Is this year’s E3 going to be the Battle of the Slightly Upgraded Consoles?

Xbox chief Phil Spencer set off a flurry of speculation last month at an Xbox media event when he said that Microsoft would “come out with new hardware capability during a generation allowing the same games to run backward and forward compatible,” allowing Xbox to “focus more and more on hardware innovation without invalidating the games that run on that platform.”

Then, coming out of last week’s Game Developers Conference, Kotaku reported that Sony is in development on something of a “PlayStation 4.5,” which would be an upgraded PS4 that supports 4K resolution and boasts increased processing power that could allow Sony to create better-looking games on PlayStation VR.

It’s firmly within the realm of probability that we could see a PlayStation 4.5, or an Xbox One and a Half, at or before this year’s E3 Expo in June. This would be a pretty big shakeup to the console paradigm (which I’ve long argued has a fast-approaching expiration date on it). If it happens, it could all be because (if I may quote Spinal Tap) consoles’ appeal is becoming more selective.

“Part of the reason for this move is, I think, a general lack of confidence that there is the same number of people in the world who want to buy dedicated games hardware as there have been in the past,” said Ben Cousins, a veteran game developer who has written and spoken extensively on gaming’s future, in an email. “While I think there will always be an audience of a certain size for consoles, it might not be as big as it was in the past, because the ‘I buy a console when it’s $99 and only play Madden on it’ audience may have moved over to mobile gaming.”

In other words, Cousins says, releasing slightly upgraded consoles might be a tactic to sell more consoles to fewer people. It’s all about increasing ARPU—average revenue per user, the amount of money you get from a single customer. Console makers do this with software by selling DLC, a subscription, or a collector’s edition, he says, and releasing console upgrades could have the same effect on the hardware side.

“If they can communicate to consumers a strong reason for the upgrade… then they could generate a lot more income without having to grow the overall market for consoles,” he says.

Sounds like a slam dunk, right? Well, there’s a reason that neither Sony nor Microsoft has ever tried something like this before. Typically, consoles have a 4-6 year shelf life, during which the actual processing power of the hardware is never upgraded. The box might get shrunken, more optional features might get tacked on, but ultimately the games themselves don’t change.

For players, consoles are supposed to be an idiot-proof alternative to building a PC. Buy an Xbox 360, and any game that says Xbox 360 on it Just Works in your box, whichever box you have. For game developers, it means not having to make a lose-lose choice: If you create your game using the increased hardware power of the new box, you can’t sell it to anyone with the old machine. But if you make a game for the whole audience, you leave all that horsepower on the table and compromise the design of your game.

It’s worth noting that Nintendo, which does occasionally upgrade its portable game machines mid-cycle, just did this with the New Nintendo 3DS. This handheld can ostensibly run better-looking games, but in practice, only a tiny number of games utilize its additional power.

Phil Spencer, in his address at the Xbox event, connected this iterative-console concept back to, as Microsoft always does, Windows. He noted that these “backward and forward compatible” games could be developed on the “Universal Windows Platform,” the environment that lets developers create software that, once programmed, will run on both Windows 10 and Windows Mobile—and soon on the Xbox, Microsoft confirmed at Game Developers Conference last week.

Sony, which as far as we know has no such dream of unifying the PlayStation platform with PCs and phones, may simply see an opportunity to leapfrog the competition technologically, introducing a 4K-capable game system a little bit early in anticipation of the price of 4K sets coming down rapidly in 2016 and beyond. And since the PlayStation VR setup is a bit cumbersome at the moment, requiring an extra box that hooks up to your PS4 with its own AC adapter, perhaps a PS4.5 could integrate that hardware a bit more, just as the Xbox 360 Slim was made “ready for Kinect.”

Microsoft’s and Sony’s incremental upgrades may, therefore, end up being very different in their ends and means. Will either of them actually get gamers to buy in?

“It’s a really hard call to make,” Cousins says. “If we look at previous attempts to upgrade consoles (Sega 32X) you might think ‘no’… If you look at Nvidia’s business model from the 2000s of getting people to buy a new GPU every 18 months, you might think ‘yes.’”

If you’re a PlayStation 4 or Xbox One owner, it’s a call you might have to make for yourself, perhaps sooner than you think.

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