XBox One, PlayStation 4 in competition at E3 in Los Angeles

Sony and Microsoft discussed their competing new consoles, the PlayStation 4 and the Xbox One, at the Electronic Entertainment Expo in Los Angeles on Monday.

The new Xbox will rely heavily on cloud computing, which worries some gamers who are concerned about their privacy:

Microsoft announced last week that the successor to the Xbox 360 must be connected to the Internet every 24 hours to operate, and the system would ideally always be online. . . “There’s ability to put things in the cloud that you want to have computed, so you can take some of the computing capability that you might require locally — or used to require locally — and then have CPUs in the cloud that actually do some background work for the game,” explained Phil Spencer, Microsoft Studios’ vice president. “You’re actually augmenting the power of the box that’s sitting right in your living room.” . . . “For people who are in a completely disconnected state, I think (Xbox) 360 is definitely a great content base for them and a great console, and we’ll continue to invest in that,” Spencer said after the event.

Associated Press

Gamers have also registered their concern about whether they will be able to trade Xbox One games easily after purchasing them. Sony sought to take advantage of these worries, emphasizing that games for the new PlayStation 4 can easily be shared among friends. Yet even if Sony wins over dedicated gamers, Microsoft has a larger market in view:

It’s becoming clear that Sony has an early lead, at least in the public relations wars, with the core gaming audience.In the end, however, it’s not clear if the gaming market is really the one to be courting. Microsoft made it clear with its first launch event last month that it’s got an eye on a larger audience, one that uses consoles for forms of entertainment other than games. ¶ Facing a game market that’s moving toward mobile games and an industry that’s racing toward a clash with streaming video companies, Microsoft is arguably in a better position to market its console to those who see gaming as a part of their entertainment needs. ¶ Shoring up the base is a good idea for Sony, and the company should enjoy this early goodwill — they’ll just have to hope that it translates to sales when it counts.

Hayley Tsukayama

Similar concerns about the future of the gaming market are also confronting the industry as a whole, according to the Associated Press:

The move from standard- to high-definition graphics, as well as the introduction of a simple-to-use doodad called the Wiimote, made the last transition between console generations easy to see — and feel. But it’s been a tougher proposition this time for companies attempting to sell difficult-to-describe consoles to consumers more interested in mobile devices. ¶ Nintendo already kicked off the next generation with a thud last November with the launch of the Wii U, the successor to the popular Wii system featuring an innovative tablet-like controller yet graphics on par with Microsoft’s Xbox 360 and Sony’s PlayStation 3. Nintendo said it sold just 3.45 million units by the end of March, well below the company’s expectations.

Associated Press

For coverage of Apple’s annual developers’ conference in San Francisco, which is also this week, continue reading here.

Max Ehrenfreund is a blogger on the Financial desk and writes for Know More and Wonkblog.
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