The New Microsoft Xbox One: Key Takeaways (and Red Flags) From Today's Announcement

Microsoft ( MSFT ) unveiled its new generation console Xbox One in a brief yet densely "wow-packed" presentation today. Right now the new Microsoft toy looks far more appealing than Sony's ( SNE ) PlayStation 4, but it's still too early to draw too many definitive conclusions: No prices or release dates have been announced, and full game lineups will likely remain unknown until E3 next month.

Here are the top three things you need to know about the presentation and the product:

Xbox One Aims to Reinvent TV

Offering fully conversational voice control and the ability to switch almost instantly between TV, gaming, and the computer experience (it even runs Skype!) the new console marks itself as a serious - if not deadly - threat to smart TVs.

Who would want to play simple smart TV games and use limited functionality apps if you could just get a big "dumb TV," plug in an Xbox One, and enjoy features that competing TVs can't even begin to offer.

Moreover, the console will add additional content through an exclusive NFL partnership and a number of interactive features to the conventional TV-watching experience.

The announcement that the NFL will also be implementing Microsoft technology on the sidelines could signal a long-lasting relationship to come, a potential springboard from which Microsoft could continue to enter the TV game.

Microsoft has also teased the audience with mentions of fascinating cloud-based multiplayer games that will develop according to gamers' behavior, and new interactive TV features. Steven Spielberg has even signed on to create the Halo TV series, which he said would combine "mythmaking and technology."

If Apple ( AAPL ) wants to reinvent the TV, it better hurry up before Microsoft grabs the whole market for itself.

It Comes With Spectacular Hardware, Software, and Games

While Sony hasn't yet revealed the look of its new console, Microsoft chose to display its new stylish gray-black box right at the beginning of the presentation. More than just a slight to Sony, the Xbox One boasts a respectable array of hardware.

It looks competitive and more or less in the same class as its rival: Both boast unidentified 8-core processors with 8GB RAM and a 500 GB hard drive. Blu-ray, Wi-Fi Direct, 802.11n, USB 3.0 and HDMI are all included. Microsoft also showcased updates to the Kinect and the game controller: The new iteration of Kinect features additional degrees of sensitivity, with its 1080p wide-angle camera and new microphone arrays; creators boast it could even detect the heartbeat rate of the player, not to mention even the slightest body moves.

The new operating system, specifically tailored for the Xbox, has a tile-based interface, as we've seen in Windows 8 and the Windows Phone, which allows for easy gesture control, an "instant on" feature, conversational voice recognition, instant switching, and much more. Microsoft has also revamped its Live platform with always-on in-game DVR capabilities. Now the "game cloud" is powered by more than 300,000 servers worldwide.

Microsoft teased the public with a bunch of game titles that will accompany its next-gen console, including Forza Motorsport 5 racing, sports titles from Electronic Arts ( EA ) ( FIFA 14 , Madden NFL 25 , NBA LIVE 14 , and EA SPORTS UFC ) and Quantum Break from Remedy, the creators of super popular games Max Payne and Alan Wake .

The presentation finished with the impressive worldwide premiere gameplay trailer for Activision's ( ATVI ) new blockbuster Call of Duty: Ghosts .

Red Flags

Except for a couple of brief elements of game trailers, no developer showed actual user-controlled gameplay, rather they opted to present cutscenes which can be rendered in higher quality.

This might mean that the games are far from completion (or stability) right now, or that the console hardware is not final, or both.

Microsoft promised to reveal more games (and perhaps something rendered in real time while a user plays on the real console hardware) at the E3 game convention in June, which will be the next stage for the console rivalry. For now, it's hard to gauge just how far off we are from a photorealistic game picture; it seems that we have taken another step closer, but are still not quite there.

The other thing that might disappoint old Xbox fans is the lack of backward compatibility . Just like PlayStation 4 users, the folks who buy Xbox One will only be able to play new-generation games on it. This means a longer life for the current generation consoles, both at home and on store shelves, given the vast library of games available for the older technology, but it will certainly cause frustration among consumers.

Microsoft promises to have a massive number of titles available at launch, with more than 15 exclusives in the first year and "more titles in development now than any other time in Xbox history," as Phil Spencer at Microsoft Studios puts it. In a period of gaming where the fourth, fifth, and sixth game in various series are being released, Microsoft's announcement that eight of the 15 exclusives are brand new franchises, could signal a much needed breath of innovative air on the way. However, again it's too early to compare, and it will take years before the number of next-gen games can compare to the vast diversity of existing Xbox 360 titles.

And just like Sony did, Microsoft decided to play it safe and refrained from publishing any specific details about the release date and pricing of the new console, vaguely stating that it will be available, "around the world later this year."

See also:

In Gaming Console Battle, Microsoft and Sony Are Going Toe to Toe

The Video Game Industry Is Facing a Mobile Zombie Apocalypse

Nintendo Stakes Its Claim on YouTube

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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