Amid recent reports that the video game market is weak – with sales of gaming software off some 25% year-over-year, according to cNet — Microsoft just announced the latest version of its popular Xbox gaming console, called Xbox One.

Have the software monopolizers in Redmond been unwisely loading up on caffeinated beverages from Seattle-area baristas? Or is there more to the newest Xbox than meets the critical eye?

According to published reports, Microsoft seems to be after one thing and one thing only: To become the major go-to device in your home when it comes to playing games and taking in entertainment. Microsoft’s Don Mattrick, quoted by TechCrunch, confirmed that suspicion when he described Xbox One as, “Where all of your entertainment comes alive in one place.”

Build a better console, and the market will follow

Just in case anyone thought to question Microsoft’s vote of confidence in the gaming industry and its future, the company recently released a slew of statistics that supposedly show that gamer gizmos and related accessories actually amount to a growing, and healthy, enterprise:

  • Mister Softy says “gaming revenue [is] growing faster than all other forms of entertainment”, with games by all makers enjoying 7% revenue growth, edging out TV subscriptions at 6.8%
  • 57% of all U.S. households now own a gaming console, up from 40% a generation ago
  • Of the $65 billion spent on all sorts of video gaming activities in 2012 (including consoles), 42% of that spending – or $27 billion and change – was related to consoles. That’s a few bil. more than the $12 billion generated over PCs and the $10 billion from mobile/tablet, combined
  • Over 1 billion people play games worldwide. “More people are playing video games than ever before,” says Xbox chief of staff Aaron Greenberg, “and they’re doing it across a variety of devices. As more devices, tablets, phones, become smarter and more interactive, we’re seeing that people are choosing gaming as a main form of entertainment.”

For gamers and non-gamers alike

If Greenberg’s assessment is accurate, it means that the quickest path to the hearts of fun-loving consumers won’t be their iPad, smartphone or set-top box – but their gaming console. Even if it’s their kid’s gaming console.

With various devices lying around the house, many of them extracting monthly subscription fees, it stands to reason that people will eventually pare down the number of household gadgets – at least those with recurring costs – in favor of a select few that get the job done more efficiently. As in, more cheaply. Add to that the fact that many gamers prefer one gaming system over others – with some exclusively loyal to just one, which saves on having to buy the same game for use on different platforms – and Microsoft’s emphasis on its signature console product begins to make a little more sense.

On top of all that, factor in competition from the likes of Apple TV and Google TV, and it’s clear that Microsoft had to bring more than a knife of a console to an intergalactic gunfight. The Washington Windowites have previously struggled in their quest for battlefield dominance, given that the words “cool” and ”Microsoft” have trouble sharing the same sentence. “Cool” and “Xbox” work just fine thank you.

The arcade as centerpiece

Now, it’s all about Xbox One, which looks to become a critical, all-purpose entertainment device for Microsoft, capable of streaming live entertainment, recording gameplay via DVR, accessing archived content (Steven Spielberg was part of the launch announcement), responding to voice commands, playing games online and even storing data via a cloud arrangement.

The fact that the Xbox began as a gaming device is only part of the picture. If smartphones had turned out to be the leading method by which people got their entertainment, including games, you can bet that’s exactly where Microsoft – and its competitors – would have placed their bets for the future.

For now, though, the future of in-home entertainment – at least as far as Microsoft is concerned – is all about consoles.

Game on.

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