Top 10 360 Hardware & Xbox Live @ E3 ‘08

The things we do know about but want to know more

©2006-2008 XboxOZ360-gamer – Aaron Bertinelli

By TWODOGSz

The 360 has managed to establish itself far more successfully than it’s predecessor and has become an industry leader in delivering online gaming and content, along with an ever growing AAA software library. However, since last year’s peak of Holiday 07, console sales have plateaued whilst the PS3 has continued to improve on the back of quality exclusives like MGS4 and whilst the Wii has continued to puzzle analysts, break records and to generally just keep the casual masses eating it up.

We believe it’s time for Microsoft to respond with a smorgasbord of announcements regarding hardware, pricing, peripherals, and a whole lot more for Xbox LIve. So enjoy as we speculate what will not only have Microsoft talking, but the entire industry come the 14th of July at E3 ’08.

So come, join up, sign in, login and generally let us know what you think in the comments below and join us this E3 ’08 as we celebrate our first Electronics Entertainment Exposition with you our loyal readers.

Don’t forget to slip over to our E3’08 Video News Page and check some excellent E3 Game Videos out while you’re here.

Let the fortune telling begin . . .

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10. Netflix

The rumours have been swirling for months, but more importantly there are significant commercial incentives for both parties to integrate the service as part of Xbox Live.

On the one hand Netflix would immediately benefit from immediate access to an established base of 12million members (and growing) who have demonstrated a voracious enthusiasm for online video content and transactions. It would also move Netflix from the PC and into the lounge room, which whilst currently doable requires technical expertise beyond mainstream consumers.

For Microsoft it would further expand its Xbox Live offerings and give it access to a similarly massive install base of Netflix subscribers. Microsoft would also expect that some Netflix subscribers may immediately find the 360 lounge-room focused hardware as a desirable alternative to their PCs, which in turn may drive more console sales on the basis of an increased perceived value (much like the Blu-ray affect on the PS3).

What is most enticing about this prospect, however, is that given the mutual benefits of such an alliance, there would be a significant possibility that subscribers on both ends would not have to pay for the other’s services. In essence after some price balancing, Gold Live subscriptions would be inclusive of Netflix’s services, whilst Netflix subscribers would receive Gold Live for free.

It’s a mouth watering proposition for business, gamers, and film lovers alike so we’d love to get confirmation and details at E3.

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9. External Blu-ray Player

“`There is one key reason this made the list and it is simply that for every denial Microsoft makes, another rumour or leak appears to contradict them.

“`On the one hand Blu-ray beyond the PS3 has had a minimal impact and presence in the broader DVD market. It is evident that in the key markets of the US, Europe and Asia digital downloads are becoming a far more important and dominant form of media consumption, so much so, that Blu-ray as an entertainment device could yet be a mere footnote. On the other hand, gamers tend to be aggressive adopters of new technology and there is likely a market for such technology amongst 360 gamers who also want 1080P films on their consoles.

We’re really in two minds about this largely because it’s up for debate whether offering an external Blu-ray peripheral would be of greater benefit to Microsoft or to Sony. All we want from E3 is a resolute yes or no.

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8. Hard Drive Changes

Much like the price changes further down this countdown, it appears that a new 60G HDD is an almost certainty. And frankly it’s about bloody time!

If Microsoft intends to expand their online revenues and services, such as MMO’s and Netflix, larger HDDs will provide a much larger foundation from which to build the online business and Xbox Live services. It will also increase the presence of the 360 as a fully fledged home media centre and introduce consumers increasingly to Microsoft’s desired digital distribution future.

We believe if they make such a move it should see the 60G become standard for the Pro SKU, whilst the 20G should be dumped completely or transferred to give the Arcade SKU some minimum support. The only problem with this strategy, as seen with the 120G HDD, is the price. It is quite simply outrageous to expect consumers to pay almost AU$200 for 120G HDD, when PC and PS3 gamers can purchase such for well under AU$100.

We expect an announcement at E3 confirming a 60G HDD Pro Unit and a stand alone 60G HDD bundle that includes some Xbox Live goodies. What we don’t expect is Microsoft feeling a bit more generous in regards to its HDD pricing.

(Here are our local $AUD “reduced” prices Arcade is $349RRP, Pro is $499RRP and Elite is $649RRP)

E3 Update: 60GB SKU on sale August ’08 Reduced prices confirmed !

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7. Hardware Improvements

“`Over time Microsoft has continued to reduce the size of the 360′s components. We’d really like some definite announcements around whether or not they will be including the new Jasper Motherboard this year. The current Falcon and Zephyr Motherboards have been a large reason for the reduction in 360 failures and by moving on to Jasper Microsoft could assure consumers that what they’re buying is as reliable as the competition’s.

“`The Jasper Motherboard would not only reduce the size of the CPU and GPU further, but would increase the chance of further retail price reductions as a result of lower production costs. It would also enhance the ability of Microsoft to release a future 360 SKU much slimmer than the current models to appeal to more size-conscious markets, much in the way Sony achieved with the many PS2 redesigns over its lifetime. A third and much more superficial benefit would be a significant reduction in noise. By making the motherboards more power efficient it would also reduce their heat output and as a result require less cooling, which along with a quieter disc drive could potentially make a world of difference to those gamers who find the noise a serious distraction.

We expect at E3 to hear more about Jasper along with an expected release date.

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6. XNA Community Games

Initially announced at GDC 08 and promised as a Holiday 08 release, little else is known about the finer details of how this new addition to the Live service will work. But it deserves attention, because the potential is enormous and it could have industry wide implications.

XNA has already seen the high cost barriers of game design bypassed by putting an easy to learn and easily accessible development tool in the hands of aspiring game designers the world over for little more than the cost of a couple of retail titles. But where the massive potential lies is in the YouTube inspired Community Games service that’s currently in beta. By bringing the games to the entire Xbox Live community at no cost to XNA developers, Microsoft has effectively removed all publishing, distribution and marketing costs in one sublime sweep. It is a win-win for everyone involved.

Microsoft has no costs beyond maintaining and providing the interface for the Community Games service; budding and established game developers can create games at almost zero financial burden; and gamers will have access to an ever growing library of games that will most likely be provided for free, or at least become an additional service included within Live Gold subscriptions, which in turn should drive revenues in the future.

But perhaps most exciting of all are the infinite realms of possibilities hinted at GDC and we hope to see explored further at E3. By removing all barriers of entry for developers and gamers alike, there is the very real potential to see games experience nothing short of a Renaissance where unhindered creativity and innovation see games evolve into artistic, socially-conscious, academic, and entertainment forms that a commercial developer would never risk, let alone gamers ever imagine.

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5. Price Cuts

“`In a costly lesson (sorry) learnt from the original Xbox, Microsoft made sure second time round that they made their machine as cost efficient as possible, even creating a team with the explicit purpose of driving the production costs down throughout the cycle. Most importantly by co-designing their GPU and CPU they ensured that they owned the IP behind the technology and thus they do not to pay expensive royalties on every chip produced.

“`The short term affect was an under cooled machine and hence the $1bn sunk cost of RROD. The long term benefit, however, has been a technically competitive machine that is far more cost efficient than Sony’s PS3 which is heavily burdened by lifetime royalties, R&D costs of Blu-ray and the Cell processors, and the significantly higher production costs.

This has left Microsoft in the enviable position of an increasingly profitable machine whilst its main competitor struggles to break even and is under shareholder pressure to not reduce retail prices. So it’s no surprise that price cuts are all but confirmed.

What we’d really like to see is Microsoft exploit this position and go for the commercial jugular with a much larger cut than the market expects (up to US$100). But given the improved hardware coming later this year and maybe Microsoft wanting to avoid the appearance of a fire sale, we expect to see more conservative initial world wide reductions of around US$50 on all models, with the potential of a subsequent reduction leading into Holiday ‘08. Not only would the value argument of the console skyrocket along with sales volumes, but it would see the Arcade SKU cheaper than the Wii and under the mass market price point of US$200. It would also put the Pro SKU on track to break the same benchmark within a further twelve months.

As a result, at the very beginning or just before E3, we expect the first US$50 price cut to be announced so as to give other announcements more breathing space at the convention proper.

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4. Xbox Live Evolves

Closer to the top of this list you’ll find our thoughts on Avatars, MyLive and a rumoured 3D Dashboard. But Xbox Live still has much more beyond that that we may see announced or improved at E3.

As evidenced by the endless and often fake Spring/Fall update lists, when you spoil gamers with unparalleled features they’re unsurprisingly going to want more of good thing than less! Unified clan support, bigger friend’s lists, group video and voice chat, a sent messages tab, free casual XBLA titles, and a revision of membership fees are all part of our wish list. We even expect a web browser at some point which would not only further expand the 360′s abilities as an online entertainment centre, but would make perfect commercial sense for Microsoft to further deliver it’s technology and products (Internet Explorer) through the 360 in a Trojan Horse like manner.

We’d also like to see the expansion of the Video Marketplace and other content like “Inside Xbox” into other territories (even Australia perhaps?). But perhaps most urgently we’d like to see an overhaul in the policing and enforcement of Gamerzones in order to protect family, recreational and younger gamers from the profanity and Uno sex shows of the underground and pro zones. It would a particularly timely move given the increased focus Microsoft is now placing on the casual market.

Xbox Live has revolutionised console gaming, and we expect the advances that Microsoft’s competitors have made in recent times will only spur on Microsoft to do it all over again, starting from next week!

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3. A New Dashboard

“`The current 360 dashboard was a sleek and functional system, but as the importance of online content and social networking has increased, the dashboard has begun to show its age particularly within the Marketplace. The irony is that Microsoft has essentially become a victim of their own success.

“`Before the entry of Microsoft into the console market, online communities and gaming was largely ignored by Sony and Nintendo. Now with an online community of 12million and growing, Live needs a resolute overhaul to accommodate these much larger than expected numbers with fully integrated Web 2.0 functionality.

What would we like to see? Well the rumours say a 3D dashboard is on the way and given the designers behind the new dashboard are none other than the company behind the famous interface in the film Minority Report, we’re pretty excited. Add the potential of motion controls controlling the dashboard, and a much better search and a peer review system akin to YouTube and things are looking promising.

Beyond that all we know is Microsoft skipped their biannual update in preference of significantly expanding the network capabilities of Xbox Live, and we suspect we’ll find out why sometime next week.

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2. “Avatars” and “MyLive”

When our friends over at X3F broke the story of Microsoft’s “Avatars”, you could almost hear gamers collectively branding, depending on their system, as a cynical rip-off of Nintendo’s Wii and Sony’s long in development Home. However, now that the dust has settled somewhat, and we understand the differences between each system’s offerings we can’t help but think it has the potential to be the best of both worlds. On the one hand gamers will get fully customisable 3D personas much like Home. Whilst on the other they’ll avoid the Second Life overtones with animated Rare-ish avatars and the in-game functionality (XBLA & some retail) of Nintendo’s Miis.

But we expect to see Microsoft go a lot further because as cool as 3D Avatars may be they will be rendered useless if there’s nowhere to show them off and socialise with others on Xbox Live. A virtual world or at the very least a new section of the dashboard entirely focused on socialising on Xbox Live would be a logical step and in the process create a new meta-game much like the rudely successful Achievements feature.

We’d call it MyLive, and make it fully customisable just like MySpace, Facebook and yes, Home. However, Microsoft would have the serious advantage over its competitors as the majority of the technology is already implemented in 2D. Universal voice chat, messaging, web cams, achievements, friends lists, peer review and all the other goodies of Microsoft’s XMB along with the massively expanded network infrastructure are already there and ready to go.

We expect to hear more about “Avatars” and the expansion of social networking next week. And if they call it MyLive… well just consider it a lucky coincidence! Jk

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1. “Newton” aka Darwin

“`Of all the rumours and speculation that’s been flying around in the lead up to E3, nothing comes close to the “motion-controller” codenamed Newton. So strong are the rumours and leaks we’re willing to bet this is a forgone conclusion. What’s not so certain is what it’ll look like; how it will work; whether its bundled with titles or an SKU; and most importantly if it’s worth the attention of gamers, hardcore and casual alike.

We’ve posted numerous articles speculating on the device and its prototypes, including hand drawn blueprints and photographic evidence. But whatever Microsoft unveils next week, it must significantly differentiate and improve upon the Wii-remote without being too much of a change to alienate the casual demographic Microsoft is largely targeting. Even if the Newton achieves this, Microsoft will then need to show an undying commitment with an extensive line up of quality “motion” titles to draw the casual gamer in, without alienating their hardcore base. In fact, a truly inspired move may be to not only make the controls work with upcoming titles, but backwards compatible as seen in these videos. Targeting the casual market is all well and good, but getting the sizable hardcore market on side by offering a fresh experience with current AAA titles like Halo 3, Gears of War, Bioshock and the EA Sports range, would be a stroke of genius.

Either way it’s a mightily bold gamble, perhaps the greatest Microsoft have taken in gaming since they entered the console gaming market with the original Xbox. But with the 360 now price competitive with the Wii and the simultaneous implementation of many of the measures we’ve listed above, it has the potential to not only substantially elevate and diversify the consoles sales but quite possibly turn the entire market on its head!

(Ed Note: Be sure to check out the rest of our E3 Top 10′s and visit the XboxOZ360-game E3-’08 Video News Page when you’re finished here and let us know what you think.)

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