Console Wars, Content, Thin Client & Cloud

The Xbox turns 10 years old today, making it ancient in computer years. But do you know what else is really old in computer years? The Xbox 360 launched in November 2005, four years to the month after the launch of the Xbox, making the current-generation console six years old. Prior to this console generation (Xbox 360, Wii, PS3), a new console generation came out every four to six years, and if that pattern had held, I'd be playing Skyrim on the successor to either the PS3 or the Xbox 360. Instead, I'm playing it on a dedicated gaming PC to get the best experience, because the silicon that powers the current-generation consoles from Microsoft and Sony is so old and weak that it will be outclassed by smartphone hardware in early 2013. (As for the Wii, the smartphone left it in the dust a while back.)

So what happened? Why have Microsoft and Sony both opted to extend the life of their current consoles with the motion-based add-ons Kinect and Move, instead of launching new consoles right about now? There are a few trends and forces behind the current state of affairs, the most important of which was the rise of the cloud as a mass-market content delivery mechanism. The cloud has redefined "TV" as an on-demand service that can be delivered via a very lightweight "thin client," which means that Microsoft and Sony can comfortably deliver on the previous console generation's promise of a TV/PC/Internet "convergence" experience without updating their hardware.

Convergence and the cloud

At the dawn of this past decade, when Microsoft and Sony were both preparing to launch the previous generation of consoles, the two companies conceived of these devices as "Trojan horses" into the consumer's living room. As Dean Takahashi describes in his epic account of the birth of the Xbox, Microsoft and Sony were both interested in taking a bite of the post-PC pie. The idea was to build a "convergence box" that could merge the TV, PC, and internet into a seamless entertainment and shopping experience. But the console giants' vision was well ahead of Big Content's, and it took the rise of Napster, the iTunes Music Store, Netflix streaming, and years of lawsuits before there was a digital content ecosystem in place that could actually deliver on the promise of TV/PC/internet "convergence."

Indeed, it took until 2010 for "TV" to finally and officially make the transition from the traditional broadcast paradigm to the new cloud-based paradigm that has emerged. I described the contrast between the two paradigms as follows:

The traditional TV interface paradigm is that you browse finite collection of resources using as a guide some limited, easily managed pool of metadata that doesn't refresh too often; but to navigate "TV" as it has been redefined by the cloud, you need to be able to query an infinitely larger, dynamic pool of metadata that indexes an infinitely larger resource pool.

Under the original TV paradigm, the resource pool was a set of live channels, and the metadata pool that indexed it was a few pages in TV Guide or the local paper. This paradigm has stayed with us through the initial transition to digital TV, where the resource pool is now a library of files and metadata is expressed as in file metadata and a user-curated organization structure (e.g., a directory structure or media library). But when the TV becomes a thin client that connects directly to a massive, cloud-hosted datastore that you do minimal curation of (e.g., a "favorites list," the Netflix "Instant Queue," a voting + social recommendation engine combo), the "browse" paradigm no longer works.

Thanks to the cloud's redefinition of TV, the console has also been redefined from "a dedicated gaming device plus a cartridge or disc" to "a cloud services delivery endpoint plus a bundle of content delivery deals with Big Content and software makers." And this means that the "console wars" will now be fought not only on the basis of fill rates and polygons per scene, but also on relationships with content owners and service providers.

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