A cheaper, smaller Xbox One to compete with Apple TV?
Think this is just a rumor, but I don't think it is a great idea.
Its true that the Xbox One is Microsoft's closest competitor to something like Apple TV. But, at the same time it is also so very far away and in some crucial areas. It is also superior to the Apple TV in some ways. But most of those are reasons why they are for completely different user segments.
Firstly, how to get there. The rumors seem to be going back to a disc-less design. This should cut costs slightly and most definitely allows for the size to be addressed. But not entirely. Apple TV is TINY (by comparison) and fan-less. Due to the hardware in the Xbox One I just don't think they can ever shrink it to that level or get rid of the fans (without making it something that isn't an Xbox any more). The cost of the SoC may have come down enough to make for some reasonable price adjustments.
I don't really see them making a whole new device either. There is a market for Xbox One, the size of the market for something else is unknown. And Apple TV sales are lower than Xbox One. So, making such a move on a device based on, not actually an Xbox One would be gambling on trying to be more successful than Apple in a field which they are already established in.
Which means, any new device is likely to be a "true" Xbox One. Which leads to the next problem. Content. Until people can use their iTunes libraries on an Xbox One Microsoft is at a disadvantage. They have a decent number of media centric apps. But people, at the moment at least, have more media purchased through Apple. There is also no good means, currently, for streaming from a Windows PC to an Xbox One for media purposes and most of those services Microsoft offers can be had in much cheaper, smaller and fan-less solutions. It is a hard sell.
Yes, an Xbox One would kick the ever living shit out of Apple TV or any of those alternatives when it comes to gaming. Allowing for true console gaming with premium titles. But, if people are looking for or care about that, then they aren't even looking at an Apple TV anyway. In other words, Apple isn't really competing on that front.
So, what do I believe is causing these rumors? Well, Microsoft very likely is working on a smaller cheaper Xbox One. Console makers do this every few years to try and re-invigorate sales. They may even be toying with the idea of removing the optical drive as they were rumored to have done in the past. There are usually some hardware differences when they do these refreshes, especially since the original SKU is usually still on sale. Slim PS3's for instance came in options with lower disk space. With current gen titles install sizes it seems unlikely that they would cut storage to target a lower price point, but offering a new SKU without an optical drive and perhaps more storage space could be reasonable.
Microsoft may even be hoping that if they can trim the cost down enough that it could stop people who were thinking about an Xbox One but aren't necessarily hard core gamers from going to a cheaper Apple TV or such device. But actually planning such a device as a true competitor? I don't see it.
They'll sell more smaller, cheaper Xbox Ones than Apple will sell Apple TVs anyway. PS4 is at about 30M sales in 2 years, which is an average of 15M/year. If we assume Xbox One is half that, it is still 7.5M/year which is double Apple TV's best sales year so far.
Don't get me wrong, the Xbox One isn't a terrible media solution by any means. But, even if it were the same price as an Apple TV, if I were looking for a media solution I still wouldn't buy the Xbox One. And, if I were looking for a gaming solution, I wouldn't buy the Apple TV. If I wanted both, it would depend more on the type of person I was. If I casually game, but on premium titles, then an Xbox One, most people though, Apple TV. Given that the market for Apple TV is currently just 4M a year and only the smallest fraction would be on the fence, even with a cheaper Xbox solution, it simply doesn't make sense to explicitly tackle that market.
So, the end of this is; Microsoft is probably fairly sure, based on historical data for prior console generations, that there is a decent market for a smaller and cheaper Xbox One. So, if they can, they will do so anyway. They have no knowledge about how they would fare against Apple TV, so they certainly won't make any sacrifices to that end. Especially since a lot of what has helped them maintain their momentum has been a shift back to focusing on gamers rather than media.
Its true that the Xbox One is Microsoft's closest competitor to something like Apple TV. But, at the same time it is also so very far away and in some crucial areas. It is also superior to the Apple TV in some ways. But most of those are reasons why they are for completely different user segments.
Firstly, how to get there. The rumors seem to be going back to a disc-less design. This should cut costs slightly and most definitely allows for the size to be addressed. But not entirely. Apple TV is TINY (by comparison) and fan-less. Due to the hardware in the Xbox One I just don't think they can ever shrink it to that level or get rid of the fans (without making it something that isn't an Xbox any more). The cost of the SoC may have come down enough to make for some reasonable price adjustments.
I don't really see them making a whole new device either. There is a market for Xbox One, the size of the market for something else is unknown. And Apple TV sales are lower than Xbox One. So, making such a move on a device based on, not actually an Xbox One would be gambling on trying to be more successful than Apple in a field which they are already established in.
Which means, any new device is likely to be a "true" Xbox One. Which leads to the next problem. Content. Until people can use their iTunes libraries on an Xbox One Microsoft is at a disadvantage. They have a decent number of media centric apps. But people, at the moment at least, have more media purchased through Apple. There is also no good means, currently, for streaming from a Windows PC to an Xbox One for media purposes and most of those services Microsoft offers can be had in much cheaper, smaller and fan-less solutions. It is a hard sell.
Yes, an Xbox One would kick the ever living shit out of Apple TV or any of those alternatives when it comes to gaming. Allowing for true console gaming with premium titles. But, if people are looking for or care about that, then they aren't even looking at an Apple TV anyway. In other words, Apple isn't really competing on that front.
So, what do I believe is causing these rumors? Well, Microsoft very likely is working on a smaller cheaper Xbox One. Console makers do this every few years to try and re-invigorate sales. They may even be toying with the idea of removing the optical drive as they were rumored to have done in the past. There are usually some hardware differences when they do these refreshes, especially since the original SKU is usually still on sale. Slim PS3's for instance came in options with lower disk space. With current gen titles install sizes it seems unlikely that they would cut storage to target a lower price point, but offering a new SKU without an optical drive and perhaps more storage space could be reasonable.
Microsoft may even be hoping that if they can trim the cost down enough that it could stop people who were thinking about an Xbox One but aren't necessarily hard core gamers from going to a cheaper Apple TV or such device. But actually planning such a device as a true competitor? I don't see it.
They'll sell more smaller, cheaper Xbox Ones than Apple will sell Apple TVs anyway. PS4 is at about 30M sales in 2 years, which is an average of 15M/year. If we assume Xbox One is half that, it is still 7.5M/year which is double Apple TV's best sales year so far.
Don't get me wrong, the Xbox One isn't a terrible media solution by any means. But, even if it were the same price as an Apple TV, if I were looking for a media solution I still wouldn't buy the Xbox One. And, if I were looking for a gaming solution, I wouldn't buy the Apple TV. If I wanted both, it would depend more on the type of person I was. If I casually game, but on premium titles, then an Xbox One, most people though, Apple TV. Given that the market for Apple TV is currently just 4M a year and only the smallest fraction would be on the fence, even with a cheaper Xbox solution, it simply doesn't make sense to explicitly tackle that market.
So, the end of this is; Microsoft is probably fairly sure, based on historical data for prior console generations, that there is a decent market for a smaller and cheaper Xbox One. So, if they can, they will do so anyway. They have no knowledge about how they would fare against Apple TV, so they certainly won't make any sacrifices to that end. Especially since a lot of what has helped them maintain their momentum has been a shift back to focusing on gamers rather than media.
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