I think you may be missing the point though. MS wants the user whom is focused on games yet still enjoys this type of multimedia interaction. Do I need a dedicated STB that will do everything that the XBO can from a multimedia side but can't play games at the same graphical fidelity or with the same online components/controller?
For me its a no.
Over the life of the XBO, do you expect Amazon to upgrade the hardware enough and dedicate the resources to compete with MS/Sony on the gaming side? How of an impact will the hardware revisions make when the STB is essentially just running apps and they can be run on the two consoles as well?
Sony and MS are targeting a user whom wants both games and multimedia. They are using different methods but that is who they are targeting.
Im sorry but I honestly believe the users that bought the Xbox one for its media capabilites are a tiny minority.
The Majority bought the X1 because its the next Xbox. Games first and foremost. Media functions and Kinect are cool but they are just icing on the cake. Would you have forgone Kinect and Hdmi for more powerful hardware? Of course.
Which means media is not so much a selling point but rather a bragging point ONCE you already have the console. People who are looking primarly for casual and media experiences, with gaming on the side have much better options than both the X1 and PS4.
It makes no sense to have the cost of your console raised to cater to that market. Even gamers with non gaming families are better served with a kinectless X1 and FireTv combo than with the current X1 package. Lets not services like Onlive/Playstation now are on the horzion, and im sure that steam OS will eventually do something similar.
People say that a kinectless X1 is a weaker PS4, but they are still comparable in value, especially when we compare on a software level. A dramatically more expensive Roku/AppleTv/FireTv with Software that isnt mostly for the causal audience is not and that is what the X1 now is.
Not to mention for a year and 4 months of live gold alone, you can have one of these devices. They pay for themselves.
And by hardware iteration, im talking about hardware innovation that allows media features to shine better than the fixed point of consoles can. Faster WiFi, Bluetooth, Wireless Hdmi, More ram greater CPU power are things that we legitimately can expect in future iterations of the FireTv and such devices. These things are updated yearly. Things by the very nature of being a console, the X1 cannot keep up anywere near as fast or nimble. We only had 3 model revisions of the 360, one arguably was at the tail end of its mainstream commerical life.
No they will never have the processing power nor the developer support to beat the consoles for hardcore gaming but that is besides the point. We are at the stage were mobile style games are already enough for a huge audience in terms of visuals and depth and for a consumer that sees gaming as a side dish in the same way we see media features as a side dish, there us really only one sensible choice.
Thats why im saying that Microsoft needs to double down on games because thats where the X1 can excell. For those experiences you dont need kinect or a interface built around metro. You don't need a HDMI either. You need to invest in first party studios, indies and securing as much exclusive software as possible. The dream of the Xbox one "winning the living room" is dead. Its time to concentrate on winning the hearts of gamers instead.