Sony and Microsoft have made their opening moves in the next-generation video game console war. Their next big revelations will come at the E3 game trade show, and this starts with their press conferences on June 10. The age of digital game consoles has arrived, but I’m still worried that the console makers are caught in binary thinking.

In the days before the original Xbox, back in 1999, Microsoft’s knee-jerk reaction to Sony’s threat was defensive. It wanted to stop Sony’s PlayStation 2 from taking over the living room. That’s why it started on the Xbox, and then the company expanded its thinking from there. Both companies came to see their game consoles as Trojan horses, items people purchased for gaming purposes and eventually used for controlling all entertainment. Microsoft and Sony both have credibility as leaders in games, and their eyes are still on a much larger prize of being the hub for movies, music, TV, communication, and everything else.

But gaming was the linchpin. If they failed with that, nothing else mattered.

That’s still the case today. Some described Sony’s press event in February as rambling and Microsoft’s Xbox One announcement as a disaster. But they’re wrong. They’re simply incomplete events, by necessity. More information — some of it which they’re keeping secret for now — will trickle out over time. By the time of the launches in the fall, potential customers are going to know what they need in order to decide whether to invest in one game console or another. Sony showed off games. It needs to show more broad entertainment and services. Microsoft showed off entertainment and services. It needs to show more games.

But both of them need to show that they understand the rights of consumers in a world where walled gardens are full of holes. The difficulty for these companies is that the world has moved on from completely binary thinking. Gamers watch movies. People play games on more than one device. When you acknowledge that we live in a multitasking world with multiple platforms, and when you design your experience taking that into account, then you can win big. This is the way to grab all of the marbles: being transparent, being more open than you should be, and embracing community.

“I really don’t see this as a binary answer,” said Chris Petrovic, the former head of GameStop Digital Ventures, when asked who would win. “Each of these platforms can and will capture a meaningful share of consumers’ share of time and wallet. There seems to be general consensus in the games industry that it will continue to follow the ebbs and flows of its media brethren — movies, TV, etc. — in that the incumbent platforms will still provide the richest, most immersive premium experiences for the enthusiast while the newer platforms will appeal to the masses because they win on price and convenience.”

You can bet that they’ve got the bases covered on the either or questions. Microsoft said it would launch 15 internally produced games in the first year after launch. It also said it would spend more than $1 billion developing games in this generation. Sony can expand its PlayStation Network and tap into its entertainment properties so they work on PS4. Their approaches to their initial revelations so far reflect some choices. Microsoft chose to focus on non-gamers. Sony chose to focus on the hardcore.

The trick is to pay attention to both sides of the binary choices and give people more than just the basics. You don’t want to be perceived as failing to “get it.” And you have to act like you’re responding to and fostering a community.

With every console announcement, fans look for what they want. They want to make this product their own. If what they want isn’t in the console, they complain. With Microsoft, fans didn’t see enough games. With Sony, it was the opposite. They saw lots of games. But fans also complained about how Sony’s event dragged on. They complained about how Sony didn’t even show its box. In both cases, the companies defended themselves by saying they wanted to hold something back and save it for E3.

In the absence of a ton of games to show (OK, they did show EA Sports, Forza, Call of Duty: Ghosts, and a new one called Quantum Break [below]), Microsoft talked about technology like cloud processing, more accurate Kinect, and the instantaneous switching made possible by having three operating systems. Those could turn out to be big advantages. Sony mostly ignored such technical talk, saving it for the geeks who cared about it but leaving some questions hanging in the open. Sony did point out its advantage of having more processing power fully dedicated to running games (Microsoft has to divert precious silicon to handle Kinect’s constant processing requirements). That is how these machines are basically different.

In both cases, nobody answered all of the questions that gamers had. The fair criticism is that they should have had more solid answers on the consumer rights issues that people care more about these days: backward compatibility, used games, and always-online play. All of these relate to whether a consumer has gotten a fair shake, can preserve their investment, and can choose how much they want to be engaged with one product in a sea of other products that they use. By moving to crack down in some way on used games, the companies are taking back something that they once gave as a right to consumers under “fair use” agreements. They should have seen the concern coming from their fans (based on the fan reaction to Electronic Arts’ always-on debacle with SimCity) and headed it off as much as possible. Microsoft and Sony say they have policies in place that will fully describe what they intend to do. That’s not completely reassuring to consumers.

The problem is that, as with the actual launch date and the pricing, is that a competitor would love to know how its rival will deal with these consumer rights issues and act on it. Policies are the easiest thing in the world to change or copy. Software is next. And hardware is the hardest. But in a digital world where anything is possible, these problems have to be viewed in a different light. With backward compatibility, putting in the hardware to make an old game work on a new system is very expensive. It means, at the very least, you would have to put an IBM chip in a box that now has an AMD chip. On top of that, gamers care about backward compatibility in the beginning of a new console generation, but they rarely play old games on new systems.

But the digital realm is where this gets interesting. With cloud streaming technology, it’s technologically feasible to host a game in a data center and let someone play it with any web-connected hardware. If they wanted to, Microsoft and Sony could put digital versions of their old games up into the cloud and make them accessible for consumers. But then we get to the real issue here: a scarcity of engineering talent. The time and resources it takes to do this right could be better spent making a new game system and its live services better.

Those are logical explanations for ditching backward compatibility. A similar case could be made for requiring an always-on connection and for curbing used game resales. But these problems expose a lack of trust. Consumers don’t like walled gardens anymore, and they mistrust anyone who has one. Sony and Microsoft have to regain their trust by showing off outstanding games that will make them drool. And they should also unveil something in the digital realm that truly sets these consoles apart from the last generation.

These machines have gone digital. They’re web-connected. Microsoft will have 300,000 servers available to provide services to them. We want to be so impressed with what those services and digital games can do that we’ll forget about those rights issues and gladly fork over our money. In fact, I hope that we exit this PlayStation 4/Xbox One generation thinking that digital gaming — always-connected and easily accessible — is better than traditional disk-based gaming.

In this column, I’m guilty of my own binary thinking. At E3, we’ll also hear from Nintendo. Maybe it would be cool if a console maker convinced Nintendo to give up hardware and make its software available on a rival platform, as an exclusive king maker.

And beyond E3, gamers will be listening to what Apple has to say about gaming at its own Worldwide Developer Conference. They’ll also be figuring out what happens with Android solutions such as Ouya. Gaming experiences are going to be everywhere. The more we focus on just one thing, the more we’ll be surprised by another. I’m not sure what to call it. But whatever the opposite of binary thinking is, do that. That’s my advice for Sony and Microsoft.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft officially unveiled its next generation console, the Xbox One, on Tuesday. The company is billing it as an all-in-one entertainment box, capable of switching between games and multimedia applications quickly and seamlessly. Although Microsoft hasn’t release date and price, we do know that the console doesn’t feature backward compatibility, requires an Internet connection in some form, and comes with a Kinect motion sensor that apparently never turns off. GamesBeat’s Jeff Grubb has a nice roundup of information on the device here.

We don’t have all the details yet (and some of the details we do know are downright confusing), but this hasn’t stopped people on the Internet from voicing their opinions on the Xbox One. And since this is the Internet, many of those opinions are in snarky meme and animated GIF form. Here are some of the best we’ve seen so far:

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Days after finalizing a $1.1 billion Tumblr acquisition, and coming hot on the heels of a massive image-buffing retrofit of the photo-sharing community Flickr, Yahoo has bought yet another company.

Finally, after years of virtual irrelevance at the search/media company, Mayer has Yahoo doing huge and interesting things again.

PlayerScale, a cross-platform game infrastructure startup that provides tools for games played by 150 million users on platforms such as iOS and Android, announced the acquisition on its site today. And — unlike recent Yahoo acquisitions like Astrid – CEO Jesper Jensen said the company would continue to operate as it has, supporting over 2,600 developers and 4,000 games.

In fact, he added, PlayerScale is adding 400,000 users a day.

“With Yahoo’s backing, we can crank out awesome products and improvements to our platform faster than ever before,” Jensen said.

Source: Sean Ludwig

Marissa Mayer

That would be a major change from recent Yahoo acquisitions such as Stamped, OnTheAir, Snip.it, Alike, Summly, Jybe, and Astrid, all of which have been shuttered or put on notice. But it makes sense, given PlayerScale’s volume of business and growth rates.

And the move seems to make sense given Yahoo has now signaled a move into casual gaming on iOS, Android, Facebook, the web, and even Xbox.

PlayerScale’s platform helps game developers with pretty much everything they need to make their game platform work, except the game itself. It includes payments, chat, analytics, virtual currencies, distributed caching, authentication, social sign-on, leaderboards, localization, and more.

Here’s CEO Jesper Jensen’s announcement in full:

Today is a great day — both in our journey with PlayerScale and for users of our Player.IO product. We are happy to announce the next big step toward our goal of building the best possible gaming infrastructure platform: we have been acquired by Yahoo!. And don’t worry, we’re not going anywhere. Our platform will continue to support the same great games that you love playing today … and in fact, it will only get better from here!

Our goal has always been to help developers build the best possible games, without having to worry about building and scaling the infrastructure required to operate today’s biggest successes. In working with the folks at Yahoo!, it has become clear that we share this passion.

We have spent the past four years growing a three-person startup into a product that powers games played by over 150 million people worldwide and we are adding over 400,000 new users every day. In the last four months alone, we have increased our daily user growth rate by almost sixty percent. With Yahoo!’s backing, we can crank out awesome products and improvements to our platform faster than ever before. We will continue to support our existing product and deliver new services to help you grow and manage your success in cross-platform gaming — whether it’s casual, social or mobile.

Today marks a milestone for PlayerScale and I want to sincerely thank the team, our developers and millions of users for the adventure so far and can promise there will be more to come.

- Jesper Jensen

Image credit: Sean Ludwig/VentureBeat

Following Microsoft’s 60-minute press conference on Tuesday, in which it revealed the Xbox One to much anticipation, an unfortunate feeling of melancholy grew inside me. It was immediately and painfully clear that I am no longer Microsoft’s target audience. Instead, the company’s new key demographic is the casual audience that has kept the Xbox 360 selling in recent years, and with this choice, the Xbox brand has transformed from a gaming system to an all-in-one entertainment device.

Over the course of the hour-long press conference, I slowly felt more and more out of place as if this wasn’t intended for me … as if it wasn’t a place I should or want to be. The wild ride of buzzwords and snappy features introduced us to an impressive multimedia center — one that could stream films, play live television, and initiate video chat via Skype. Microsoft gave a worryingly small amount of attention to games. This new console will obviously be innovative in how it “Kinects” people (har har), but the question I regularly asked myself over that hour was why, as a gamer, do I care about most of this?

It was frustrating to watch many big names march out and discuss features that will barely impact or improve the future of gaming. Being able to review fantasy football or basketball leagues during live matches sounds cool, but as I’m not a massive sports fan, the early sections of the press conference might as well have been white noise. Equally frustrating was how anything that did reference the gaming potential of the Xbox One did so through loose terminology — merely suggesting how the console was going to offer enhanced “experiences” or “content.” I can’t say I saw anything that could provide the innovation I was sorely hoping to see.

At least we now know some of the specs for the Xbox One: 8 CPU cores, 8GB of (nondescript) RAM, multichannel 802.11n WiFi, and a Blu-ray drive definitely sound good. However, instead of showing us how this technology will be put to use, such as through the numerous demonstrations we saw during Sony’s PlayStation 4 press conference in February, we merely witnessed a handful of cinematics and teaser trailers.

While the games look good, the graphical fidelity isn’t mind-blowing. The visuals are not as ground-breaking as the HD leap from the previous generation. And sadly, the only new creative work announced, Remedy Entertainment’s Quantum Break, was a predominantly live-action trailer sprinkled with in-game cinematics. This teaser was severely underwhelming and didn’t provide nearly enough information (assuming the game isn’t about a little girl who makes boats collide with bridges) to generate serious interest.

Because we saw nothing resembling real gameplay, it’s difficult to picture how each experience will feel when it’s eventually in our hands. If these new titles do nothing but improve graphics, it’s hard to be too excited about them. Even the new Call of Duty felt a little flat. Eric Hirshberg, the chief executive of Activision, presented a lovely trailer for Call of Duty: Ghosts, but I had to chuckle when Mark Rubin of Infinity Ward added, “America’s military is in disarray, and as the player, you’re the underdog fighting back against superior forces.” I don’t want to steal your thunder, Mark, but I’m pretty sure that’s the storyline of every Call of Duty since Modern Warfare 2 — not to mention numerous other shooters, such as Homefront. But hey, we get a really fancy-looking dog, so that’s innovative, right? … Right?

Still, the most surprising element of the conference was not what Microsoft did mention but what it didn’t.

Microsoft had the gaming world’s attention; the show was its chance to put millions at ease regarding the worrying issues of digital-rights management and preowned games. Rather than addressing any of these concerns, Microsoft chose to ignore the community’s queries about persistent Internet requirements. This decision has led to evasive and confusing explanations spawning from Twitter or interviews that went up immediately after the event.

It now appears that Xbox One will require access to the Internet to install games and enable regular play. Used games will also involve an activation fee. If you’re going to take such drastic actions, Microsoft, at least have the balls to come out with it head on and explain why you feel such changes are necessary and how they potentially improve your console. Don’t sweep our questions under the rug and hope we forget about it because I can assure you — we won’t.

Other interesting aspects barely covered at the show were the alterations to the controller and computing assistance from the cloud. I understand that the Electronic Entertainment Expo (E3) is imminent and you don’t want to blow your load now, but gamers need a reason to be excited for your console, Microsoft. Making a lackluster first impression can only hurt your sales potential. The dip in value of Microsoft’s shares — and the consequential increase in Sony’s — is evidence of this.

Microsoft would be wise not to forget who bought the Xbox 360 and the original Xbox during their infancy: core gamers. These early adopters and evangelists will buy these consoles at any price because they have a desperate need to play great games that they can only experience on Xbox. Unfortunately, Microsoft has done very little to prove we need the Xbox One right now. The system’s new focus as a futuristic hub that houses all your entertainment needs may backfire as the intense hardware and forced inclusion of Kinect will likely lead to a substantial price point. The casual sector probably won’t experience the same uncontrollable craving for new content as the core gamer and may keep its distance until the price drops.

The beauty of the Xbox 360 was how its target market migrated from core to casual slowly as its price fell and multimedia functionality improved. After all, $200 isn’t an overwhelming cost for a system that can fulfill multiple functions in the home, and the eventual introduction of the Kinect presented additional novelty for young children and new gamers.

Now Microsoft seems confident that the casual market is ready to throw down considerable cash to replace their 360s with a new and improved Xbox, and it has bypassed the core gamer almost completely. But will the casual market be willing to spend double or more of the current cost of a 360 just for enhanced social and multimedia functionality? Do people like our parents really care about a device that can make phone calls while they watch a movie? The system will obviously sell after release, but what portion of the casual audience will pass it up, and how big an impact with this have on Microsoft?

Maybe I’m speaking prematurely. E3 is right around the corner, and Phil Spencer, the corporate vice president of Microsoft Studios, did make a bold statement announcing 15 exclusive titles for Xbox One within its first year of launch. Even still, I’m dubious how many of these 15 will actually release in that time. Console launches rarely ever go as planned, like with the Wii U’s debut games lineup. I also wonder how many of these 15 will be exclusive sports, fitness, or family games for the Kinect, which core gamers have close to zero interest in.

I hope I’m wrong. I hope Microsoft comes out at E3 and wows us all with some incredible new intellectual properties and a revelation in how the Xbox One will change how we game. Unfortunately, right now I can count the things that interest me about this new Xbox on one hand.

Thanks for reading. For this and other rambles, please check out my blog or follow me on Twitter.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on the Xbox One reveal, check out our complete coverage.

Click. Click. Click. Click. That was the sound we heard as we went inside the previously secret lab where Microsoft is testing game controllers for the Xbox One game console. It’s the sound of a robot pushing a controller four to five times a second, which is probably faster than you’ll be doing if you get your hands on these controllers. At the Xbox One revelation yesterday, Microsoft took the press through the labs to show how thorough its research was in devising a controller that was just right for you.

Game controllers are a critical accessory that can make or break a system, particularly for hardcore gamers, who develop passionate feelings about the devices that they hold for hours at a time. If there are problems with the controller, it could cascade into a general dislike for the console, which is anticipated to be a multibillion-dollar platform. Fortunately for Microsoft, the feedback yesterday from people who held the controller is positive. It isn’t dramatically different from the current Xbox 360 game controller, and that’s a good thing.

Those with long memories will remember what an embarrassment Microsoft faced when its first game controller for the original Xbox in 2001 was too large, partly because it required two slots for bulky flash storage cards. Anyone with small hands couldn’t even wield the bulky thing well. Microsoft quickly redesigned the controller to be smaller. Since that time, the company has learned a thing or two about industrial design.

With the Xbox 360, Microsoft created a widely acclaimed console controller with the help of outside industrial design companies such as Astro Gaming in San Francisco. But this time, Microsoft was able to do a lot more of the process inside its own walls, said Carl Ledbetter, the senior principal creative director and a leader of the Xbox One industrial design. During our tour, Ledbetter said the team in one building could create a design and walk it over to the Model Shop in another, where Vince Jesus, the lab director, could print out a 3D prototype. That enabled Microsoft to preserve secrecy on the whole project more easily.

“We could bring people in-house and watch them play games in Studio B,” Ledbetter said. “We watched them, with their permission. We videotaped them.”

One of the big changes is a new magnetic trigger that feels different when you pull it. The haptic triggers give you immediate touch feedback. The device also has much more accurate and nuanced force feedback. Older controllers would simply shake when you were shooting a gun or during an intense part of a game. But the force feedback on this sends you different signals depending on what is happening. If you are driving a car, you can feel the bump of the wheels on the road, and you get a different sensation when you hit the brakes.

You can also get precise feedback that feels like a beating heart. Together with the fact that the new Kinect can actually detect your heartbeat, this feature could make for some very interesting effects in future games. The device can simulate a different kind of feedback when you fire a gun. You can feel the rumble of helicopter rotors in another demo.

The device does not have a touchpad or “share button” like Sony’s does with its new PlayStation 4 controller. But Microsoft’s device includes an infrared LED on the front of controller to enable seamless player pairing and identification. Using Kinect, Microsoft can clearly identify a person who is using a controller. The results — players easily jump in and out of games.

Ledbetter said that gamers didn’t really complain about the Xbox 360 controller. But there were things that annoyed them. People with bigger hands felt the battery case on the bottom of the controller get in their way. The screw holes on the bottom of the grip and a plastic seam were also things the gamers could feel. This new controller removed those problems. The seam no longer runs across the bottom of the grip, Ledbetter said. You can still change the batteries. Everything felt nice in my hands.

“People were sensitive to the holes, but we took close-up photos in tests and could tell,” Ledbetter said. “These are things that make it a better product. We wanted it to be more comfortable and we wanted a wider range of hand sizes that could fit it.”

The new controller weighs almost the same as the current Xbox 360 controller. But it feels different because its center of gravity has changed. The battery pack used to be perpindicular to the controller’s front, and it jutted down from the bottom of the controller. Now it has been turned sideways and it is embedded in the body. That was enough to shift that center of gravity so that it feels different in your hands. The AA battery case is still removable. The new controller feels lighter.

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If you had asked me last week to pick a single device that embodied everything Microsoft was trying to accomplish in 2013 and beyond, I’d instantly point to its Surface tablets. After yesterday’s Xbox One reveal, though, the answer is no longer as clear-cut.

Building on its experience with the original Xbox and Xbox 360 (and to a certain extent, its work on the Windows CE operating system for the Sega Dreamcast), Microsoft has fashioned a powerful gaming system in the Xbox One that will also serve as a media hub for the entire family. The Xbox One can integrate with your TV service, multitask like a computer, and give you instant access to media in the cloud.

It’s more a powerful home theater PC than it is a game console, making it a great tool for bringing Microsoft’s services into your living room. More so than the Xbox 360 — which started out as a simple gaming machine but evolved into an entertainment powerhouse thanks to a slew of regular software updates — the Xbox One is built to take advantage of Microsoft’s web services right from the start.

And it’ll only become more integrated over time.

Skype becomes a living room staple

While rumors have swirled for a while that Skype would eventually head to the Xbox 360, it turns out that the service is actually making its console debut on the Xbox One. You can thank the revamped Kinect sensor for that — it’ll be packed in with every Xbox One, and it also sports a much higher resolution camera than the initial Kinect (which essential for getting decent video from wide living room shots).

It’s not the first time Skype has hit the living room. The video chat app is also available on Google TV devices (with a special Logitech camera) and some smart TVs. But launching on the Xbox One will give Skype its largest living room audience yet, and it’s something no other video chat service will be able to easily match.

You’ll be able to participate in Skype group video chats on the Xbox One, and since the console supports true multitasking, you’ll also be able to jump into video calls while playing a game or watching a video. And of course, the Skype integration will let you easily chat with your friends using Skype on other platforms, like PCs and smartphones.

After two years, it seems like Microsoft’s $8.5 billion Skype acquisition will finally pay off with the Xbox One.

Azure brings console gaming to the cloud

Even though it was a fairly minor bit of the Xbox One’s announcement yesterday, the console’s integration with Microsoft’s Azure cloud computing platform has far-reaching potential over the next few years. It could be used to scale Microsoft’s Xbox Live service (the company is already adding 300,000 servers to power Live for the Xbox One, while it’s only running on 15,000 servers right now) and store your games and saves. Most intriguingly, Microsoft also mentioned that it could be used for offloading computational tasks to the cloud.

With Azure’s infrastructure, “Xbox Infinity” may have been a better name for the Xbox One.

The promise of cloud computation means that games on the console will only become more complex over time — imagine better in-game physics when you’re connected to the web or seamless loading for maps for massively multiplayer games. Console developers typically manage to eke out better performance from systems as they age, but with Azure’s cloud computing capabilities, Xbox One games could conceivably keep getting better indefinitely. The only limit will be our Internet connections.

Xbox with a touch of Windows

A simplified version of Windows is one of three operating systems powering the Xbox One, which means Microsoft’s new Windows platform now lives on your television in addition to tablets, PCs, and smartphones (Windows Phone 8 has a big chunk of Windows 8′s kernel, the main component of the OS). You can also see a hint of Windows 8′s flat live tiles on the Xbox One’s new interface.

On the Xbox One, Windows powers nongame applications like Skype and Netflix. This means developers can also create new apps easily — potentially with some of the code they’re using for existing Windows 8 apps. The console also runs an Xbox OS for gamers, as well as a hypervisor that lets the the Windows and Xbox sides play nicely together.

Having Windows baked in makes it easier for Microsoft to integrate even more of its services into the Xbox One down the line. It also helps to power the Xbox One’s intriguing multitasking capabilities, a first for a console. While the PlayStation 3 and Xbox 360 often struggled just to do more than one thing at once, the Xbox One will let you snap apps to the side of the screen just like Windows 8. During Microsoft’s demonstration yesterday, moving between apps on the console was also incredibly fast.

Voice commands have also been greatly improved with the new Kinect, a combination of the Xbox One’s faster processing power and multitasking capabilities. You can command the Xbox One to turn on (which flips on your TV and home theater receiver at the same time) and switch from game to media environments. Instant and accurate voice commands remove the delays it currently takes to navigate the Xbox 360, and it opens the door for even more creative uses of the Xbox One (perhaps as a central hub for home automation, or to remotely give commands to your PC).

I’ve always been intrigued by Microsoft’s initial strategy with Windows 8. Rather than repeat what’s worked with Windows for so long, Microsoft took a radically different route and built an OS that’s optimized for touchscreens. Simply looking at the Surface devices tells you that Microsoft envisions a feature where tablets and laptops merge.

With Windows on the Xbox and Windows Phone 8, it looks like Microsoft’s future isn’t just focused on predicting what computers will look like in 10 years — it’s also attempting to unify its platform on every screen in your life.

What does this mean for Sony?

While Microsoft seems dead-set on showing us the many ways the Xbox One fits into your life with its many services, Sony seems more focused on appealing to gamers with the PlayStation 4. We saw plenty more games during the PlayStation 4′s launch event, and there was also more talk about how its hardware will improve the gaming experience.

I can’t blame Sony for making its pitch to gamers, but Microsoft may have had the better idea by focusing on a more general audience. Microsoft isn’t just targeting gamers — it’s targeting everyone who sits in the living room. And unlike Sony, it has a wealth of services to make that pitch stick.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft’s announcement of its Xbox One video game console landed with a thud on Wall Street, where the company’s shares are falling this morning. Other reactions have focused on what Microsoft didn’t talk about (it’s saving a lot for E3 in June) and consumer rights issues that it didn’t fully address.

Unfortunately, stock traders are reacting to the partial information that Microsoft released yesterday, and they’re not inclined to care if Microsoft was keeping its powder dry until the official E3 press conference June 10.

Microsoft touted features such as the integration of Kinect motion and voice controls into the heart of the system and the addition of new entertainment services and Skype. It showed glimpses of games such as Call of Duty: Ghosts (with exclusive downloadable content), EA Sports titles, and Microsoft’s own Quantum Break, promising they would look awesome. It touted clever hardware innovations such as cloud processing, which uses data centers to complement the processing power inside the machine. It also said it would integrate SmartGlass app controls into the system. Instant Kinect command recognition is Microsoft’s main selling point for how entertainment will become better on Xbox One. But those features didn’t capture a lot of the headlines.

Analyst Michael Pachter of Wedbush Securities said in a research note that he liked what he saw so far but details that will determine long-term success will likely have to wait until the E3 trade show in June. Ben Schachter of Macquarie Research wrote there were great new features in Kinect integration for multimedia, some exclusive content and a confirmed 2013 launch.

“However, we saw nothing earth-shattering, and there was no word on pricing, not that we were expecting pricing just yet, which we think will be absolutely key in determining the pace of adoption beyond the initial launch surge,” Schachter wrote. “If a low initial-cost subscription model is announced at E3, it would be a meaningful positive in our view.  If not, we may need to wait and see if any key must-have platform-exclusive features or titles appear.”

Colin Sebastian, an analyst at Baird Equity Research, said that Xbox One should “be a contender in the living room battle.” He called the “all-in-one” living room box a “significant upgrade.”

“We view the broad capabilities of the Xbox One as likely to appeal to a broad market, although price remains an important unknown,” he wrote.

That battle isn’t just about games but in countering the incursion of iOS and Android platforms into the living room and overall consumer behavior.

“Overall, we believe the Xbox One reveal demonstrates that Microsoft has a capable platform in the living room battle, even if there is a narrow window of opportunity to build share before other platforms gain a foothold,” he said.

Based on reaction in forums, Xbox One hardcore fans appear to be upset about Microsoft’s failure to address three issues that go to the heart of a consumer’s “rights” when it comes to buying and owning their games and consoles. Microsoft said there would be no backward compatibility for Xbox 360 games, not even the digital versions of games downloaded from the Xbox Live Arcade. Microsoft also said there would be limitations on the trading of used games, though it offered a vague promise that it would have a solution for second-hand trading of games. And Microsoft conceded that, while the machine does not require an always-on connection, you will have to log into the internet about once a day to keep the console and games updated.

Kotaku’s Luke Plunkett raised those issues in a story headlined “That Xbox One Reveal Sure Was A Disaster, Huh?” Indie game developers expressed disappointment over the lack of self-publishing of apps on the platform. Rob Fahey wrote for GamesIndustry.biz that “After an awful start, Xbox One must redeem itself at E3.”

Meanwhile, Sterne Agee analyst Arvind Bhatia said that the news was also mixed for GameStop, the world’s largest video game retailer. The fact that Xbox One is launching worldwide in 2013 is a good thing for the retail chain, but he said that Microsoft’s position on used games (including misinformation about that) hurt GameStop shares. Microsoft corporate vice president Phil Harrison told us in an interview that Microsoft would release details later on how consumers can trade in and resell games. Clearly, the nuances of this policy on games — which will have to be installed on a hard drive and tied to a user’s identity — could have an effect on GameStop’s capability to buy and resell games.

“Xbox One appears to be the next logical step in Microsoft’s ambitions to dominate the living room with an all-purpose entertainment device,” Bhatia wrote. “A significant amount of time during the presentation was dedicated to showing nongaming functionalities such as the capability to switch to live TV, browsing, Skyping, etc. The mainstream media has generally praised this console, though the reaction from the gaming-focused media has been somewhat mixed.”

Microsoft said it has 15 games in the works at its own studios for release in the next year. Those include eight brand-new properties, and it is working on a Halo TV show with Steven Spielberg.

Microsoft left out some important pieces of the puzzle, probably to keep Sony guessing. The price, launch date, and supply levels will be important factors in how competitive the machine will be compared to Sony’s PlayStation 4, which is launching this fall.

“The user interface looked simple and seemed to be very responsive with no visual lag,” said Billy Pidgeon, a longtime game analyst. “It’s a powerful console loaded with many features, and it looks like Microsoft didn’t cut any corners. We’ll learn more about the most important aspect of Xbox One, the games, at E3. There could be a downside to the high-powered hardware — the price could also be very high.”

Schachter wrote in his conclusion, “Price, price, price will be key.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on the Xbox One reveal, check out our complete coverage.

Microsoft’s new Kinect motion-sensing system for the Xbox One game console is so good that it’s creepy. Using its sensors, the Kinect can detect your heartbeat, simply by perceiving the pulsing of your skin.

That’s one of the cool — and scary — technologies that Microsoft’s new Xbox One, announced yesterday at a press event I attended in Redmond, Wash., can do. It is one of things that could move Kinect from a novelty to a necessary part of next-generation gaming and entertainment. It’s no longer a science project. Welcome to the age when your game console — and Microsoft — knows if you’ve been bad or good. It knows more about you than you know about you.

Games can use it to process physical feedback from you, increasing or decreasing the difficulty as needed. And you can use Kinect’s gesture and voice commands to control TV functions and navigate menus.

The new Kinect is a superbly upgraded version compared to the original Kinect launched in 2010. That system couldn’t detect a lot of things like your finger movements, and it was limited to viewing movements about 10 feet away or so. The new Kinect is accurate down to millimeter measurements, said Scott Evans (pictured at top), group product manager for Kinect.

The new Kinect has a 60 percent wider field of view so it can see most of a room. Kinect can now detect six skeletons, compared to two before. That means as many as six players can participate in a game at the same time. Phil Harrison, corporate vice president at Microsoft, said in an interview with GamesBeat that it is up to developers as to what they do with such technology.

The new system also has a color high-definition camera that can capture your image in a recording for Skype calls. The ultra-wide angle allowed it to pick up a bunch of people sitting in a faux living room that I visited in a lab on Microsoft’s campus on Tuesday.

“Xbox One demonstrations were impressive, particularly the improvements to Kinect for greater detail and higher sensitivity that have potential to add to the hardcore game experience,” said Billy Pidgeon, a longtime industry analyst.

And Kinect can see you in the dark because it has an infrared sensor that detects things alongside the primary camera. While Kinect previously relied on the system’s main processing chips, the new Kinect has its own dedicated silicon. Those custom chips (located in the Xbox One) handle audio processing for better voice recognition and image processing for visuals.

In the past, Kinect used “structured light,” or dots of light, to detect motion in a room. The new technology uses “time of flight,” or sending out light and detecting how long it takes for it to bounce back to the source.

Now Kinect has enough fidelity to correctly model your skeleton, capturing details such as whether your limbs are rotated. It can see how many fingers you are holding up and whether you are smiling or not. I stood in front of it and could clearly see from the image map that Kinect could see that my thumb was pointing up. You can see the shrug of the shoulders and other subtle movements that can be interpreted into responses to game situations.

The physics of your body is also recorded. Kinect sees which muscles you are using and how much pressure you are putting on them. If you jump, for instance, the muscle map of your body shows the parts that are stressed — your legs — in bright red, while the parts that aren’t show up in green. If you move your hand forward, Kinect can detect how much force you are using. If you punch forward at the camera, a big white circle shows up on the image map, indicating you are using a lot of force.

All of this data could overwhelm a lesser system. But Kinect is designed to capture several times more data in an area that is several times larger than before. It then sends that data to the Xbox One for game developers to interpret and use in their games.

The audio system still has four microphones with echo cancellation. The technology is directional. That means that it knows who is speaking in a room and it filters out other noises so that it can focus on what the speaker is saying. That makes it much better and faster at recognizing speech commands. If you are not looking at the screen, it will not register a command from you.

One of the coolest things is that it knows if you give the controller to somebody sitting next to you. Kinect will then record that person as the player, making a switch that would otherwise befuddle any other game system.

Six of us got in front of the camera and we were all moving about. The Kinect muscle maps showed accurately what every one of us was doing, with no delays in putting the imagery on the screen.

The heartbeat demo was the coolest feature, but it was just one measurement that Kinect could do that showed it could really understand what I, the gamer, wanted to do. Another demo showed how the force-feedback technology on the game controllers that you hold in your hand could also deliver the feeling of a heart beating. Between Kinect and the force-feedback controller, the possibilities for pulse-pounding, intense games seem very exciting.

Check out our video demos of the Kinect presentation below.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Once again, it’s time to get some all-in-one analysis with our second-hand panel of experts!

Surprise! Microsoft’s launching a new hardware console … who knew? And inside a giant circus tent full of magic and dreams, we got our first look at the best fee-charging-for-used-games, not-backwards-compatible, Internet-mandatory, groovy-retro-design game console ever made: the Xbox One!

It won’t be long before this hardware masterpiece matches up against Sony’s PlayStation 4, but why wait to make crucial judgments? A 60-minute event with no Q&A session is plenty of time! What say you, panel of experts? The Xbox One: bringer of world peace or red ring of death?

Launch the gallery below to learn the language of love!

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft’s next-generation console, Xbox One, won’t function if you don’t connect it to the Internet.

Following Microsoft’s big reveal event today, the company posted a series of answers to questions that many people were asking. The first issue the company addressed is the console’s Internet requirement.

“No, [Xbox One] does not have to be always connected, but Xbox One does require a connection to the Internet,” reads the FAQ. “We’re designing Xbox One to be your all-in-one entertainment system that is connected to the cloud and always ready. We are also designing it so you can play games and watch Blu-ray movies and live TV if you lose your connection.”

The wording of that answer is broad but telling. Xbox One can lose its online connection, but it requires one to function. They are “designing” it so you can still play your games if you lose your connection — something that the Xbox 360 is already capable of.

The FAQ goes on to say that the Internet requirement enables Xbox One to access the cloud to make games better.

“The cloud makes every experience better and more accessible,” the FAQ continues. “Because Xbox One is powered by the cloud, your games have more power available to create new gameplay, persistent worlds, and deeper experiences. Your games and entertainment are stored and saved in the cloud, so you can access them anytime from any Xbox One. Start a game, movie, or TV show on one console and finish exactly where you left off on another.”

We’ve repeatedly contacted Microsoft and asked its executives to clarify if this means Xbox One needs a connection to start single-player games.

“We cannot go into these specifics as we haven’t made any announcements about that yet,” a Microsoft spokesperson told me.

Immediately following the Xbox One event, Spike TV’s Geoff Keighley asked Microsoft’s Xbox president Don Mattrick if the system requires an “always-on” connection for single-player games.

“No, you don’t always have to be connected,” Mattrick told Keighley. “But for a lot of things, like multiplayer gaming and for streaming content from the Internet, you’re going to need an Internet connection. That’s the world we live in.”

Keighley accepted this answer saying: “So gamers can calm down?”

“Gamers can calm down,” said Mattrick. “We got you covered.”

Only Mattrick was very careful in his wording. He emphasized “always” in his response, which suggests an Internet connection is necessary to run a single-player game, but the game will still work if that connection is lost temporarily.

Kotaku seemed to confirm that today when reporting that Microsoft corporate vice president Phil Harrison said that Xbox One requires players to connect once every 24 hours in order to function.

We asked Microsoft about that, and again, the company told us that its hasn’t announced any specifics, so we don’t know if that is true or what would happen after that 24-hour period.

And that’s the problem. Microsoft isn’t telling us anything. It thinks it can control the message about its exciting new box, but it’s left us worried and confused.

Finally, we asked Microsoft about the 30 percent of Xbox 360 owners who haven’t connected their devices to the Internet, according to a study by industry tracking firm IDC.

“The vast majority of our Xbox 360 owners have Internet in their homes, and we’ve built this platform to take advantage of the tremendous benefits of a connected device,” a spokesperson told us.

Or — in the words of a former Xbox employee — deal with it.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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This sponsored post is produced by Dealzon.

Update: Deal is dead unfortunately. Looks like one too many people tried to abuse the offer by implementing scrips to receive the free $10 credit – some people have over 10,000 codes scraped -_- The promotional page now says: “We’re no longer giving out a $10 store credit, but you can still sign up to be notified of Xbox One availability.”

Amid the storm of Xbox One coverage around the web today, Microsoft Store attempted to build up even more hype and demand for their next-gen console by offering an enticing freebie offer.

If you sign-up for preorder email notification on the Xbox One, you’ll receive a $10 Microsoft Store credit in return for your trouble.

This offer was so good, in fact, that the Microsoft Store servers got hit hard by bargain hunters on deal sites and deal forums from across the web. Things got even more out of hand when people found loopholes for the $10 credit, resulting in many $0 orders being cancelled.

Essentially, the $10 store-wide credit is only valid on items over $10 MSRP, but it turns out this didn’t exclude items on sale. Thus, anything originally over $10, on sale for under $10 was free and ripe for the picking. It didn’t take long for Microsoft to wise up and cancelled thousands of 800 Xbox Live points orders en mass.

Having said that, there are still some choice deals you can get with the $10 credit. Here are a few examples:

• Universal Cassette Adapter – $2 after credit (yep we’re serious)
• Kingston DataTraveler 16 GB Flash Drive – $3 after credit
• Xbox Live 1600 Points – $10 after credit
• Belkin 8-Outlet Surge Protectors – $10 after credit

The $10 credit offer is valid until June 9th, 2013 and the credit itself expires on the same date, so don’t bother holding onto the credit thinking you can get $10 off your actual Xbox One preorder. Why Microsoft didn’t allow that is beyond us, but the credit does work on numerous Xbox 360 titles, PC games, and gaming accessories.

FYI: Microsoft Store’s server is still being hammered quite a bit, so error messages are still being reported left and right when trying to order something. Definitely a YMMV situation.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft unveiled the Xbox One console today. It’s a next-gen multimedia hub that will play games, TV, and movies in one seamless experience. Xbox Live, the Xbox name, and your Gamertag will all transition to the new hardware, but you’re going to have to leave some things behind … like Super Meat Boy.

The company confirmed today that the Xbox One isn’t backward compatible with the 360. That means the Xbox 360 games you own won’t work on the new device, but it also means that those digital Xbox Live Arcade games you purchased won’t migrate to the next system.

@JeffGrubb Xbox One was built to play an entirely new generation of games, it is not backwards compatible. xbx.lv/XBOFAQ ^JD—
Xbox Support (@XboxSupport1) May 21, 2013

Those digital goods are forever stuck in the Xbox 360 ecosystem unless Microsoft and other publishers make an effort to port the old games to the new hardware. In fact, Microsoft is doing away with the separate Xbox Marketplace channels on Xbox One.

“As the Xbox Live ecosystem continues to grow, the wide assortment of digital games offered through Xbox Live Indie Games, Xbox Live Arcade, and On Demand channels have evolved to one convenient destination for downloading games [on Xbox One],” a Microsoft spokesperson told GamesBeat. “Gamers are better able to discover titles, enabling them to find the games that best fit their needs and play styles. Additionally, Xbox One keeps track of your preferences and helps you discover new games with a smart recommendation system. We will continue to maintain the separate Xbox Live game channels on Xbox 360.”

Xbox One uses a PC architecture that is very different from the 360. In order to add support for those games, Microsoft would have to include 360 hardware inside every Xbox One. That would increase the price on a unit that already includes a console, a controller, and a Kinect motion camera.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on Xbox One, check out our complete coverage.

GameStop president Tony Bartel says that with two new next-gen consoles this year, “the gamers win.” The gaming retail giant is preparing for the upcoming releases of two major consoles: the PlayStation 4 and the Xbox One, which Microsoft announced today, and the ramifications this could have on one of its major sources of revenue: used games.

In a phone interview with GamesBeat, Bartel spoke about the importance of the used games market and his concerns for next-gen consoles from Microsoft and Sony, both of which launch before the end of the year. We talked to Bartel to get a major retailer’s perspective on a new console announcement and what it means for the world’s largest seller of games.

The Xbox One may seem like an odd name for the new box. It’s Microsoft’s third console. We asked Bartel his perspective as a retailer on that branding. “[It's] definitely surprising after we heard the speculation. We are going to have to stop saying Xbox 720 and say Xbox One,” he said. “It’s simple. I think that’s what they were after. By the time that this thing comes around, it will be rolling off all of our tongues.”

Bartel would not go into specifics about used games, which will require a fee for play on separate Xbox accounts according to Wired. “They have not discussed that with us yet. What they are going to say, if they haven’t said it already, is that they are going to design it [Xbox One] to work with trade-in and resell games. [Even Microsoft isn't sure -- Ed.] We’re going to work very closely to make this a seamless transition from Xbox 360 to Xbox One,” said Bartel.

GameStop president Tony Bartel

Bartel used Electronic Arts as an example, “EA said, ‘Look, our Online Pass isn’t working.’” The publisher recently discontinued its Online Pass program, which had players pay an extra fee for full online features when they purchased games used. ”Any type of friction implemented into the system would make it more difficult [for consumers],” and Bartel says that retailers and console makers want as little friction as possible.

Pressed further on used games, Bartel says, “We can’t speculate. I’ll go with what we do know. The point is that the buy-sell-trade model is very positive. Over a billion dollars of trade credit is applied mostly toward new games [About 70 percent of trade-in credit goes into new games, according to Bartel].”

Microsoft and Sony won’t kill the used games market, but whose console will launch first? Microsoft or Sony? “That’s a good question,” said Bartel, saying that we know both will come before the end of the year, but “the gamer wins in this whole deal, and that’s what I’m excited about. I like that Microsoft says they have more games in development than they’ve ever had in their history.”

In preparation for upcoming launches, GameStop announced its “First to Know” list. The retailer already has gamers signing up. “First to Know” is a service GameStop offers to those who want to receive email and notifications about upcoming consoles, such as price announcements, release dates and other relevant information.

“We are going to have a good idea of which people are going to want these consoles,” said Bartel. The retailer keeps track of members of its “PowerUp Rewards” program, which GameStop customers sign up for to receive additional trade-in credit and bonuses for being frequent shoppers. That information helps GameStop learn what kind of purchases certain consumers are likely to make and which gamers to target with specific games or consoles.

When asked what the most important thing for a retailer to nail down during a console launch, Bartel said, “I think it’s two things. It comes down to understanding the console and affordability.

Bartel mentioned GameStop’s annual manager’s meeting in Las Vegas and said that there will be extensive training, as the company aims to have the most knowledgeable staff on-hand. ”We will have 40,000 trained associates working this holiday season understanding the differences between the two consoles.”

Price is always a concern, something Sony experienced firsthand when it slotted its PlayStation 3 at launch for $599. “[The] second is affordability. We’re working very closely with both platform holders [Sony and Microsoft] as well as publishers to drive the buy, sell, trade model to ensure that we will be the most affordable retailer.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft wants to make sure you always have a friend online. The company announced through its official Xbox Support Twitter account that it will allow for up to 1,000 friends on Xbox Live.

Polygon spotted the confirmation from Xbox Support, shown below:

@clear_then_die 1000 friends is indeed confirmed ^JG—
Xbox Support (1-5) (@XboxSupport) May 21, 2013

Xbox Live currently restricts your friends list to 100. That’s a limit that many gamers have already met, meaning they have to turn down new friend requests. With the new 1,000 limit, it’s going to take much longer to fill that list. But we’re sure someone out there will manage to do it.

For more, check our Xbox One hub page or our roundup of all available Xbox One information.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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This morning, Microsoft presented Xbox One to the world. It’s an all-in-one entertainment device that plays games, television, and more.

As part of today’s event, we have a ton of new trailers, including a first look at the system and next-gen Xbox games. Below you’ll find the first look at the console, its features, and its specs. We also have the first look at next-gen games like Call of Duty: Ghosts, Forza Motorsport 5, and Madden NFL 25.

For more information about today’s announcements, check our Xbox One hub page or our roundup of all available Xbox One information.

Now, go ahead and gorge on the Xbox One’s visual delights:

Xbox One unveil

Xbox One features

Xbox One specs

Call of Duty: Ghosts

Forza Motorsport 5

EA Sports Ignite games

Quantum Break

Steven Spielberg — Halo: The Television Series

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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With the debut of the new Xbox One gaming system, we could focus on many things: hardware, flashy games, and entertainment options. But one aspect really gets me fired up: Developers should now be able to use Microsoft Azure’s cloud computing platform to make games more powerful than ever.

Wired reports that the game developers and studios can tap Azure for all kinds of things. Microsoft isn’t going to force developers to use the cloud platform, but it will certainly push them to do so.

The Xbox One will not have to be always connected to the Internet to play games, but it does generally require an online connection. And if developers do decide to tap Azure’s cloud computing platform to boost a game’s power, a web connection will be necessary to play that game.

Why Azure?

Microsoft has been building Azure’s cloud computing capabilities for a long while. Azure has been mostly known as a platform-as-a-service that (primarily .NET) developers use to make the process of app development easier.

Microsoft opened up Azure for pure cloud infrastructure use in June. It now competes with top dogs like Amazon Web Services, Rackspace, and Google Compute Engine.

Steven Martin, the general manager of Azure’s operations team, told us this past October that Azure users are consuming more compute capacity than the entire world used in 1998. As of December, Azure’s cloud storage holds more than 4 trillion objects. It also handles an average of 270,000 requests processed per second, with a peak of 880,000 requests per second.

Azure applications in gaming

Now, let’s see what you could do with all that power.

The first and most obvious application of Azure on Xbox One is making Xbox Live more powerful and useful. All your downloaded games and achievements would be synced and available wherever you are. You would also have dedicated servers for every multiplayer game you participate in. Multiplayer matches would be able to host up to 128 gamers in a single session.

Xbox Live currently runs on 15,000 servers, but it will soon move to a stunning 300,000 servers later this year for the Xbox One launch. That’s a lot of power dedicated to making Xbox Live better.

Second (and this is a bit more crazy), developers can offload computational tasks to the cloud instead of relying on physical hardware to do the heavy lifting. Necessary game computations for physics, rendering, and the like could be immensely enhanced with a connection to powerful virtual servers in the cloud.

“It’s not like on day one, everyone will have figured out how to take advantage of that power,” Microsoft interactive entertainment CMO Marc Whitten told Wired. “It’s just one of those stakes we’re placing.”

Screenshot via Microsoft

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Updated at 4:24 p.m. Pacific with Major Nelson’s comment.

Microsoft is contradicting itself about how used games will work on the newly announced Xbox One console. A company executive is saying one thing and the official Xbox Support account on Twitter is claiming the exact opposite. Things are messy right now.

We asked Microsoft directly what it plans for used games on Xbox One. A company spokesperson parroted an answer that is currently available on the Xbox One frequently asked questions page on Xbox.com.

“We are designing the Xbox One to enable customers to trade in and resell games,” a Microsoft spokesperson told GamesBeat. “We’ll have more details to share later.”

Following the Xbox One presentation, tech website Wired posted a story in which a Microsoft representative claims gamers have to pay a fee to activate used games on a second account.

Now, the Xbox Support account on Twitter is telling gamers that “there is no fee to install” games.

@PaulMitchell80 Great question! Again, there is no fee to install the game. Your friend will not pay a fee. ^BA—
Xbox Support (1-5) (@XboxSupport) May 21, 2013

The support team specifically cited an example where a friend borrows a hard copy of a game. That friend will not have to pay a fee, according to Microsoft.

A fee of some sort is still in the cards, according to Microsoft corporate vice president Phil Harrison.

“You can purchase a game in two ways,” Harrison told Eurogamer. “You can purchase it from a retail store or you can download it. So the act of putting the bits on the hard drive — the Xbox One doesn’t really know or care what method the bits got into the machine. If it was from a disc or downloaded from Xbox Live, but obviously the users will then have to purchase that content.”

This suggests that every user will have to purchase a license to play any game, which is then installed on the Xbox One’s hard drive.

“What I think people are now confusing is the purchasing of content in the first instance with the ability to trade and resell the previously played games,” said Harrison. “We have a solution for that and we will be announcing exactly how that works in due course.”

The aforementioned Xbox Support account on Twitter said that Harrison is wrong in his characterization of the “fee.”

@Daramanz That information is not accurate at this time. Sorry for any confusion. ^BA—
Xbox Support (1-5) (@XboxSupport) May 21, 2013

If you’re confused now, don’t feel bad — we all are.

Microsoft spokesperson Major Nelson later tried to clarify the situation on his blog:

We know there is some confusion around used games on Xbox One, and [we] wanted to provide a bit of clarification on exactly what we’ve confirmed today. While there have been many potential scenarios discussed, today we have only confirmed that we designed Xbox One to enable our customers to trade in and resell games at retail.

Beyond that, we have not confirmed any specific scenarios.

Another piece of clarification around playing games at a friend’s house — should you choose to play your game at your friend’s house, there is no fee to play that game while you are signed in to your profile.

Major Nelson is apparently walking back just about everything Harrison and Xbox Support said today. He wouldn’t confirm that you could avoid paying a few if you borrow a game from a friend.

The issue here is that the license for each game is seemingly tied to a single Xbox Live account. How that license will transfer beyond that is still up in the air, and it’s something that Microsoft needs to reveal in detail.

Electronic Arts recently ended its Online Pass program, which charged gamers $10 to activate certain features in used games. It’s possible that move relates to whatever designs Microsoft has in store for the second-hand market.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The mad scientists at Microsoft have finished building their next-gen creation and finally unveiled it to the world today. It’s a multimedia powerhouse that is ready to go head-to-head with Sony’s PlayStation 4. The Internet is buzzing with a confusing mess of details, so we decided to gather together everything we know about the Xbox One and post it below.

We cover everything in this post, but you can get expanded coverage on everything from our Xbox One hub page here.

The basics

The Xbox One is Microsoft’s all-in-one living-room device. In fact, Microsoft confirmed it called the new system “Xbox One” because it is supposed to be the one device people will need for their entertainment. That means video games are just one small piece of its capabilities.

Basic info:

• Price: Microsoft didn’t specify
• Release: “Later this year”
• No backward compatibility
• Requires Kinect
• Single-player games don’t require an always-online connection
• Used games will work but may require a fee
• Xbox Live is back
• Gamertags will transfer
• Friend-list limit raised to 1,000

Questions we still have:

• What happens to Xbox Live Arcade purchases?
• Do used games work?
• Is there a fee for used games?
• How much is that fee, and what does it get us?

We’re working to answer all of these questions, and we’ll post the answers here as we find them.

Technical capabilities

Microsoft’s Xbox uses an accelerated processing unit, or APU, from AMD that combines the CPU and GPU on a single chip for increased performance. This is nearly identical to what the PS4 is running.

Xbox technical specifications:

• 64-bit architecture
• 8GB of RAM
• USB 3.0
• 5 billion transistors
• Blu-ray disc drive
• 500 GB hard drive
• HDMI Out/In
• Ethernet and Wi-Fi

You can read our detailed breakdown of Xbox One’s capabilities in our story that goes under the hood here.

The controller

Over the last seven years, the Xbox 360 controller slowly became an industry standard for console shooters. That standard will continue with some minor tweaks and improvements.

Here are list of features for the new controller:

• Fundamentally the same as the Xbox 360 controller
• Deep groves on thumb sticks
• Impulse triggers
• Wi-Fi radio
• “Precision” direction pad
• Integrated battery compartment

This is a natural evolution of the last controller. It’s not as packed with features as Nintendo or Sony’s gamepads (both of those have touch inputs), but it should please anyone who is used to Microsoft’s design.

The new Kinect

Along with the Xbox One, Microsoft is also introducing a next-generation Kinect motion sensor. The new console will require this new device to operate. That means this 3D camera and microphone is almost certainly included with every console.

The new Kinect’s features:

• 1080p camera
• Wide-view lens
• Skype support
• Can sense rotation of wrist and shoulder
• Detects weight distribution
• Capability to read heart-beat rate

Kinect is also a central part of Microsoft’s media experience. Xbox One owners can command the Xbox to switch from games to a movie instantly with their voice. Hand gestures will also enable people to pinch and zoom multiple apps that are all running simultaneously on the Xbox One.

Xbox Live

Xbox Live will continue on Xbox One. Microsoft confirmed that your Xbox Live accounts will transfer to the new system. If you have Xbox Gold on Xbox 360, then you already have the service on Xbox One as well.

Likewise, player achievements and gamerscore will transfer to the new system.

The company also confirmed on Twitter that it is upping the friend limit from a measly 100 to 1,000.

The multimedia features

Microsoft spent much of its presentation focusing on how the Xbox One integrates with television and movies. The company obviously wants to own entertainment delivery in the living room.

With the Xbox One, TV viewers can use their voice to turn their systems on. From there, they can change the channel by saying “Watch SyFy,” and the Xbox One will tune to SyFy. It does this by connecting a cable or satellite box into the One through HDMI In.

These features also integrates with unique viewing experiences from the NFL and a new Halo television series exclusive to Xbox Live.

The Games: Call of Duty: Ghosts

Microsoft didn’t reveal a ton of new games. This event definitely positioned the Xbox One as something more than a gaming console. Despite that, we did get a look at a few new games.

Here are the confirmed titles for Xbox One:

• Call of Duty: Ghosts
• Forza Motorsport 5
• NBA Live 14
• Madden NFL 25
• FIFA 14
• EA Sports UFC
• Quantum Break
• Destiny

Microsoft and other publishers will show more games at the Electronic Entertainment Expo in June. Except announcements from Ubisoft and more.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on the Xbox One reveal, check out our complete coverage.

Microsoft’s team of super-hardware geeks talked about what is inside the new Xbox One console.

Gamers may not care about the hardware so long as it runs games smoothly and doesn’t get in their way. But the Xbox One is an engineering marvel that combines both cloud processing and a heavily engineered game console to produce game effects that Microsoft promises will be truly impressive.

If you look at all of the tasks that the machine does, it’s clear there isn’t enough silicon in the box, said Nick Baker, a distinguished engineer of console architecture and one of the head silicon engineers at Microsoft. He was a key architect on the Xbox 360 chips as well as the Xbox One chips. But the cool thing about the box — which has chips with 5 billion transistors in them — is that it can tap supercomputers in web-connected data centers to do processing.

That means the hardware inside the box isn’t fixed. Over time, the hardware can get better as Microsoft upgrades the technology in the data centers. For now, Microsoft has more than 300,000 servers in its data centers to support Xbox One and the Xbox Live online entertainment service. The Microsoft supergeeks spoke on a panel at the Xbox Reveal in a session moderated by Xbox Live evangelist Larry “Major Nelson” Hryb.

That processing power enables things like instantaneous Kinect, where voice commands immediately activate tasks on the Xbox, from waking up the machine instantly to changing the channel on your TV. That kind of processing exists alongside other things going on at the same time. You can, for instance, watch TV and then receive a Skype call without turning off the TV show. To do this type of thing, Microsoft had to design the box in a way that it could access memory and caches of data much faster than in past game consoles.

“There are a growing number of transistors in the cloud that you can move the loads onto,” said Boyd Multerer, the partner director of development and ISS Console Development Management (one of the software experts at Microsoft). “I think it’s an inflection point. So over time, your box gets more powerful. We move loads into the cloud to free up resources on the box.”

Todd Holmdahl, the corporate vice president of IEB hardware and another longtime Microsoft hardware executive, said the load can shift from one device to another. The cloud can tackle tasks in games like physics, artificial intelligence, and even some rendering. The tasks that require low latency, with split second interaction between one chip or one device and another, are those that the box — not the cloud — still needs to handle.

“This is a radically different way of thinking about a game console,” he said.

After the talk, Multerer told me that some tasks don’t need to run all the time. Artificial intelligence, for instance, doesn’t need to be calculated for every single frame of the game. Your enemy in a game will close in on you, but it only needs to know where you are every second, rather than every split second. So that task can be offloaded to the slower connection to the servers.

But anything that happens on the screen in an instant — if you pull the trigger on a gun and you see a muzzle flash on the screen — has to be calculated inside the box, Multerer said. Some rendering, like trees in the distance in a scene, can also be offloaded, so long as the software properly divides up the tasks, he said. That kind of thinking is very different for a game machine, but Multerer thinks many consumer products will be designed like this in the future.

The machine has things like Gigabit Ethernet so that it can be ready for improvements in Internet speeds. It has multiple power states so it can reduce power consumption when necessary. The box has a couple of 802.11n radios to connect to the Internet wirelessly and with other devices in the room.

“You can use just enough power for the experience you are in and nothing more,” he said. “The best example of that is wake-on voice, where you say ‘Xbox On’ and it powers up immediately.”

Holmdahl said that Microsoft redesigned the Kinect system. The sensors are now smart enough to detect your facial expressions, which provides for smarter games that know how you are feeling as you play the game. Kinect has a variety of sensors it can rely on, like time-of-flight depth cameras and infrared, which is good at detecting low-light movements.

“You get better identification, better field of view, better audio, better recognition,” he said.

Baker said that the internal Microsoft chip team had to design five pieces of silicon to handle all of the tasks in the console and the Kinect subsystem, which now comes bundled with the box. The team had to test the chips thoroughly, running 10 trillion cycles of simulation in order to make sure everything worked right. The chips had to be designed to work with each other in a coherent way.

The GPU is multitasking so that it can run compute and cloud tasks at the same time that it renders graphics, Baker said. The net result is that it can do billions of calculations per second.

Holmdahl said, “We started with a blank slate. We talked to the hardware, software people. One of the good things about Microsoft is you have those people under the same roof.”

Holmdahl said developers will be able to exploit these technologies as they learn more about things like instantaneous voice command integration into the game console.

The work started a few years ago.

“The development of these things takes a while,” Holmdahl said. “You develop some things that don’t work. We have converged on something that people will love.”

Multerer said the machine has 8GBs of RAM because it needed to have fast-switching between apps and support two things running at the same time, such as the Kinect entertainment controls and the games.

The new generation of graphics chips is based on supercomputing technologies and having the right data flow, with the focus on having the data in the right places at the right time. So there had to be caches of memory on the die, on the CPU, to feed that data to the processor, Multerer said.

Baker said that things like Hyper V, virtualization, and 64-bit processors really started in a data center. Getting them into a living room device wasn’t easy.

“This is really a first,” Baker said.

“And it’s hard to do,” Multerer said. “David Cutler came under our team a year and a half ago and he worked on the operating system himself.”

The machine’s software takes lessons from the services world. The team started with virtual machine technology and it stripped out general-purpose functions out. It boiled it down to the bare minimum so that the virtual machine — a middle software layer — can run extremely fast and won’t slow down games. This kind of software can be partitioned into different parts so it can handle different tasks simultaneously. One of the machine’s operating systems boots up and is “created” when the machine turns on, Multerer said. Then it stays operating while the machine is on, and then disappears when the machine is turned off.

“When you can do two things at one time, it solves a lot of problems,” like figuring out when your friends are online and they are trying to get in touch with you, Multerer said.

There’s a third operating system as well that handles other kinds of services, such as the TV services. Switching between these operating systems quickly gives the system its instantaneous feel, Multerer said.

With Xbox Live, the number of servers supporting the system in the cloud is huge. Those servers can be swapped out. When the hardware becomes more powerful over time, developers can build bigger game worlds and put more action on the screen at once, Multerer said.

Dan Greenawalt, one of the game development experts at Microsoft and creative director at Turn 10 Studios (the folks behind the Forza Motorsport auto-racing franchise), said that Microsoft brought together teams from Microsoft Research and other teams.

“This is the next giant leap forward,” he said.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Updated on May 22 at 4:34 p.m. PST to include Ryse.

For more on the Xbox One reveal, check out our complete coverage.

Ubisoft, Square Enix, and other companies have confirmed a host of new games for Microsoft’s upcoming all-in-one games-and-entertainment console, the Xbox One. Microsoft said today that it would be releasing 15 exclusive titles, eight of which are new properties, in the first year of launch.

Ubisoft in particular is planning a good many titles. It’s promising “at least” six releases in the system’s first 12 months. Action-adventure games Assassin’s Creed IV: Black Flag and Watch Dogs are due out later this year, which is when Xbox One is set to debut. Both are multiplatform titles. The rest are a mix of new entries in existing series, new intellectual properties, and digital titles, according to a press release.

Square Enix and Eidos Montreal have confirmed the reboot of the stealth game Thief for Xbox One as well as PlayStation 4 and PC in 2014.

Alan Wake and Max Payne developer Remedy Entertainment is making a game called Quantum Break [above] exclusively for Xbox One. Activision announced the new multiplatform Call of Duty: Ghosts, which features storytelling from Stephen Gaghan, who wrote the screenplays for the award-winning films Traffic and Syriana. You can watch the new trailers and videos from the Xbox Reveal show below.

Another exclusive Xbox One title is Crytek’s Ryse, which features “controller-based gameplay enhanced by Kinect.”

Forza Motorsport 5 is also in the works from publisher Microsoft Game Studios. The racing series has long been exclusive to Xbox. In addition, EA Sports is releasing four titles: FIFA 14, Madden NFL 25, NBA Live 14, and EA Sports UFC, all of which use the new game engine Ignite. It “enhances the human intelligence of athletes” through their movements, which boast even more depth in animation. Take a look at the engine in action below.

EA’s games will release on Xbox One within the first 12 months of the console’s launch. Madden NFL 25 will also be available on the PlayStation 3 and Xbox 360 on Aug. 27. FIFA 14 is coming to these platforms and more, including PC, at an undisclosed date. All four games are also making their way to the PS4.

Electronic Arts and DICE’s Battlefield 4 is scheduled for release on Oct. 29 on PC, Xbox 360, and PlayStation 3 and is arriving later on Xbox One and PlayStation 4. And Bungie’s upcoming new property, the action-role-playing first-person shooter Destiny, is also coming to the Xbox One in addition to PS4, Xbox 360, and PS3.

Some of these are hitting Xbox One first though Microsoft has not set official release dates for them or the console. We’ll update this post with more games as the news rolls in.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on the Xbox One reveal, check out our complete coverage.

Microsoft revealed its next-gen Xbox One today, and we are discovering new details about the powerful device.

After the event, Microsoft corporate vice president of Xbox Live Marc Whitten told The Verge that the Xbox One will not work with Xbox 360 games. It will support 450 original Xbox games through emulation.

We’ve contacted Microsoft to ask if it plans to sell Xbox 360 games through a digital store and what will happen to digital purchases including Xbox Live Arcade games. The company has not yet responded to our request, but we will update with any new information.

Sony’s PlayStation 4 has almost the identical problem. Like the Xbox One, it is using a new architecture compared to its predecessor that prevents PlayStation 3 games, including PlayStation Network titles, from working on the next-gen console.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For more on the Xbox One reveal, check out our complete coverage.

Microsoft has revealed its new console, the Xbox One, and it’s promising plenty of power.

The heart of the new all-in-one entertainment system is raw power, corporate vice president for Xbox Live Marc Whitten today claimed during a live event. The console runs on native 64-bit architecture and has 5 billion transistors and 8GBs of system RAM. Its predecessor, the Xbox 360, has only 500 million transistors and 512MBs of RAM.

The console reportedly has three operating systems in one. The first is the Xbox O/S, which Whitten claims gives game developers deep and instant access to the hardware. The second is a kernel of Windows. This gives Xbox One owners consistent access to web-powered applications in a way that Whitten says is flexible, powerful, and simple. The third O/S connects the first two, creating multitasking and the near-instantaneous switching between applications.

“Only Microsoft and Xbox could bring this level of power, performance, and sophistication to the living room. There’s no waiting. You can switch to your game like it’s a TV channel flip,” Whitten claims.

Xbox One also features USB 3.0, a Blu-ray DVD player, and Wi-Fi Direct, a standard that requires less setup by enabling devices to communicate with each other without a wireless access point. Whitten says the console runs quietly as well.

Microsoft seems to be doubling down on its Kinect motion control sensor. One comes with every new Xbox, Whitten says, and it’s completely redesigned to respond instantly to your voice and gestures. Voice commands are now more conversational. A simple “Xbox On” turns on the console, and commands like “Go to Music” and “Watch TV” let you switch quickly between multiple programs.

Whitten says the company’s new proprietary Time of Flight — a standard used to measure the time it takes for an object to travel a distance through a medium — is “rocket-science-level stuff.” “[It] measures the time, about 30 billionths of a second, that it takes individual photons to bounce off of you to create unprecedented accuracy and precision. Over 2 gigabits per second to understand your world.” The Kinect sensor itself is now 1080p and provides a wider scanning area. It understands the slightest rotation of a wrist or shoulder, Whitten claims, and tracks your balance as well. It even reads your heartbeat while you exercise.

“This is a modern, powerful box engineered to deliver now and well into the future,” Whitten says.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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With Microsoft’s introduction of the new entertainment watching experience through its new Xbox One console, one of the biggest winners will obviously be for those that love live sports.

The company announced a new partnership with the NFL that will see America’s most popular pro sports league bring original content to the Xbox. There was plenty of talk about being able to integrate sports scores, play-by-play views, socialization, and more into the TV screen as well as making fantasy football leagues more centralized to your experience. Specifically, we don’t know which games or sports shows will get the new Xbox One treatment, but I assume Microsoft and the NFL will reveal more in the weeks to come.

I got the sense that the NFL programming will seek to use all the available devices in interesting ways that either don’t overlap or take away from the central experience of the content.

The NFL programming isn’t the only nongame content that Microsoft revealed during today’s Xbox One event. The first was a new interactive Halo TV show produced by the legendary Steven Spielberg, who created roughly half the childhood favorite films for anyone born during the ’80s.

For more on the Xbox One reveal, check out our complete coverage.

Remedy Entertainment’s love affair with live-action footage blended into games (think Alan Wake and Max Payne) continues with its upcoming Xbox One exclusive Quantum Break. In the Xbox One’s first year, Microsoft plans to release 15 exclusive titles, eight of which are new properties. And Quantum Break is leading the charge.

Actions players take during the game portion of Quantum Break will ultimately affect the events in the lives of the live-action characters. Hopefully, more details on how interconnected the two are will come out soon. For now, check out the trailer and gallery below.

For more on the Xbox One reveal, check out our complete coverage.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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343 Industries general manager Bonnie Ross has just announced a new live-action television series based in the Halo universe, and Steven Spielberg is on board as a creative partner.

“The Halo universe is an amazing opportunity to be at that intersection where technology and myth-making meet to produce something ground-breaking,” said Spielberg in a prerecorded message.

As yet, no further information exists on whether Halo: The Television Series will involve the Master Chief, when in the continuity it’ll take place, when it will premiere, or even how many episodes have been ordered. But it’s likely to be similar in design to the Forward Unto Dawn web series and, given its origins, exclusive to the new Xbox One console.

For more on the Xbox One reveal, check out our complete coverage.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Activision Blizzard unveiled its not-so-secret, long-awaited (at least since November) installment in the fastest-selling video game franchise of all time. Call of Duty: Ghosts will debut this fall on a variety of platforms including Microsoft’s next-generation game console.

Eric Hirshberg, president and CEO of Activision Publishing, describes the game as the “best Call of Duty ever.” He also said that about the last one, and it is genuinely touching to see how he means it. But you can’t make fun of him. So far, he hasn’t been wrong.

The market for these games has lived up to the hype, as the titles typically generate more than $1 billion within a few weeks after launch, every single year. Such sales have made Call of Duty one of the five most valuable game franchises in the industry. And today, the company has taken the wraps off the latest entry in the series at the event where Microsoft unveiled its next-generation Xbox game console. While the game bears a familiar name, Call of Duty: Ghosts is a brand new game world with new characters, new game play mechanics on new consoles, a new game engine, and a new story.

About 40 million gamers are awaiting this title, which is not just a single game but a whole new sub-brand, much like Call of Duty: Modern Warfare and Call of Duty: Blacks Ops. Like those sub-brands, Call of Duty: Ghosts is expected to spawn multiple titles in a new modern combat universe.

As you might expect, Call of Duty: Ghosts represents another huge investment of time and money in a modern combat game. Developed by Infinity Ward, the title suggests that the game is about ghost-like elite soldiers who perform secret and controversial missions, always operating in stealth. The game scenes showed the signature Call of Duty style: intense action, a gripping narrative, pulse-pounding music, and stellar graphics. The company showed a canned demo of the game running on the next-generation Xbox, and the graphics looked superb.

Activision didn’t show hands-on gameplay to journalists at its event last week, but it said that the animations on screen were running real-time, in the game engine itself as it operated on next-generation consoles.

One of the highlights of the demo showed the Ghosts in scuba gear, diving under the sea to escape detection. They swam through a beautiful undersea environment with cool lighting effects, wave distortions, and many things moving at the same time. Only the most powerful game machines are capable of running such scenes, and clearly Microsoft has one of them. The action got particularly hot when a firefight broke out under water between divers who had guns that worked underwater (that seems to defy the laws of physics). The visuals were indeed so good that there is no way a current-generation Xbox 360 or PlayStation 3 could run them.

At an event last week, Hirshberg said, “From time to time, I have read stories about how long Call of Duty can last. They are about whether this franchise is ever going to crest. And I know that it seems that it should be. There is just one problem. It’s not. By every measurement you care to look at, Call of Duty has never been stronger. It’s not only thriving. It’s still growing. Sales of the game, sales of downloadable content, the number of people who play every month, the number of daily users, the number of hours played, the engagement with social media, the video views — just about any measurement you care to look at, this is still a franchise that is on the rise. After all this time, that’s pretty remarkable.”

He added, “Keeping Call of Duty relevant, growing, thriving, and still surprising people — this long into its history — is not easy. In fact, it may be the hardest creative assignment of them all. With a franchise like Call of Duty, we have the dual responsibility to our fans to continue to make and refine the game that everyone fell in love with in the first place, and still find ways to continually come up with new, meaningful innovations each and every time. You can count on one hand the pop cultural franchises that have had this kind of staying power.”

Hirshberg said Activision could have played it safe by creating yet another sequel, Call of Duty: Modern Warfare 4. (There are 122 million search results on Google for Call of Duty: Modern Warfare 4).

“We chose to push this thing forward and use the opportunity of the next-generation consoles to user in the next generation of Call of Duty,” Hirshberg said.

A preview of the brand new story

Mark Rubin, executive producer of the game at Infinity Ward, said at the event last week that the ambition for the game is to make it run at a smooth 60 frames per second (Movies typically run at 24 frames per second) and still wow gamers with its complex visual animations.

“We’re really excited that we get to be the studio that brings Call of Duty into the next generation,” Rubin said. “This is powered by an amazing next-gen engine that gives us amazing graphics fidelity.”

Infinity Ward hired Stephen Gaghan, the screenwriter for the Oscar-winning Traffic film, to create more fleshed out, emotion-driven characters. Gaghan directed Syriana and he’s a gamer. The bet is that Gaghan’s fleshed-out characters will make full use of the enhanced graphics technology in the new game consoles for rendering human faces.

“What they really wanted in this game, Call of Duty: Ghosts, was emotional reality,” Gaghan said.

The story opens with a catastrophic event that cripples America’s military power and virtually wipes out the southern half of the country. The U.S. is no longer a superpower. The story follows two brothers as they meet up with the resistance.

“As the player, you are actually the underdog, fighting back against these superior forces,” Rubin said. “The team you are part of is formed from the remnants of the U.S. Special Forces. They’ve adopted every technique for modern, guerrilla-style missions.”

In the underwater scene, nothing really looked fake. Bubbles floated upward through the water. Shadows were cast by objects on the surface down into the water below. The music suggests the intensity as the Ghosts try to escape detection via sonar pings. Once the soldiers make contact, they fire at each other using underwater guns. Then the Ghosts fire a handheld torpedo at a giant submarine passing overhead.

Daniel Suarez, vice president of production at Activision Publishing, said that one unique feature of the game will be its reliance on squad combat, with smart artificial intelligence characters carrying their weight in different roles on the battlefield.

A soldier and his dog

Among the new smart AI characters in the game is a dog. That’s right.

“This is someone you care about,” said Rubin. “This is a squad member. You fight for him and he fights for you. He does everything from sniffing out explosive to protecting the team.”

The dog animations were created from scans of a real Navy Seal Team combat dog. The team took advantage of next-gen hardware to create characters with detailed faces and the fur on the dog, said Jake Rowell, lead artist at Infinity Ward.

“The closer you get to it, the more it maintains the curvature” of details such as faces, Rowell said.

Faces will look more lifelike, thanks to the horsepower of the next-generation consoles. Helmets look round, with no jagged edges, even when you see them up close. You’ll see better-looking smoke, fluid dynamics, and interactive dynamics. The non-player beings are smarter. Fish move out of the way when you get close to them.

“It should feel like you are really there,” Rowell said.

Players will be able to customize their characters more than ever, choosing faces, heads, body types and more. The notion is to make players connect with who they are as characters. The new consoles have a technique, Sub D (developed by Pixar for animated movies), that pushes up the number of polygons (the basic building blocks of 3D images) in real-time. High-resolution textures enable much better details. When a beam of light hits a character’s skin, the mathematical models behind the animation cause the light to bounce around under the surface and produce a faint glow to the texture of the skin. On the fly, the engine decides how many polygons should be included in a given animated image so that it looks better. That makes images more realistic.

The character’s arms, one of the few body parts you see a lot in a first-person shooter game, will be far more realistic than in past games with an “exponentially higher polygon count.” The arm animations will show cuts, bruises, and even the dirt underneath fingernails. The weapons will also look a lot more detailed. Jungles in Ghosts will be far more detailed and populated with plants than in Call of Duty: Modern Warfare 3, which came out in 2011.

The multiplayer combat will also be more dynamic. There are events such as earthquakes and floods that will affect the battlefield. There are player-driven actions such as doors with explosives and other player-created traps. And the developers promise that those changes won’t slow down the game. Suarez said that the multiplayer animation quality has typically lagged behind single-player versions in first-person shooters. But Activision is aiming to reproduce the same graphics fidelity in multiplayer as it does in single-player mode.

“Gameplay drives tech,” Rubin said. “All of this was built to enhance gameplay for the player.”

He also showed how a technique called Displacement Mapping enables much higher fidelity for the animation of water rushing over rocks in a river bed. Without the Displacement Mapping, the rocks look flat. But with the Displacement Mapping turned on, the scenes looks fully three-dimensional. The engine adds those effects on the fly.

What this means for Activision

The game arrives Nov. 5 on a variety of platforms. For Activision, the new game is emblematic of its strategy of focusing on a few titles and doing them exceptionally well. With games like Skylanders, Call of Duty, and the upcoming Destiny game from Bungie, Activision can truly say that it puts its “capital into make those things awesome,” Hirshberg said.

The company is investing heavily in marketing as well, since it knows it will face brand-new game franchises appearing for the first time on the new game systems. If the company pulls off its marketing and game design just right, it could keep the Call of Duty juggernaut going. And if it doesn’t, there’s going to be a pretty big crater in the ground.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Xbox’s popular auto-racing series, Forza, will get a new installment on Microsoft’s newest system, the Xbox One. Microsoft Game Studios chief Phil Spencer announced during today’s reveal event that Forza 5 will launch with the new system.

Check out the trailer and first screens from the announcement trailer below.

For more on the Xbox One reveal, check out our complete coverage or our liveblog and livestream.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft announced the Xbox One and the first games it confirmed for the new system were four titles from EA Sports.

Electronic Arts sports division revealed FIFA 14, Madden NFL 25, NBA Live 14, and UFC are all in the works for the Xbox One. The publisher is using a new graphics engine, called Ignite, that EA claims will bring in a new sense of realism.

“Today marks the beginning of a broad strategic partnership between EA and Microsoft,” EA Sports executive vice president Andrew Wilson said. “We share a common vision with Microsoft that games should be intelligent, dynamic, connected, rich with emotion, and — most importantly — fun.”

Wilson went on to promise that all four games will fundamentally change the way people play.

“Ignite was designed specifically to blur the line between real and virtual, ” he said. “Sports are just as much about your head as they are about your feet or hands. We built new technology that allows players to make decisions with four times more calculations per second.”

The increased graphics power of the Xbox One helps EA Sports show more of the playing field at any one time. This should give players more context during the game or match.

EA went on to show a sizzler reel of its four announced games. It didn’t have much gameplay, but the animation is smooth. We’ve included a gallery below:

For more, check out of complete coverage of the Xbox One reveal and our livestream and liveblog.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Xbox Live is going to the cloud.

At today’s Xbox Reveal event, corporate vice president of Xbox Live Marc Whitten announced that the new Xbox Live service for the upcoming Xbox One console provide access to movies, games, and save files from “anywhere.” He also said that the system will feature a “dedicated DVR” to capture your gameplay and upload that to the cloud as well. However, these were not shown in action, as Whitten only spent a few minutes discussing the online service before moving on to the next part of Microsoft’s presentation.

For more, check out of complete coverage of the Xbox One reveal and our livestream and liveblog.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Microsoft just blew the doors off of every integrated television experience with the reveal of its next generation Xbox One video game console.

The new Xbox will bring improved voice and gesture controls to watching TV. It also brings in live TV from the Xbox One (something you could do a bit clunkily on the Xbox 360 with Verizon FiOS and Xfinity TV from Comcast), Skype Internet calling, a new Trending feature that shows what’s popular among all Xbox Live community members and multitasking while watching programs.

Seriously, if the demonstration is any indication for how it’ll actually work, you’ll never watch TV the same way again.

Microsoft entertainment VP Yusuf Mehdi showed off how you’ll be able to turn on all the devices in your living room by speaking “Xbox On,” which pulls up your Xbox Live profile without the need to click through several sign-in screens or software updates. Apparently, the console will recognize your voice to do this, and it could possibly even distinguish between others that might use the console.

From there, Mehdi proceeded to change the channel by speaking. For example, you change from watching ESPN to Syfy by simply saying “Watch Syfy.” That’s right — no more “flipping” through the channels when you know exactly where you want to go. Mehdi didn’t make this clear, but I think this means those with a cable subscription (to Comcast at least, which was what they used in the demo) will no longer need to rent one of those crappy cable boxes that was probably made a decade ago.

As for the gesture controls, they seem to be utilized when switching between functions, like Live TV or another app. And speaking of other apps, the new controls make me think that multitasking on a television screen isn’t just an unnecessary pain in the ass. The demo showed off the ability to pull up sports stats during live games, chat rooms with friends, and pulling in a Skype voice call while you’re watching something.

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