What do the PS4 Pro and Xbox's Project Scorpio mean for the game industry?

So here's what we know. On November 10th, Sony will release the PlayStation 4 Pro, a souped-up version of its current-gen console, with a faster GPU and 4K and HDR support. In late 2017, Microsoft will release the Scorpio, an upgraded 4K-capable Xbox.

These are not next-gen consoles--they will supposedly be backwards-compatible with the PS4 and the Xbox One, but will feature improved graphics. But is the very idea of console generations still relevant in light of this move? Is this a half-step to please early adopters who want a better viewing experience on their high end TVs and VR headsets? Or is this a fundamental change to the way platform holders do business? Gamasutra staffers weigh in with their take on this topic below.

Bryant Francis (@RBryant2012), contributing editor: So, we now know some stuff about the specs of Scorpio and PS4 Pro. We have a better sense of why Sony and Microsoft are investing in them, and what developers think. What do we think this means for the industry? What do we think this means for VR? Will we buy them? Will our friends buy them?

Chris Baker (@chrisbaker1337), assignment editor: Here's the first question that leaps out at me. If what some people are saying is true, and Scorpio and PS4 Pro really are ushering in a new era in which consoles refresh like iPhones, with gradual upgrades instead of disruptive generational breaks...then won't the traditional loss leader paradigm have to go?

Like, the conventional wisdom is that consoles cost significantly more to manufacture than the sale price at launch, but by the end of the console cycle, efficiencies and innovations allow the hardware to actually be slightly profitable, or at least breaking even. If consoles are refreshing every couple of years instead of every six or eight years, won't the platform holders be losing far more money on each console sale?

Alex Wawro (@awawro), news editor: Yeah, I don't know! I think consoles are cheaper to manufacture when they don't significantly rely on proprietary tech (like the Cell processor) so perhaps Sony and Microsoft are finding it easier to turn a profit now that their consoles are basically built using versions of extant PC hardware.

What I'm curious about is what this means for game devs. By fielding multiple versions of their consoles at significantly different power levels (and prices) Sony and Microsoft seem likely to fracture their audiences, and I think ease of access to a large playerbase is one of the primary reasons devs make games for modern consoles.

We've seen the number of games released on Steam (and the PC in general) flare up in the past few years -- is this just going to add fuel to that fire by inspiring more devs to refocus on PC? Or is it not really going to be a big change for most devs, because they've long since become accustomed to making games that can scale easily between console and PC, or between various PC builds?

I know this has definitely turned me off the idea of continuing to buy consoles -- why buy a dedicated game machine that will be outdated in a few years if I can spend twice as much and get a PC that's more powerful than the console, more capable, and upgradeable at my own pace?

Kris Graft (@krisgraft), editor-in-chief: There are a lot of components that’ll factor into the success or failure of The Great Mid-Cycle Console Experiment of the Late 2010s (aka the GMCCEotL2010s).

A few of those components are mentioned below: financial impact on console manufacturers, the fracturing of the audience, and direct competition with PC.

Those are all valid points. But let me get to the most fundamental question being asked here:

“Will people buy these things?”

Yes, if the price and the experience offered strike the right balance. It’s a value question. It’s questionable whether or not the PS4 Pro is hitting the optimal balance with its $400 price point, paired with new features that are mainly appreciated by early adopter-types (i.e. a niche). Sony’s Andrew House said this PS4 hardware update came about partly because Sony’s data showed a mid-cycle drop-off in console hardware sales, as players migrated to more powerful PCs. PS4 Pro is meant to help counteract that drop-off.

But ironically, I’m hearing a lot of people saying, “WELP, might as well buy a PC now if consoles are doing THIS.” (I think this might be a case of an exec looking at the numbers in a vacuum, rather than really analyzing the real reason why so many people went to PC in the last several years. But that’s for another thread.) That said, I think PS4 Pro is more of a long-game for Sony and though the launch will probably be slow, this is meant to be a slow burn.

More importantly than the value challenge, I don’t see many people talking about the 'why' when it comes to the reason so many people are cool with upgrading their phones on an annual basis. We game journalists sure like to draw the comparison between the smartphone market and this weird new console market. But the key difference isn’t just that the business models are different (though that’s important to note), but that phone companies, primarily Apple, are only ostensibly selling incrementally improved technology every year. What they’re really selling is prestige, personality, and fashion (this was not my idea – Ian Bogost wrote about iPhones and fashion years ago).

If you’re a company that wants to sell non-consumable products like tech in high volume and high frequency, there needs to be a socio-cultural upside for consumers if they’re to take part in that marketplace. Do game consoles have the kind of appeal to induce that kind of rabid buying habit on shorter cycles?

Bryant Francis: Looping back to Alex’s developer point, I think the biggest trend I’ve seen as far as developer reactions to these consoles is that developers are welcoming them with either gritted teeth, or open arms and praise for our new robot overlords. The key difference between those two groups of developers is frankly how much first-party support they’ve gotten from Microsoft and Sony in the past.

I think both Sony and Microsoft do benefit from having improved their indie developer relations over the last few years, and have the ability to shorten the difficulty curve to prevent devs from having to constantly QA for 4 consoles as opposed to 2. But I wonder if the costs of developing for 2 (or more) versions of a console are going to scale in hidden ways. Will this impact customer service operations? Patching plans?

I agree with Kris’s broad point about the fact that smartphones are tied as much to fashion and status as they are to technical value, and to answer his question, no, I don’t think the games business can hope to achieve any kind of similar desire, especially when Sony’s strategy was to come out showing the nitty-gritty technical powerhouse of 4K video.

I can only say I think the biggest test of this will be all the talk of backwards-compatibility with all versions of a given console. Both companies have been slippery about whether VR games will work on previous versions of the console. I don’t think they will at all on Xbox One, and Sony keeps saying ‘PS4 Pro is about VR, but PSVR games will work with all PS4s,’ but I think it’s going to be in conflict at some point!

Also, if both consoles are banking on VR to take off, what happens if VR---doesn’t? What if it remains a kind of niche, and people don’t upgrade to get access to good VR. PSVR may stave this off, (cause if it does well at launch and can hold out it may convince people), but it is part of the gamble.  

I can say right now I have zero plans to buy either of these consoles, because frankly it’s a very high cost for a low need right now. Frankly I’m surprised I own two consoles at all, and now that I own an easily upgradable PC, I’ve been playing them a lot less. I just don’t think it’s a good bang for buck unless you’re very, very into the graphics power of that console.