PlayStation 4, Xbox 720 – Names Subject to Change

At last month’s E3 rumors began circulating about a possible new Microsoft console. A source at Crytek (makers of the game Crysis) says they’re already working on a new version of Timesplitters for the next generation of consoles. The same source added that Microsoft plans on announcing an Xbox 720 (not an official name) at next year’s E3 – with an outside chance the new Xbox could arrive at retailers just in time for Christmas 2012. Crytek, of course, has officially denied the rumor.

Read more about the Nintendo Wii U, coming in 2012

Taiwanese hardware manufacturers Foxconn and Pegatron Technologies are currently contracted by Sony to build the PlayStation 3. Sources from these companies told DigiTimes that the PS4 will begin production by the end of this year and that Sony will push for a full 20-million units by the time system is launched in late 2012. The juiciest tidbit added to the rumor from DigiTimes is that PS4 gets a Kinect-style motion controller.

Motion-control gaming has touched down in a big way, creating a new breed of so-called “casual gamer”. The casual gamer plays socially at parties and, while not spending days on end in the basement completing the latest installment of adventure RPG game du jour like the truly dedicated gaming crowd, they open the industry to new demographics and expand its market.

PS3 already has the PlayStation Move system, similar to Wii motion controllers. But Move is faster and more accurate with its easily detectable light-source and camera working cooperatively to mimic on-screen movements. Kinect on the other hand is an even greater leap into motion control – it requires no sensors on the user at all. Kinect gets its information from the human body in front of its sophisticated motion control/camera system.

Microsoft makes no secret that it has big plans for the Kinect system, not just for gaming but as a multi-purpose human-machine interface to be used on PCs and other devices. It’s likely that Sony has a similar vision for a motion controller being used for other markets. Imagine a series of remote-free set-top-boxes. Headsets and other communications devices could all be potentially revolutionized by control with hand gestures.

Rumors however, are never without their detractors. Wedbush Securities Analyst Michael Pachter gave this cold glass of market reality insight to IndustryGamers.com:

"I think it's unlikely [that PS4 will be announced in 2012]. Wii U isn't going to pressure anyone, it's Nintendo's catch up to this cycle, and the other guys are going to see if the tablet integration is worth copying first. That means nobody is going to finalize specs till they see if Wii U succeeds. I am sticking to 2014, so an 'unveil' in 2013."

Colin Sebastian of Lazard Capital questions whether Sony is prepared to make another massive investment in a console:

"I think Sony introducing Vita [their new OLED-sportin' PSP replacement] at a low price point and likely lowering the PS3 price later this year will ultimately provide a gauge on the overall health of the PlayStation business. I think after that point Sony will be in a better position to speak about any next generation console. For now, I think the focus at Sony should be on ensuring a steady lineup of quality first and third party games for existing platforms."

It's Time For a New Generation

I must disagree, the investment in the next generation won’t be what it was in the last cycle. The last generation of consoles hit in ‘05 and ‘06 respectively. HDTV and HDMI were new technologies and most HDTV sets at the time couldn’t even display 1080p resolutions.

Before we dismiss rumors, consider that Xbox 360/PlayStation 3 already constitutes the longest running game console generation to date. Due to the collaborative effort in releasing a new game console it's game developers and hardware manufacturers that tend to leak details prior to official announcements. It's my opinion that the current generation is not only due for an upgrade but it could be possible as early as 2012.

To provide a personal anecdote about the PS3 as a media streamer – it's sadly outdated. Technically, the device is capable of streaming media with 1080p video resolution and multi-channel 5.1 audio. While its 3.2 GHz Cell processor is sophisticated, it leaves much to be desired decoding streaming media files. Most high-bit, Blu-ray rips streamed from a third-party media server running on your PC (the software that already handles the task of decoding the A/V stream) often experiences judder, lock-ups and just plain incompatibility to the stream on your PS3. Xbox 360 was even worse for on-again, off-again problems with hi-def streaming.

On the other hand - you can buy a dedicated media streamer for less than $100 based around an inexpensive Realtek processor that effortlessly streams any 1080p multi-channel audio media files you can throw at it.

While games are always getting more sophisticated, developers are always looking to push more polygons, faster. For now we’ve capped out in resolution and pushing more pixels at greater res has always been the most memory-and-processor intensive operation in gaming.

The analysts that are worried about a huge up-front investment of the likes we saw in the generation of game consoles is mistaken - the next generation of gaming hardware will be cheaper than ever.

In fact, Sony CFO Masaru Kato agrees: “It is no longer thinkable to have a huge initial financial investment like that of the PS3.” He says that a new PlayStation console won’t have anything close to the steep $599 price-tag that nearly killed the PS3 system out of the gate.

So, based on the cost of media hardware and the relative plateau in computer video demands, the next generation console will be cheaper to build than any generation before it.

What about Sony’s recent troubles and the economic slowdown? In my humble opinion the time is right for a next-gen console - not in spite of Sony’s financial troubles or a global recession – but because of it! A next-gen console war for 2012 might be a bit ambitious, but surely by 2013/14 the big kids in the industry should have the bugs ironed out.