House Special: The State of Microsoft Gaming

Last week, I posed a question to my Tweeps, “Is Microsoft in a better position at the end of the generation?”

The knee-jerk reaction would be of course they are in a better position! They have increased their marketshare by outselling the original Xbox by about 15 million units at this point, and the generation isn’t even done. They have a stable of solid 3rd party support, and most importantly they have weakened the PlayStation brand by “borrowing” a few of their key exclusives such as Grand Theft Auto and Final Fantasy XIII.

With the launch of Kinect in a few short months, Microsoft is also making an active move to garner more recreational gamers and expand their userbase. Everything is coming up roses if you are Microsoft at the moment.

So the only question remains is, how could they be in a worse position at the end of the generation?

The answer is both a bit complex and simple at the same time. Microsoft has been so busy trying to do right this generation that I feel they aren’t planning for the long-haul. It was a lesson Sony learned as they transitioned from the PlayStation 2 to the PlayStation 3. You can’t build a brand on 3rd party franchises because there’s no guarantee they will be there forever.

This easiest way to talk about this took place only two days ago as EA and BioWare announced that they would be bringing the space-epic, Mass Effect 2 to the PlayStation 3 console. Now for the last 3 years or so, Mass Effect has been a 360-exclusive (let’s exclude PC in this conversation) and one of the key reasons to own the console. Right about now, folks are screaming at their monitor, but the PS3 version comes out a whole year after the Xbox 360 version and you can’t import your save from the first game! Both are valid and true points, but it isn’t so much the past as the future that Microsoft needs to worry about. Will Mass Effect 3 be co-released on both platforms at the same time? Can Sony make a deal to get exclusive content? Once, you no longer control the game, there are too many elements that are against you.

Mass Effect 2 finds a new home.

Mass Effect is only one example. Going into the next generation, Call of Duty is the biggest franchise around (again let’s ignore the Wii line-up for this part of the conversation) and MS has the mindshare with the franchise this generation, but going into the next they have no control over it. What if PlayStation 4 hits first with the first next-gen Call of Duty, do you think gamers will wait around until MS releases their next Xbox to play the latest Call of Duty? What if Nintendo decides to match power with power and they get into the Modern Warfare… er war? These are things that Microsoft can’t control and can’t depend on when revving up to make the jump into the next generation.

This is generally when a strong first and second party line-up comes in. And this is where I feel that Microsoft has dropped the ball this generation. In the almost 5 years that the 360 has been on the market, Microsoft has really only created Gears of War and Mass Effect as notable franchises. As we saw already this week, Mass Effect doesn’t need to stick around Microsoft’s console, and there’s no guarantee that Epic will continue to make Gears of War once they complete the trilogy. Granted, it sells extremely well, but they could be looking at 2 or 3 viable platforms next generation in which to sell a new IP.

As for Microsoft’s studios. In the 9 years they have owned Rare, they have really diminished the company’s brand. None of their games have been extremely note-worthy and now they are off making sports games for Kinect. Bungie Studios is putting the wraps on Halo Reach, but after that they are free agents and already announced plans to do multiplatform games. Ensemble Studios closed down a year ago.

Bungie's Swan song on the Halo Franchise

The only studio of note that Microsoft has left would be Lionhead which is wrapping up production on Fable 3. They also created 343 Industries which is an internal team that will handle the Halo IP after Bungie is gone, but we know nothing of their quality.

In short, Microsoft has done a terrific job in gaining the ground/marketshare they did this generation. They have provided a ton of quality games for owners of the Xbox 360, but I think it is time Microsoft starts thinking long-term. I realize that the console wars are a figment of a gamer’s imagination, but they do need compelling exclusive reasons for people to pick up the next generation console over whatever Nintendo or Sony produces. The time is now for them to start building up new studios and getting them to work on brands while they have an extremely large market to sell it to.

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