will look like. We have teams looking at what’s coming and how we apply that.”

When Phil Spencer addressed the press at Microsoft’s Xbox Spring showcase earlier this year, he spoke about the concept of the Universal Windows Platform – about applications that could run seamlessly across Xbox and PC; and he seemed to be hinting at an almost modular future for consoles, where players could swap in more powerful components as the years went on. It looked to be a radical departure from the traditional console industry. Post-E3, the message is more nuanced, that vision of an extremely PC-like machine, played down.

“I push a button, the console turns on – it’s appliance-like in the way it works,” says Spencer. “I don’t end up at a PC desktop, I end up at a curated UI experience that gets me to the things that I’m gonna want to do on my TV. That is critical to us, and we remain focused on that console experience.

“I live inside of a company with 100,000 other people working on a bunch of different things. Five years ago I was sitting here, and most of the questions I would get were, ‘Isn’t all gaming going to phone? Are people really gonna buy consoles?’ Now, Sony’s doing incredibly well, we’ve sold more Xbox Ones than we sold 360s at this point in the generation, and Nintendo is getting ready to talk about NX. You know, the console business is very, very healthy right now.”

So Microsoft’s vision of the future is highly social, highly scalable, but also highly inclusive, both in terms of hardware functionality and the game design. Whether this will be enough to compete against Sony’s combination of a hugely popular machine and a well-priced entry-level VR headset remains to be seen. Microsoft has always been obsessed with carefully interpreting and segregating its markets; it’s done that with its OS and Office packages for years. Can it do the same with consoles? Can the Xbox One S and Scorpio co-exist? Can it communicate that vision to consumers? That’s a huge, huge ask.

“I’m excited,” says Ybarra of the coming challenges. “I think with the games, the hardware and service that we have, it’s the best time to be an Xbox gamer.”