Author(s): Raghu Gopal
Microsoft announced yesterday that it will stop producing the Xbox 360, the gaming console that cemented the company's place in the living room. Phil Spencer, the head of Microsoft's Xbox unit, said, "While we've had an amazing run, the realities of manufacturing a product over a decade old are starting to creep up on us".
It's the end of the road for the console, about 10 years after it was first introduced. Originally launched at the end of 2005, the Xbox 360 went on to sell more than 80 million units, far outpacing the original device and consolidating Microsoft's spot in the console space. The Xbox 360 launched with a number of popular games including Activision Blizzard's Call of Duty 2 and Electronic Arts' Need for Speed Most Wanted.
Xbox 360 was the enabler for Microsoft's Kinect, the motion-sensing gaming accessory that pulled a player's motion into the game. Passive playing shifted to active with sensor-filled, hand-held attachments like Kinect.
The company's Xbox Live network, which allows online multiplayer gaming, will continue to be available for the Xbox 360. However, Microsoft will focus on the shift to the Xbox One console.
Microsoft has recognised the futility of continuing to manufacture the product, as prices have dropped recently and there's no incentive for gamers to buy the console. Developers are also reluctant to introduce new games specifically for it.
Sales of older-generation consoles such as the Xbox 360 and Sony's PlayStation 3 have been declining as consumers shift to newer iterations of the consoles or to mobile-based games. Microsoft isn't alone in moving on; Sony discontinued the PlayStation 3 in New Zealand in October 2015 and more markets are likely to follow; Nintendo is expected to stop production of the Wii U by the end of 2016 after being on the market for just four years. In 2013, CCS Insight predicted the eventual demise of dedicated games consoles as a distinct category, as manufacturers broaden the functionality of such devices.
It's difficult to ignore the behavioural changes going on. With the percentage of smartphone users in some markets approaching 100 percent, much of the energy in the gaming industry and among gamers is moving toward mobile platforms. And with virtual reality ecosystems now settling in, older family-room game consoles now face a shift to new designs and new users.
We all knew the 360 couldn't be around forever.