Software means more to Xbox than Project Scorpio

Microsoft has bet big on Project Scorpio to generate Xbox sales and hype. Their PR cycle projects confidence: Scorpio is a large focus of their E3’s presser less than a month away. They also provided an extensive walkthrough of the hardware specs to Eurogamer weeks ago.

Yet Microsoft is kidding itself if it thinks the market for Scorpio is anything larger than a small niche. Raw horsepower won’t win a console war. In fact it’s the opposite: software, not hardware, would be transformative for Microsoft in the long run.

Scorpio, like the PS4 Pro, is a non-starter for the price sensitive casual market. A Project Scorpio will cost likely $500 or more, double the cost of a baseline PS4 or Xbox One. That’s too expensive, especially given both low and high end consoles share the same game library.

Scorpio also falls short for the other end of the gaming spectrum: high end, graphics hungry, PC-only gamers. PC gamers don’t need Scorpio for more games; Microsoft future first party titles are simultaneously released on Xbox and PC thanks to Xbox Play Anywhere. And Scorpio’s specs won’t ever match the highest end PCs. Nor are consoles upgradable, destined to fall further and further behind their PC brethren.

Therein lies the rub – Scorpio as a pure hardware gamble is caught between two sides. Casual buyers won’t pay extra. High end, PC-only gamers won’t be impressed by the console’s power, especially over the long run.

Scorpio’s remaining sweet spot is narrow, an enthusiast console base with a high end setup (4K, HDR) to benefit from Scorpio’s extra horsepower. But that audience will split between the Scorpio and PS4 Pro. Scorpio will be an obvious choice for existing Xbox players and those that need best in class console performance. Yet Sony’s premier console will still hold appeal among existing PS4 owners. The Pro’s lower price, huge network penetration, and the high profile PS4 exclusives on the horizon (Death Stranding, The Last of Us Part II) are big factors.

Killer hardware only gives Microsoft a single when they need a triple or better to disrupt the momentum behind the PS4 and Steam on PC. If Microsoft wants to stay in this fight, they need to aggressively add quality games unavailable on a Sony console.

The catch is, victory doesn’t come from snatching exclusives away from the PS4. Developing net new first party IPs is a risk that’s mostly fizzled for Microsoft as of late. Sunset Overdrive and Quantum Break didn’t leave a lasting impression. Combine that with the cancelation of Scalebound and Fable Legends and you get the sense that chasing after console exclusives isn’t Microsoft’s forte.

Instead, Microsoft should go after formerly PC only games, especially those on Steam, and bring them to Xbox and the Windows Store. It’s a natural fit for Microsoft. They’re already huge in the PC space; PC only game developers have confidence Microsoft won’t pull out of their market anytime soon. And the Xbox One and Scorpio are running on a Windows kernel as its base. Microsoft has also been historically much more open to “PC like” features – peripherals, custom mods – on their own consoles than Sony. The sales potential of PC only games to an Xbox audience could be immense.

If Xbox has a much stronger library, the competitive market for a high end console should shifts dramatically. Now Microsoft has the edge on both hardware and games over Sony. Formerly PC only gamers could find Xbox as a logical extension to play their favorite PC titles in the living room.

Granted, Phil Spencer and the rest of the Xbox One team deserve immense credit for turning a dire launch situation around quickly. And their hardware advances, from backwards game compatibility to custom controllers, show they have a decent pulse on what gamers want. But a console with impressive rendering abilities is only part of the equation. Better software needs to appear hand in hand.