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E3 2016 Analysis: Microsoft, Sony, Nintendo and New Hardware

Phil Spencer on the stage at Microsoft's E3 conference this year. (Photo by Microsoft)

Phil Spencer on the stage at Microsoft’s E3 conference this year presenting Project Scorpio. (Photo by Microsoft)

The game industry is going through a transition, with the changes kicking into gear last week at E3 in Los Angeles, California.

Here’s my take on presentations from the three companies, upgraded hardware and the potential for a new console generation.


Phil Spencer, head of Xbox, has done a nice job of turning around the colossal meltdown that former head Don Mattrick and others left him leading up to and after the November 2013 launch of the Xbox One. The Xbox 360 became extremely popular but Microsoft lost too much share to the PS4 because of bad policies and messaging about always-online DRM and restricting used game sales, a Kinect and television focus, a higher price and an overall weaker console.

The Xbox brand just isn’t popular right now. While the Xbox One is selling modestly, it’s still only moving roughly half of what Sony does with the PS4. It will never catch up to the runaway success of the PS4 that currently has over 40 million sold worldwide. Microsoft even stopped revealing official sales numbers, instead reporting the entire Xbox platform’s user interactivity like total hours spent on Xbox Live or the millions of combined hours people played certain Xbox One exclusives.

Most of Microsoft’s E3 conference on June 13 leaked before the show even started, which took away some of the usual surprise. Unlike Sony Microsoft showed many games that were actually coming out in this calendar year. Under Spencer the Xbox brand is continuing to go back to games, instead of focusing on its original television strategy and the Kinect, which it never raised to its full potential for gaming.

The company announced an Xbox One redesign called the Xbox One S, which is 40 percent smaller, has a new white design, high-dynamic range for gaming and 4K media support. The Xbox One S looks like what Xbox One should have been from launch, although it still has the less powerful hardware inside. The S console probably won’t have the same effect the PS3 slim redesign had for Sony in 2009 but it’s still good momentum for the Xbox brand.

While Sony has a strong and diverse catalog of first-party games and developers, Xbox One struggles in that aspect. Closing its Fable studio this March made the situation even worse. There also isn’t a lot of energy and buzz behind Xbox exclusives, with games like Halo 5: Guardians (2015), continuing a decline in popularity since moving over to 343 Industries. Even the next Gears of War feels like more of the same. That doesn’t mean it will be bad, just that the franchise doesn’t feel like the blockbuster it was during the Xbox 360 years.

The show focused on upcoming exclusive games like Gears of War 4, Forza Horizon 3 and ReCore that will most likely be excellent games this year. Games like Sea of Thieves, Scalebound and Halo Wars 2 shown at the conference are good exclusives for 2017. Capcom’s Dead Rising 4 and the return of Frank West this December will be Xbox One console-exclusive for one year (with 90 days on Windows 10). This exclusivity didn’t work out that well for Rise of the Tomb Raider last November since it didn’t even make the top 10 best-selling games for the month. Dead Rising 3 was a good launch title for Xbox One though.

The new team in Gears of War 4 is Kait Mid, JD Fenix and Del Walker. (Image by Microsoft)

Gears of War 4 stars a new team with Kait Mid, JD Fenix and Del Walker. (Image by Microsoft)

With the Xbox Play Anywhere program that gives both an Xbox One and Windows 10 version for buying a participating game, it’s getting harder to choose an Xbox One console if you’re also a hardcore gamer with a great PC. Pure Xbox One exclusives are shrinking as the games will also simultaneously launch on Windows 10 and now support cross-buy. It’s still a great pro-consumer move by Microsoft though. Third-party companies and indie developers might not want into this program if it means the game losing sales by not also releasing on Steam, GOG and other digital storefronts. Microsoft is trying to grow Windows 10 and most likely doesn’t care what platform you play on as long as you are buying its games and are in its ecosystem.

There will eventually be three different versions of the Xbox One. Microsoft ended its conference with Spencer taking the stage to present the next evolution of the Xbox brand. The show ended with a video describing Project Scorpio, which will launch in holiday 2017. The console is going to have six teraflops of GPU power, eight CPU cores, over 320GB per second of memory bandwidth, offer 4K resolution gaming and virtual reality support for potential devices like the Oculus Rift. For people that don’t get the lingo, what this means is Project Scorpio is basically a beefed up Xbox One.

The Scorpio announcement took away some of the hype of the games at the conference this year since it’s obvious Microsoft is looking much further ahead to jump-start the Xbox One. Spencer said the strategy for the Xbox brand is to offer, “a world where you can play without boundaries, a world beyond generations.” The Xbox team repeated the message, calling Project Scorpio a console without boundaries, limitations or compromises. The Scorpio is supposedly going to have the most powerful graphics card ever put into a home console to support higher resolutions and frame-rates over today’s usual standard of nearing 1080p and 30 frames-per-second.

Microsoft won’t force developers to use 4K resolutions but will leave it up to each studio to decide how to optimize their games. All Xbox One games will be “part of the same family” according to Microsoft and playable across all three consoles. The basic Xbox One models won’t be able to play virtual reality games though, so it’s going to get left behind in some ways. There isn’t going to be exclusive Scorpio-only games that abandon original Xbox One owners.

There were some early confusing messages surrounding the Scorpio. Spencer initially said that gamers would need a 4K television to take advantage of the console, otherwise they shouldn’t buy it. “Scorpio is designed as a 4K console, and if you don’t have a 4K TV, the benefit we’ve designed for, you’re not going to see,’ Spencer told Eurogamer. He later clarified that people will still see the console’s positives even without a 4K television. Given how powerful the console is supposed to be, there should be plenty of benefits over the original Xbox One besides just 4K resolutions.

The Xbox One S also had conflicting reports on whether it will give a performance boost to games over the standard console. Comments made by Rod Fergusson, the Gears 4 studio head, suggested games like his would play better on the S model. Spencer had to clarify that it won’t, instead only making some games look better because of its high-dynamic range support. Spencer and the Xbox division need to get the messaging in order for what’s already a confusing new era for console players. There needs to be a strong case for why the Scorpio exists and why people should be excited for the Xbox One again.

Coming out of E3 there’s still a lot to be positive about with the Xbox One. Right now the Xbox brand is in rough shape but Spencer and his team are certainly listening to feedback and trying to improve the Xbox One. Focusing on making stronger games is the right move in a long-term strategy to get back to where the Xbox was last generation. If the Scorpio can bundle together many of the benefits of a high-end gaming PC but for a mass audience in the console realm then it has plenty of potential to be successful.


Sony Interactive Entertainment had a non-stop presentation of high quality first-party games and exclusives during its hour-plus show last Monday night. There wasn’t a lot of talking or focus on new consoles but plenty of game footage and trailers throughout the show. The problem with Sony this generation is that its first-party games either keep getting delayed or are so far off from a real release date. Compared to its three previous consoles, Sony is doing a poor and disappointing job maintaining its exclusive lineup. After nearly three years though the games are finally being shown that can push the PS4’s limits.

The show opened with an orchestra playing the theme for the new God of War and Kratos coming to PS4. The game is a complete change to the God of War formula, which after a few releases became stale several years ago. Kratos is a dad again who must control his rage and grow the relationship with his son. God of War has potential to be something cool given its new Norse mythology setting and Kratos’ character development. An all-new title called Days Gone was revealed as a post-apocalyptic story with biker gangs and zombies, the next game from the Syphon Filter developer Sony Bend Studio. At first glance these two new games look heavily influenced by Naughty Dog’s The Last of Us (2013). Both of these also don’t have launch dates, which could be next year or even into 2018.

Kratos and his son encounter a troll in the new God of War (Image by SIE)

Kratos and his son encounter a troll in the new God of War. (Image by SIE)

Horizon Zero Dawn from Guerrilla Games continues to look incredible the more its shown off but it’s yet another game delayed into 2017Detroit: Become Human from Quantic Dream and David Cage doesn’t have a release date yet but has potential to pass the story quality of Heavy Rain (2010). Hideo Kojima got respect from Sony after going through an ugly falling out with Konami. He revealed his new Sony-exclusive called Death Stranding starring Norman Reedus. Death Stranding looked bizarre in the usual Kojima way but it doesn’t even have a confirmed game engine yet. It’s going to a real long time before we get to play his first game post-Konami.

Last year Sony had big surprises with reveals for Shenmue 3 and Final Fantasy VII Remake, both games that many considered “won” E3 for PlayStation but are still nowhere near to coming out. This year’s nostalgic announcement was Crash Bandicoot returning to PlayStation, with the first three games from the ’90s being remastered for the PS4 next year by Activision and Vicarious Visions. Beyond its quick announcement, the remastered Crash didn’t even have a teaser trailer and also no solid release date. Nostalgia gives a nice warm feeling but there needs to be new experiences we haven’t seen before.

One of the conference’s best surprises is a new Spider-Man game exclusive to the PS4 being developed by Insomniac Games. There’s a new strategy for Marvel and its console games to produce high-quality and original titles, with Spider-Man starting it off. Insomniac and Sony will have exclusivity to Spider-Man console games going forward. Insomniac taking what the studio did with Sunset Overdrive (2014) should make for a better Spider-Man game.

The PS4 has had no first-party games for its past two holiday seasons, instead relying on big third-party games like Destiny, Call of Duty and Star Wars Battlefront to push the console. The only first-party titles this holiday confirmed so far will be The Last Guardian in October, a highly anticipated game that was delayed for several years and Gran Turismo Sport in November, one of the top racing games in terms of popularity. Both these games will most likely be good but they don’t compare to what the PS4 should have during its fourth holiday season.

The games Sony showcased and how they were presented set them apart from Microsoft’s conference. Disappointingly there wasn’t a focus on independent developers, although the big titles were impressive. The great games are there for Sony. We’re all just waiting to play them.


Nintendo yet again took its own approach to E3, separating itself from its competitors by putting forth one major game last week. Since the company wasn’t ready to show its upcoming NX console, Nintendo revealed the next Legend of Zelda game will be subtitled as Breath of the Wild. It’s changing the Zelda formula in a uniquely Nintendo way for a huge open world game like Skyrim (2011) or The Witcher 3: Wild Hunt (2015). 

The Legend of Zelda: Breath of the Wild is my favorite game from this year’s E3. Nintendo went all-in with the new Zelda being the only title playable on its show floor. The company showed hours of gameplay starting last Tuesday during its live Treehouse event, with commentary and interviews from the producer and other developers. Focusing so much on the game was a smart strategy. It made the new Zelda feel important and must-play for a console like the Wii U that’s an afterthought at this point. People waited hours in line just to play the game. There was so much excitement that people were running to play the new Zelda on the last day of E3.

Breath of the Wild will feature a big world for Link to explore. (Image by Nintendo)

Breath of the Wild will feature a big world for Link to explore. (Image by Nintendo)

Now it’s actually more interesting to see the game running on the NX when it launches in 2017 instead of its original exclusivity on the Wii U. Nintendo also focused extensively on other exclusives at E3 like Pokemon Sun and Moon launching for the 3DS in November. On the Wii U side there’s Paper Mario: Color Splash on Oct. 7.

Other than the new Paper Mario the Wii U has nothing for the rest of this year, with Nintendo in a holding pattern until the NX launches in 2017. This year is going to be one of the worst holiday seasons for Nintendo. The Wii U is essentially a dead console with few games in the future. Sales numbers for the 3DS are declining and profits are also down for the company. The Wii U has only reached close to 13 million consoles sold worldwide since November 2012, way below the little over 100 million the Wii sold. The NX needs to be a drastic change to put Nintendo forward again.

New Hardware

A type of hardware arms race is building between Sony and Microsoft to see who can get the most powerful console out to upgrade the current systems.

The rumors for an upgraded Xbox One started in March from comments Spencer made about the possibilities of changing hardware. In late May rumors about Project Scorpio’ surfaced. As Sony confirmed before E3, an upgraded version of the PS4 hardware called the PS4 Neo is real and will offer better gameplay experiences over the standard model. The PS4 Neo will share some of the same components of the standard console but with an improved graphics card and other minor upgrades. The PS4 Neo was absent from Sony’s conference but it’s rumored to launch this year at a price higher than the standard PS4 retails for at $349.99.

After the expected specs for Project Scorpio, the PS4 Neo doesn’t appear that impressive anymore. While the Scorpio in theory sounds like a meaty upgrade, the PS4 Neo now comes across as a minor leap. If it’s just releasing for 4K gaming but not able to push the limits of the resolution, what’s the point? The strategy behind the Project Scorpio announcement surprised Sony. Andrew House, president and CEO of SIE, told The Guardian that in today’s current climate of advancing tech from companies like Apple, announcing a console that won’t release for another year goes against what consumers are now accustomed to. Sony will have nearly a massive head start over the Scorpio if the Neo launches this year. Announcing the Scorpio over a year and a half in advance is risky for current Xbox One sales but Sony putting out a weaker console too soon could backfire, making the PS4 Neo look like a wasted opportunity.

There’s no way for the Xbox One to catch up to Sony by staying on its current path. Microsoft is essentially looking towards the future for a refresh. It didn’t lose with the Xbox One solely because the console had weaker hardware. It lost because of poor top-level decisions and terrible messaging. Microsoft released a more expensive console with weaker hardware while the PS4 had such positive momentum and consumer goodwill to go along with a lower price.

Will Project Scorpio hurt Xbox One and S sales? There’s a strong potential for that. Microsoft keeps mentioning there are millions of people still playing on Xbox 360 and that the Xbox One S might entice them to jump over. The Scorpio could be a premium Xbox One while the S console is for everyone else. There’s a good argument as to why these same people just don’t wait another year for Project Scorpio instead of spending hundreds for a weaker console. Microsoft again dropped the price of the standard Xbox One model to below $300 but there’s hardly a reason to buy that version either with the S console starting its launch this August.

The 2017 holiday season is a long time away. Competing in a hardware war is tricky because of how fast PCs get upgraded with better video cards and processors. By the time the Scorpio actually launches next year, it probably won’t be as impressive as when it was first announced at E3. Perhaps by not officially revealing the hardware yet and instead letting Andrew House talk about the Neo with various media outlets, Sony was the one caught off guard with Scorpio’s rumored hardware. Maybe right now Sony is re-evaluating its strategy and revising the specs to compete with Project Scorpio or it could already be too late if the console is close to production. Microsoft is also still working on the specifications for Scorpio that could change in the next several months. The price of the Scorpio could easily be a larger investment than any home console on the market, which initially doomed the PS3 at its launch in 2006. Nowadays people are more accustomed to higher tech costs but Project Scorpio’s price still might come with a sticker shock to it.

The consoles are changing. (Image by Mark Farrell/Flickr)

The home console space is changing. (Image by Mark Farrell/Flickr)

Part of Sony’s reasoning for making the PS4 Neo is to prevent players from jumping to platforms like the PC. “We’ve traditionally seen that some of the core audience tends to gravitate back to high-end PCs at some point because these are the people who want the finest graphical performance,” House said. “So here’s a great opportunity to have them stay within our ecosystem.” The problem with Sony’s is that the PS4 Neo still isn’t powerful enough to attract PC gamers who can build a much more impressive gaming rig that’s also on a more open platform. Sony does tend to have the better exclusives over Microsoft that won’t ever release on PC, which is a stronger reason to own the console rather than for improved graphics.

Reggie Fils-Aime, president of Nintendo of America, said that Nintendo isn’t focusing on powerful hardware specs for its NX console, preferring to let Sony and Microsoft “fight out in that red ocean” while it works on creating strong entertainment content. This mentality has the danger of putting the console in the same position as the Wii U, being just another underpowered Nintendo box with extremely poor third-party support. More than ever, this console generation is being driven by third-party games. The underutilized tablet controller and terrible Wii U-branding utterly failed, costing Nintendo tens of millions of potential owners coming from the Wii, a mistake that the company can’t make again with the NX.

Right now all the focus is on the PS4 Neo, Scorpio and 4K gaming with Nintendo getting pushed to the side again. We still don’t know where Nintendo’s home console and handheld businesses will go with the NX. Nintendo has a fantastic lineup of games on the Wii U with titles like Splatoon, Super Mario Maker, Donkey Kong Country: Tropical Freeze and Mario Kart 8. That didn’t make people buy the console. Content isn’t the problem for Nintendo but the company’s stubbornness and often behind-the-times decisions that end up hurting its console.

A New Generation

As mentioned several times during the Xbox conference, a theme for the Xbox One going forward is let people “play without boundaries” and a new way of looking at a generational cycle. The concept of a console generation is evolving. It doesn’t make sense anymore to wait 6-8 years for the next all-new home console. The Xbox One and Wii U both show that poor design and business decisions can cripple a console for its entire lifespan, making it almost impossible to recover. Sony was able to turn around the PS3 after losing so much ground to Microsoft from a poor launch. However even that took several years into an already extended console generation that lasted longer than average.

Heading into 4K gaming with graphics that we haven’t seen before might be the next leap in how we consider what the next generation is. With both the Scorpio and the Neo the lines of when the new era begins are being blurred. “This is an additional option, it’s a high-end version of a PlayStation 4, let’s be very clear about that, rather than a generational shift,” House said about the PS4 Neo. Sony is going with a higher-end console while trying to maintain its extremely large base with the standard PS4. Project Scorpio could even be considered the starting point of a new generation, considering its leap in hardware and that it will be four years from the Xbox One launch, the same time between the original Xbox and Xbox 360.

With the power behind the Scorpio, Microsoft needs to put out exclusive games that show off what the console can do and have third-parties take advantage of the performance increase over the PS4. For both PS4 Neo and the Scorpio, games are required to play on both these upgraded consoles and the standard models. PC games already have different benchmark settings so if done right it should work the same way on these new consoles. The weaker consoles shouldn’t hold back game development. They will lead to more work for each studio, who now have to develop multiple versions of console games that are able to run on several different hardware.

Project Scorpio will also be fully backwards compatible with all Xbox One titles while the base console will be forward compatible with new titles. This keeps the ecosystem growing and a person’s library alive by not being stuck to one console. Microsoft has done a better job with backwards compatibility than its main competition in ways like continually adding from the Xbox 360 library, which is one of the positives of it trying to replicate the PC arena and merging the Xbox with Windows 10.

Home console upgrades that play different versions of games aren’t something that consumers have dealt with before. While the comparison will be made, console upgrades aren’t the same as phones. Phones are easily more important, can do everything and are an extension of a person’s entire life. Consoles play video games, movies and streaming services. Phones also come with subsidized monthly payment plans for carriers, contracts and official trade-in or sign up programs through the phone carrier to lessen the cost. Consoles don’t have a lot of these incentives right now. It’s harder to pay over $400 upfront to upgrade to a console you just bought a year ago than it is to get a new phone you will use for many aspects of your life.

Consoles taking on faster release cycles like phones, putting new hardware out every two years with better performance would be crazy and turn off many consumers. As a console generation goes on, prices drop and more people jump in to play the best games. With the Scorpio and PS4 Neo, not only would people have to spend hundreds to upgrade their consoles if they want to play the best versions of the latest games but their televisions up to 4K as well, on top of maybe getting a virtual reality headset. More than likely the standard games on the basic consoles will be “lesser” versions. People don’t want to be stuck on old technology, even if that perception is wrong. Will these consoles be powerful enough to handle true 4K gaming at solid frames-per-second like PCs are starting to? It doesn’t seem like the current plans for PS4 Neo would be able to achieve that in a way that warrants what Sony has planned.

Sony had the best conference at this year’s E3, focusing on the exclusive games that people have been expecting from the PS4. Microsoft had a good presentation with familiar yet solid games but was once again out-shown by Sony. Nintendo proved it can make games like no one else with the new Zelda even as everyone waits for the NX console reveal.

Hopefully with the improved hardware inside PS4 Neo and Project Scorpio we start to see the differences where it really matters. With these upgrades should come more creative games and worlds from developers that push the limits of the console this generation (or the next) instead of remasters, re-releases and games struggling to match their PC counterparts.

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