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Microsoft, Sony face off in video game industry’s once-in-a-decade moment

The Sony PlayStation 4, in New York, Nov. 12, 2013. The new console, vying with the Microsoft Xbox One, hopes to be an all-in-one conduit for entertainment content into living rooms, even as competition for the time of both gamers and TV-watchers proliferates.


The video game industry's once-in-a-decade moment has arrived.

In the span of one week, from last Friday to this Friday, the two biggest players in the video game console industry release new versions of their signature hardware – a cycle that takes upward of eight to 10 years.

The launch of new gaming consoles from both Sony Corp. and Microsoft Corp. marks a new era in the multibillion-dollar gaming industry, with ripple effects that extend to countless game developers, peripheral-makers and, ultimately, consumers.

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However, as video games and the consoles designed to run them become more and more powerful, the console makers' exclusive focus on gaming is becoming a thing of the past. For both Sony and Microsoft – two companies battling the likes of Apple, Google and Samsung for dominance in the lucrative consumer entertainment industry – the gaming console is now the most immediate and versatile way to offer consumers a variety of entertainment. Through these devices, a user can now do everything from web surfing to video-conferencing to movie and music shopping.

The Xbox One – Microsoft's latest and much-anticipated gaming hardware – hits store shelves in North America on Friday, almost exactly eight years to the day its predecessor, the Xbox 360, first launched. Sony last week released the PlayStation 4, marking the newest generation of the popular console. The company sold a million units in the first 24 hours of availability.

Together, the two debuts officially kick off the latest generation of gaming consoles. Although both devices will likely get all manner of software and hardware upgrades in the coming months and years, it will likely be a full decade before another product-line refresh as significant as the one taking place this week.

Both Sony and Microsoft still claim their video-game consoles are just that – first and foremost, gaming devices. But the integration of more and more non-gaming features has turned the machines into something more all-encompassing. In the latter part of the life cycle of the previous console generation, both Sony and Microsoft invested heavily in giving their users more entertainment options, such as online media stores, Netflix streaming and better integration with set-top TV content. This time around, the companies are baking in those features and many more like them into the hardware offerings, with an added focus on making it as easy as possible for users to share everything from photos to gameplay videos.

"First and foremost, we consulted with the game development community to see what they wanted," said Stephen Turvey, vice-president and general manager at Sony Computer Entertainment Canada. "But along with that we had early [discussions] with Netflix and Facebook in particular to increase digital and social functionality."

Arguably, Microsoft takes that approach even further with the Xbox One. Among its many non-gaming features, the device will be able to pull information from traditional cable boxes and online services such as Hulu and Netflix and combine them into a single program guide. The console also comes with a visual and voice recognition system that allows users to navigate the system through voice commands alone – part of an attempt to make the system more intuitive and less daunting for non-gamers who may be put off by the somewhat complex Xbox controller.

Indeed, the game-focused aspects of the new Xbox actually proved to be the subject of the most consumer criticism in the lead-up to the console's launch. Initially, Microsoft announced increased restrictions on the sale of used games, and a requirement that the Xbox be connected to the Internet at least periodically for users to continue playing their games. Many of those users balked at the constraints, and the company eventually relented.

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But despite the initial bad publicity, Microsoft's focus on the social aspect of gaming has left it with a loyal user base. The Xbox Live online subscription service, which offers users various perks and added gameplay features for a monthly fee, now boasts about 48 million subscribers. As a result of the Xbox's success, Microsoft's gaming division is now one of the company's best-performing units.

Now, Microsoft hopes to leverage that customer loyalty to solidify the Xbox as the central hub of living room entertainment, fulfilling the mandate of the original 2001 console.

"We wanted to build an incredible gaming machine, but also pull in live television," said Craig Flannagan, director of marketing at Xbox Canada. "Now I can know what my friends are watching, I can discover new programs socially and I can switch my entertainment seamlessly.

"It is an ambitious vision. There are a lot of moving parts. But we feel like we're there."

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