- Microsoft came out with guns blazing at E3, with a slew of new games heading straight to Game Pass.
- Sony stayed home, content with its console domination and strong pipeline of PS5 exclusives.
- Nintendo showed off new entries in its beloved “Metroid” and “Legend of Zelda” franchises.
Suddenly Microsoft looks less like just another contender in the video-game console war and more like a disruptor of the entire industry.
This week at E3, the world’s biggest gaming conference, Microsoft unveiled an impressive pipeline of new titles, most of which will work on its latest Xbox consoles but also could be played on the company’s Game Pass streaming service and even on iPhones and iPads in some cases.
Meanwhile, Nintendo did what Nintendo does best: taking old characters from beloved franchises and making them feel new again, an unoriginal but proven strategy so far. Sony didn’t show up – literally – but it’s repeating moves, too, by making a small number of exclusive AAA games to draw customers to its PlayStation 5.
But the console war is entering a new phase where the old gaming playbook will be sorely tested. And Microsoft’s E3 announcements show that it’s pursuing its vision of the future more aggressively than its rivals are.
This year’s conference was the first since Microsoft and Sony released new consoles in November, making it particularly important for the companies to leave gamers with favorable impressions. A strong E3 showing can ensure healthy sales during the all-important holiday season. And after the PlayStation 3 and the Xbox One stumbled out of the gate in previous console cycles, both companies are acutely aware of how much opinions at E3 matter.
Here's a look at the biggest news from each company and what these moves mean for the next few years in the industry.
Hey, Microsoft, where are all the games?
Gamers are not known for their patience. It seems extraordinary, then, that they've been so patient with Microsoft. Since the release of the Xbox Series X and S in November, exclusive content for the systems has been sparse, to say the least.
While they waited, Game Pass has emerged as a resounding success, with 23 million users as of April 20. Microsoft has been hard at work making the case for paying $10 a month to play games on Game Pass rather than shelling out $60 for every new game you want to play.
The company has improved backward compatibility, with almost 100 older games playing at 60 frames per second instead of their original 30. And the ever-growing library of games on Game Pass - which now includes titles that were once exclusive to Sony, like "MLB The Show" - is an impressive feat that subscribers have been satisfied with so far.
But most gamers still buy the big shiny new console when they've got big shiny new games to play on it. It doesn't really matter if you can stream your games to your phone or play against people on a PC. In 2013, gamers didn't care that the Kinect could track your movements or that the Xbox One doubled as a home entertainment system. That's a lesson Microsoft learned too late to salvage the last round of the console war.
So before this year's E3, Microsoft needed to prove that it was making new games that people would actually enjoy playing. The company has acquired about 20 studios in six years, including ZeniMax Media for $7.5 billion, so investors expect a return on those investments. In short, Microsoft needed to prove that it wasn't making the same mistakes again and ignoring video games while focusing on cloud computing and its other massive businesses.
Microsoft brings out the big guns
The company made its presentation a Microsoft and Bethesda showcase, to remind everyone that it now has direct access to a pipeline of favorites like "Elder Scrolls" and "Fallout," as well a claim on any future hits from Bethesda, thanks to the ZeniMax acquisition.
The show began with Todd Howard treating us to a trailer of the long-awaited "Starfield," out on November 11, 2022. To drive home the point, Microsoft's showcase ended with a surprise reveal of "Redfall," from Bethesda's Arkane Studios, out in summer 2022.
Microsoft showed off a staggering 30 games, both exclusive and nonexclusive to the Xbox consoles. Even more impressive is that 27 of them will be available on Game Pass, further illustrating the value of the games-as-a-service offering.
"Psychonauts 2" will be an Xbox exclusive in August, as will "Halo Infinite" sometime this holiday season. Other exclusives include "Microsoft Flight Simulator," which will be ported from PC to the Xbox Series S and X in July, while "Forza Horizon 5" will drop in November.
The tidal wave of games was meant to make one thing clear: Microsoft's new strategy is finally paying off.
Yes, Microsoft has been integrating xCloud into Apple's iOS platform, meaning subscribers can start playing their favorite Game Pass titles from their iPhones as early as this month. But at E3, the company proved that it had also been hard at work making a ton of video games and getting them to gamers for cheap.
Sony has the lead, but for how much longer?
Sony's response was simple and concise: silence.
2021 marked the third straight year without an appearance from Sony at the world's biggest video-game conference. But why should the company even bother showing up to E3 just to share the stage with its rivals when it's already been winning the console war so handily? After all, Apple doesn't bother showing up to the CES tech conference most years.
Sony's been winning for a while now. After this became obvious in 2015, Microsoft stopped breaking out Xbox sales figures, so no one is sure exactly how badly the PlayStation 4 beat the Xbox One in the last console cycle. But most estimates put PlayStation 4 lifetime sales at about 116 million units, while the Xbox One trails at roughly 50 million.
With such a large user base already invested in the PlayStation ecosystem and hooked on Sony games, it didn't take much to upsell many of those gamers into a PlayStation 5. Success begets success, and early sales figures show just how successful the PS5 has been in its first few months on the market.
As of the end of March, when Sony concluded its fiscal year, the company had sold an impressive 7.8 million of the consoles. That was enough for the NPD Group, which tracks video-game-industry sales figures, to declare the PS5 the best-selling console in US history through its first five months of release. The numbers have only risen since then, while Microsoft's Xbox Series X and S have lagged well behind.
While part of the PlayStation 5's success can be attributed to a sizable user base, it's also thanks to the strength of Sony's lineup of exclusive games. Unlike Microsoft, Sony has stuck to the console-maker playbook of building a slow but steady pipeline of new games that use the processing power of the console.
That's what gamers want, after all: big shiny new games for a big shiny new console. Microsoft has been able to forestall complaints about its dearth of software releases by expanding its Game Pass library and enhancing backward compatibility. Sony has had no such problem, with a strong lineup of PlayStation 5 exclusives coming out this year.
The company already saw success with "Returnal" in April and released the long-awaited "Ratchet & Clank: Rift Apart" in June. There's also "Deathloop" in September, "Ghostwire: Tokyo" in October, and "Horizon Forbidden West" sometime this holiday season. These are the sort of AAA exclusive games that got people to buy the PS4 in record numbers, and Sony has staked its future on the same strategy.
Sales indicate that Sony's bet is paying off and that the company is winning the latest battle in the console war. But it seems that might have only been because Microsoft was figuring out how to win the whole damn thing.
Plenty of familiar faces from Nintendo
"Console war" is a bit of a misnomer these days - Sony and Microsoft's neck-and-neck race to release their consoles has made it more of a console rivalry. Nintendo could have easily been forgotten among the hype of the new consoles battling for market dominance as its four-year-old Switch console reaches the halfway point of its expected life cycle.
But then the pandemic hit, followed swiftly by "Animal Crossing: New Horizons." We had been talking about Microsoft and Sony and their big shiny new consoles just a few months earlier, but suddenly everyone was playing on a Switch.
While it may seem as if Nintendo's popularity is a recent development thanks to hit games like "Mario Kart 8 Deluxe" keeping people occupied while they've been quarantined, it's been a long time coming. The Switch has been the bestselling console for the past 30 months, since December 2018, in large part because of Nintendo's incredibly strong IP.
People love Nintendo characters and games and continue to return to their favorites again and again. The numbers back this up: A recent earnings announcement revealed that roughly 60% of software sales came from Nintendo's back catalogue.
"Super Smash Bros. Ultimate," a game that came out in 2018, and "The Legend of Zelda: Breath of the Wild," from 2017, are the third- and fourth-best-selling games on the Switch, while gamers have shown a willingness to buy remasters of classics like "Super Mario 3D All-Stars," with 9 million copies sold last quarter.
Sony has worked hard to create successful IP, honing its studios to perfection. Microsoft bought its way there, using the power of its deep pockets to drip-feed its Game Pass service.
But Nintendo characters are household names decades after their debut. This year is the 35th anniversary of the first "Metroid" game, and Nintendo is celebrating the 35th anniversary of "The Legend of Zelda" with a mini Game & Watch system. September 2020 was the 35th anniversary of "Super Mario Bros.," and the company has begun an expansive celebration of "Pokémon's" 25th anniversary throughout 2021.
It's clear from E3 that Nintendo is well aware of the ongoing popularity of its beloved characters. The two biggest names dropped during the Nintendo Direct showcase were "Metroid Dread," the first new edition in the long-running series in ages, while the sequel to the bestselling "Breath of the Wild," to be released sometime in 2022, put an exclamation mark on the presentation.