To be sure, Microsoft is in a much better place now than seven years ago. After four years of running an unprofitable second to Sony, Microsoft was more than ready to move on from what the company had openly described as a test bed. In fact, Microsoft was so desperate to get its console to market that the company was willing to ignore technical problems that would go on to cost them more than a billion dollars. And much as that hurt, Microsoft (if not its customers) would probably still say that the headstart was worth it.
Important as that heardstart was though, what really pushed the Xbox 360 over the top was Microsoft's ability to benefit from prevailing trends while addressing the problems with its original console offering. The controller ended up being refined to perfection, online capabilities were significantly expanded to keep pace with the market's growth, and downloadable games were legitimately emphasized on a console for the first time. The only real blind spot in Microsoft's grand plan – aside from those aforementioned technical troubles – was the potential for wooing the casual audience, which Nintendo neatly exploited with its mainstream success, the Wii.
Come 2013, Microsoft will be looking to continue reducing that blind spot while exploiting the latest trends with a new Xbox console. Already, reportedly leaked documents are offering a glimpse of what is to come, including full support for cloud gaming. Of course, your mileage may vary as to whether or not those documents are real. With that in mind, here are a few more trends that Microsoft might want to keep in mind for the future.
Microsoft has profited handsomely from Xbox Live's subscription model to this point, even giving the service a price hike in 2010. But while Microsoft has been able to rest on its large, entrenched userbase to this point, things are changing fast. Fast enough that the company might want to seriously reconsider its model come the beginning of the next generation.
At the forefront of this shift is PlayStation Plus, which has successfully evolved into a very appealing premium service. For less than a Gold membership, PS Plus offers a host of benefits, including a rotating list of retail games like Warhammer 40K: Space Marine and Infamous 2. That's on top of the fact that the basic service supports Netflix streaming and online play. Though still not as user-friendly as Xbox Live, it's a very nice bargain.
With free entertainment options proliferating rapidly, and the PlayStation Network pushing harder than ever, now is a good time for Microsoft to reconsider its online business model. Microsoft doesn't neccessarily have to match Sony's model point for point, but it sure would be nice to get a handful of free games on a rotating basis. If nothing else, it would take away some of the sting of having to pay $60 per year for the right to be insulted repeatedly online. Also adding to the pressure is Nintendo's assurance that the Wii U's online offerings will be free. Nintendo has started the trend of the next-gen, and it's pricing its services at the low, low price of free.
When the Xbox 360 was first released, downloadable games were still something of a novelty. Then Geometry Wars: Retro Evolved quickly became an industry obsession and carried the Xbox 360 lineup through the initial disappointment of Perfect Dark Zero and all the way into The Elder Scrols IV: Oblivion and Gears of War. Downloadable games have only become more important in the intervening years, eventually outgrowing the artificial limits imposed on them. Now Microsoft not only offers a huge catalog of XBLA titles, but a large number of popular retail games as well. That trend is expected to continue well into the next generation, possibly even supplanting traditional brick and mortar outlets as the preferred way to buy games, as many argue it has on PC.
Microsoft can continue to benefit from the steady growth of downloadable games by taking a few lessons from Steam. Among them, Microsoft needs to do a better job of highlighting great content on the main page, particularly in the case of indie games. Cthulhu Saves the World is but one game that saw a substantial sales boost simply by virtue of jumping over to Steam. With indies continuing to grow in popularity thanks to a strong community of developers and initiatives like the Humble Indie Bundle, indies are more popular than ever. But a lot of people are buying those indie games on Steam simply because those titles are more visible. The huge number of bargains and sales probably don't hurt either.
So long as Microsoft streamlines their online store and introduces more events along the lines of 'Summer of Arcade,' the company is probably fine. But if Microsoft is smart, the company is marking the ever-growing popularity of inexpensive software, and thinking about ways to build upon that trend.
During its E3 2012 media briefing, Microsoft introduced SmartGlass, which may be seen as a response to Sony's push on PS3 and Vita connectivity and Nintendo's Wii U. Whether you feel those comparisons are overblown, it's clear that mobile connectivity will soon be a part of all console gaming experiences. One day soon, almost everything will be connected to your smartphone or tablet, and that will go as much for your next-gen Xbox as your television or computer.
What Microsoft has shown of SmartGlass so far is a good start. While it won't support nearly as many games as the Wii U at launch, it boasts a strong range of features, including integration with services like HBO Go. Microsoft can still go further though. Using SmartGlass, it should be possible to send pictures, videos, and other media to the television with a single swipe, for instance. It should be possible to stream games from the tablet onto the television without having to plug in the HDMI cable. And, of course, asymmetric multiplayer should be heavily supported (imagine playing a game with a tablet and the Kinect).
There are many more possibilities, of course. But the bottom line is that mobile integration is only going to become more common in the years to come. Ideally, it should be a big part of the next Xbox.
When the Xbox 360 was unveiled in 2005, YouTube was a month old. Facebook had been around barely a year. Twitter didn't even exist yet. That Microsoft knew enough to include social components like achievements and party chat out of the box demonstrates a certain amount of prescience on their part. But Microsoft will need to go still further with the next-generation Xbox.
Rather than trying to find new and interesting ways to clutter up Twitter feeds though, Microsoft would do well to take a page from the Nintendo 3DS and its emphasis on 'collecting friends.' One possibility is to have the avatars of everyone met playing games online pass through a minigame in the vein of the exceptionally cute StreetPass Quest, with coins being used to purchase freemium items from the Avatar shop. Sure, it may sound a bit silly to you, but people eat that stuff up. Take a look at your friends feed sometime, and note how many people dropped real money on an RC Car or a lightsaber for their virtual Xbox 360 character.
As with the mobile integration (which can undoubtedly play a role here), social functionality can take any number of forms. The 3DS StreetPass is one example, as is the Autolog introduced in Need for Speed. But regardless of how the company goes about it, Microsoft will want to go in knowing that it's one feature that people will be paying close attention to.
This is good news for Microsoft, even if it will make some of the gaming faithful wince. The utter failure of Steel Batallion: Heavy Armor certainly didn't do much to help the peripheral, which has mainly subsisted on Harmonix's outstanding Dance Central series to this point. But like it or not, the Kinect is popular, and it will definitely live on into the next Xbox console.
The reason for the Kinect's continued success may be found in three simple words: families love it. For Microsoft, that opens up a whole new world of possibilities. Families can justify a next-gen Xbox purchase as a sound investment if it offers a nice selection of streaming services, complete Kinect support, and plenty of age-appropriate software for the kids (and don't forget Halo 5 through Halo XX for Mom and Dad).
Some may argue it probably needs a Blu-ray player to be really be a done deal, but it's at least 75 percent there at this point – enough that Nintendo should probably be looking over their shoulder as it fights for top spot as the family's go-to entertainment system.
The fact is that Microsoft has been building to this for a while. The Kinect allows Microsoft to market the next-gen Xbox as the all-in-one box that the company wanted it to be from the beginning – a center for television, movies, and games that includes heavy mobile integration and a hands-free interface.
For Microsoft, at least, that's the future. And you know, Microsoft may be right.
Kat Bailey is a freelance writer based out of San Francisco, California. Her work has been featured on multiple outlets, including GamesRadar, Official Xbox Magazine, gamesTM, and GameSpot. You can follow her on Twitter at @the_katbot.