The pressure is on Microsoft this E3

Microsoft’s E3 presser is a must-see this weekend, and not necessarily for any single game or hardware announcement. It’s because unlike other console manufacturers, they lack any clear long-run trajectory. As the only real wild card for E3 2018, Xbox’s positioning at the show has large implications for its relevancy over the long run.

Conventional wisdom suggests Xbox needs more killer exclusives. Offer the games, and the fans will follow. But at this stage, I don’t see Microsoft capable of making this happen. On paper, they don’t have enough first party studios, and those studios haven’t branched out beyond long-standing IP from the Xbox 360 era.

Nor are Sony and Nintendo standing still. This late in the console cycle, both platforms are hitting their stride. For Sony, the pedigree of The Last of Us II and the hype factor behind Hideo Kojima’s enigmatic Death Stranding sets a high bar. Nintendo is already riding high with a new Zelda and Mario in their back pocket. New Pokemon and Smash Brothers are out later this year with much more to come. Even if Xbox announces four big titles — Halo, Gears, Forza, and a fourth IP surprise — at best Microsoft reaches a draw with Sony and Nintendo.

But Xbox has a larger issue than its game selection: time. We’re now five years into the current console generation. The audiences left on the sidelines without a current gen machine are dwindling. PS4s outsell Xbox Ones at a rate of 2.5 to 1 and Nintendo’s hardware strength going into the holidays is off the charts.

Given this deficit, to stick to the expected — Halo/Gears/Forza to make Xbox loyalists happy, a few indies and 3rd party AAA highlights, more backwards compatibility — won’t cut it. Xbox head Phil Spencer consistently gives one of the most polished, well paced pressers each E3, but it’s not enough.

Instead, Microsoft needs a radical bet to stay in the game. One option doubles down on Game Pass: add more first party titles to the catalog, expand PC compatibility, bundle the service with Xbox Gold, and sell it at a big discount. Another is aggressive purchases of several studios (part of Bethesda or EA?) to ramp up their library quickly. I could even see some left field ideas that lean into Microsoft’s strengths with cloud infrastructure. Players could stream purchased Xbox titles on a smartphone, or sell a new variant of the Xbox One S that’s download only and aggressively priced to compete with both consoles and higher end streaming boxes.

Regardless of exact direction, the element of surprise for Microsoft is essential this year. They have to change the narrative; if we collectively leave E3 with a shrug about Xbox, I’m worried about the venerable brand’s future.