PS4/Xbox One Power Differences Irrelevant, Sony and Microsoft Risk Obsolescence with Cloud

While Managing Director of Equity Research at Wedbush Securities Michael Pachter is known for his numerous views, one of his more well known gripes in the best few months has been with PlayStation Now. Then again, remember the so-called “power of the Cloud” that Microsoft touted with the Xbox One?

Following his criticisms of PlayStation Now, which is Cloud based, what are Pachter’s thoughts on the Xbox One’s Azure servers which were touted as being able to enhance the console’s games? Will the Xbox One’s Cloud help the system stand on even footing with the PS4 in terms of power and visuals?

Pachter stated that, “I don’t know. I think it’s funny, I think the distinction between these two consoles in terms of power is really a headline than it is a practical matter. It’s not like anybody says ‘oh, I can play the game side by side, and the PS4 game plays better.’

“I mean, maybe it looks better, or that’s what some people say, but they generally run at the same speed, so I don’t really understand how people say one looks better than the other, I don’t believe them, and I know everybody loves to say that they can tell, but I am sure that the average customer can’t. So I don’t think it will make any difference at all, and I don’t think Microsoft is going to try to bring in the ‘power of the cloud’ to make up for anything.

“It’s an interesting issue, really, once you move to the cloud, and it’s going to be one with PS Now as well. Once you move to the cloud, all that you need is a file, a client, in your disc drive or resident on your console…but you don’t need the console at all. So, why can’t you just put the client on your FireTV from Amazon, and just play the games there?

“So, I think the console manufacturers are going to have to tread very carefully with cloud computing, because it kind of makes their machines obsolete. I mean, if we’re just working in the cloud and streaming a file, we don’t care what box it’s on, it’s just a file that’s operating on a server somewhere.

“So as you go in that direction, can’t you see Activision getting all excited, you know saying, let’s just get rid of consoles and quit paying margin to Microsoft or Sony or Gamestop, and have you play Call of Duty in the cloud? So I think that’s one of the risks with this overarching strategy of cloud gaming, it’s an issue with Microsoft’s emphasis on the cloud, and with Sony’s PS Now. They run the risk of making their consoles obsolete.”

But this seems to be direction that most consoles are going, what with talk about the last generation of consoles and what not. Wouldn’t it make sense to achieve this with Cloud gaming?

Pachter replied, “But why would you need Microsoft for that? Why would you need Sony? Maybe you need Google, or Yahoo, or Amazon. I mean, I think that part of the thought process behind FireTV and potentially an Amazon smartphone, is that Amazon has invested tens of billions in Amazon Web Services, and they would love to be the cloud solution for everyone for everything, and then Microsoft loses. And Microsoft won’t like that. So, I think it’s in Microsoft and Sony’s best interest to try to keep consoles alive.”

Do you agree with Pachter’s views? Let us know in the comments below.

This is just a snippet of our interview with Michael Pachter and we will have more soon.