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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 20, 2013 at 12:16 PM

Microsoft’s Xbox 720 reveal: Who, what, when, where …

The video-game industry’s health meter is blinking red, and its ammo belt is nearly depleted.

Industry players are crawling through the darkness, frantically looking for first-aid kits and new weapons to get back into the action.

Down one path a pulsing green light beckons, promising resuscitation, new capabilities and another round of fun.

The light is coming from Redmond, where on Tuesday Microsoft will “reveal” the third version of its Xbox in a high-voltage news conference that will broadcast around the world.

Here’s my viewer’s guide to the big event.

Who: Don Mattrick, president of Microsoft’s Interactive Entertainment Business, is likely to unveil the new device, which could push his group’s sales past $10 billion next year. He’ll be joined by game-industry brass and perhaps celebrities highlighting Xbox music and movie capabilities.

The first Xbox was unveiled in 2001 by Bill Gates and pro wrestler The Rock. My guess is that stars of the new “Star Trek” movie will be on hand Tuesday since the movie and Microsoft have a marketing partnership.

What: Hints of the new Xbox have been trickling out for more than a year, including an internal document that surfaced last summer revealing that the new console will have a Blu-ray disc player, a new version of the Kinect motion and voice sensor and additional TV capabilities so it can be used as a full-fledged set-top box.

The console is expected to have a PC-like architecture with   AMD processors, similar to Sony’s approach with its upcoming PlayStation 4. This will make it easier for developers to create games for multiple platforms, including consoles and Windows PCs.

For a while it appeared the new Xbox would require a constant connection to the Internet. But after that caused an outcry, a “leaked” memo appeared, indicating Microsoft had backed off this plan.

Still, it’s likely the full experience of games on the new console will require players to be online. Newer games are built largely to be played with others online. Consoles may also offer lower-priced online games in which players are encouraged to buy digital items. The new consoles are also designed as gateways to a growing lineup of online services.

When: Tuesday’s event is part of an elaborate marketing program building anticipation for products expected to go on sale in the holiday season. Sony held a similar preview event in February, providing an early glimpse of PS4 games and console specifications, but it didn’t show the actual console.

Microsoft image of the tent it's using for the "Xbox Reveal"

Microsoft image of the tent it’s using for the “Xbox Reveal”

Where: Microsoft is promising to “reveal” its console Tuesday in Redmond (in the tent pictured here), but it’s likely to withhold some details until June 10, when it’s holding a larger media event at the E3 game conference in Los Angeles. That’s where Sony will “reveal” the PS4.

Both consoles are likely to be on sale in November, pitted against Nintendo’s Wii U console, which went on sale last November.

Why: Something has to happen soon for the traditional video-game business, which has seen steady declines over the past two years as the current generation of consoles moved into its twilight years, and gamers spent more time and money playing cheaper online and mobile games.

Last month, U.S. console sales fell 42 percent and overall sales of game products retail fell 25 percent, according to NPD.

Microsoft’s current Xbox 360 has been outselling other consoles, but the platform’s sales have slowed, falling $864 million, or 13 percent, in the past nine months.

Last month, Electronic Arts, one of the largest game producers, laid off hundreds of employees and closed several studios, including a PopCap studio in Vancouver, B.C.

It’s not that people aren’t playing games anymore. They’re actually playing more, and more people are now considered gamers. Overall game play increased 9 percent last year, according to NPD.

Gamers aren’t just teenage boys now. The average player is 30 and nearly half of the people playing games are women. Games are played more often now by adult women than boys 17 or younger, according to the Entertainment Software Association.

Globally the game market is expected to expand 7 percent a year on average through 2016, reaching $83 billion a year, according to PricewaterhouseCoopers.

Microsoft chart of console market growth

Microsoft chart of console market growth

Last week, the Xbox team talked up the business, noting that each generation of consoles since 1999 has expanded the market and had more staying power. Eight years into the life of the Nintendo Wii, PlayStation 2 and the first Xbox, there were 173 million consoles sold. Eight years into the current generation, the “installed base” of consoles is 238 million.

The implication is the next generation could approach 300 million units, assuming people don’t decide to play games just on iPads and smartphones instead.

How: Whether you’re interested in the new Xbox or not, it will be hard to avoid hearing about it after Microsoft’s eight-core marketing machine fires up later this year. Some reports have speculated that the new Xbox is called “Infinity,” but I’ll bet that refers to Mattrick’s marketing budget, as he sets out to get the business rolling in green again.

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